Business / All round preparation of Modi government to curb inflation after petrol and diesel

Vikrant Shekhawat : May 25, 2022, 08:00 AM
New Delhi | To curb inflation, the government has intensified all-round preparations. In this, the government is also getting support from the Reserve Bank. Recently, after reducing excise duty on petrol and diesel and giving relief on import duty on other items including coking coal, now the government is exploring the possibility of cutting duty on edible oils like edible oils. Sources related to the matter say that apart from this, the government is also considering measures to provide cheap goods to the common man by giving relief to the industries.

At the same time, the government has announced the removal of customs duty and agricultural infrastructure cess on import of 20 million tonnes of crude soybean and sunflower oil annually by March 2024. According to the notification issued by the Finance Ministry on Tuesday, import duty will not be levied on 2 million tonnes of crude soybean and sunflower oil annually in the financial years 2022-23 and 2023-24. The government believes that this exemption in import duty will bring down domestic prices and help in controlling inflation.

Analysts say that the recent cuts in fuel taxes and measures to reduce prices of iron, steel, coal, plastic and cement may bring down retail inflation. He says that retail inflation is likely to come down to 6.5-7.3 per cent in May. Apart from this, after June, inflation may fall by up to 0.40 percent. Inflation based on the Consumer Price Index touched an eight-year high of 7.79% in April. Analysts at Nomura say that the reduction in fuel tax will certainly have a direct and indirect impact on inflation in the near future and it is likely to come down by 0.30 to 0.40.