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FM Nirmala Sitharaman downplays oil price hike, inflation concerns, says economy on recovery path
Finance Minister Nirmala Sitharaman on Monday downplayed the high petroleum prices fuelling inflation and reiterated that fundamentals of economy are strong and India will continue to attract investment.
“The weight of fuels like petrol, diesel and other fuels in the total CPI-Combined is only 2.52%,” Sitharaman said, adding that the CPI- combined inflation in June 2021 was 6.26%, as against the average CPI-combined inflation of 6.16% during 2020-21.
The prices of petrol increased 63 times and diesel 61 times between January 1, 2021, and July 9, 2021 and the price of liquefied petroleum gas (LPG) increased five times during this period, the government informed the Lok Sabha on first day of the monsoon session, as many leaders raised the issue of high price of petroleum products.
According to the Minister of State for Finance Pankaj Chaudhary, excise duty collections in April-June 2021 was Rs 1010 billion. Excise duty collection from petrol and diesel by the Indian government has increased by 88% to Rs 3350 billion between April 2020 and March 2021, the government told Lok Sabha on Monday, adding that this was up from Rs 1780 billion registered in the FY20.
This number includes ATF, natural gas and crude oil as well, along with petrol and diesel. But the fact that petrol remaining above Rs 100 in many major cities is fuelling inflation in other products also, putting pressure on retail inflation.
In the last financial year also petrol price was increased on 76 occasions and reduced 10 times. Diesel on the other hand was increased 73 times and reduced 24 times. Quoting the FDI inflows, the Finance Minister said FDI inflows into India rose by 25.4% to reach $64 billion in 2020, from $51 billion in 2019, making the country the fifth largest recipient in the world in 2020, up from eighth position it held in the previous year.
“As has been witnessed in overall FDI inflows, India’s strong fundamentals and market size will continue to attract market-seeking greenfield investments,” she said.
Excise duty collection doubled in FY21
Excise duty collection from petrol and diesel by the Indian government has increased by 88% to Rs. 3350 billion between April 2020 and March 2021.
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