New Delhi: Rating agency Moody's has sounded a note of caution that
any reduction in excise duty on petrol and diesel would adversely affect fiscal
deficit unless it is matched by a commensurate cut in expenditure.
Pressure has been
mounting on the government to cut excise duty on petrol and diesel to bring
down their prices which have gone up following a spike in crude prices in the
international market.
According to government estimates, every rupee cut in excise duty on petrol and diesel will result in a revenue loss of about Rs 13,000 crore.
According to government estimates, every rupee cut in excise duty on petrol and diesel will result in a revenue loss of about Rs 13,000 crore.
Observing that fiscal consolidation would be closely watched for
assigning the sovereign rating, Moody's said India's biggest challenge is its
fiscal strength which is relatively low as compared to 'Baa' rated peers.
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