Economy

Need coordinated action between Centre, States on tax reduction in fuel prices: RBI Governor

Reserve Bank of India (RBI) Governor Shaktikanta Das.   | Photo Credit: PTI

Reserve Bank of India (RBI) Governor Shaktikanta Das on February 25 said there is a need for coordinated action between the Centre and State governments to reduce taxes on petrol and diesel prices.

Also read: RBI concerned over impact cryptocurrency may have on financial stability: Shaktikanta Das

“There is a need for coordinated action between the Centre and States because there are inherent taxes levied by both,” the Governor said adding that calibrated reduction of taxes was important.

He was speaking at an event organised by Bombay Chamber of Commerce.

He, however, said both the Centre and the State governments have their revenue pressures and they are required to spend high sums of money to enable the country and the people to come out of the COVID-19 pandemic stress.

Also read: Petrol price hike a vexatious issue: Nirmala Sitharaman

“So the revenue requirement and the compulsion of the governments are fully understood. But having said that, the impact on inflation also is something which comes in from of the fact that petrol and diesel prices do have an impact on the cost of manufacturing, production…,” the governor said.

On the central bank’s digital currency, Mr. Das said a lot of work is going on internally in the RBI and some broad guidelines and approach papers will be released on it soon.

Also read: After Rajasthan, petrol price crosses ₹100-mark in Madhya Pradesh

The governor said RBI has certain concerns on cryptocurrencies and it has already been communicated to the government.
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Printable version | Apr 13, 2021 11:02:31 AM | https://www.thehindu.com/business/Economy/need-coordinated-action-between-centre-states-on-tax-reduction-in-fuel-prices-rbi-governor/article33930269.ece

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