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Fuel duty cut to soften inflationary pressures: Finance Ministry

The recent cut in central excise duty on petrol and diesel prices is expected to soften inflationary pressures exerted by rising crude oil prices, the ministry said in its monthly economic report.

Published: 11th November 2021 09:43 AM  |   Last Updated: 11th November 2021 09:43 AM   |  A+A-

By Express News Service

NEW DELHI:  The Finance Ministry on Wednesday, November 10, 2021, said that while core inflation remains a matter of concern, the recent cut in central excise duty on petrol and diesel prices is expected to soften inflationary pressures exerted by rising crude oil prices.

“Core inflation, which reflects hardening of input costs and ripple effects of escalating global crude oil prices, poses concerns. Yet, these concerns have not embedded themselves in self fulfilling inflationary expectations as seen in RBI’s inflation survey. Further, the recent cut in central excise duty on petrol and diesel prices is expected to soften inflationary pressures exerted by rising crude oil prices,” the ministry said in its monthly economic report.

While Consumer Price inflation in both rural as well as urban segments eased during the month (September), core inflation continued to remain sticky at 5.9% in September. Fuel inflation also inched up to a new high of 13.6%. The Ministry was bullish about the economic growth in the coming months on the back of increased vaccination and improving economic indicators.

“With India’s Covid-19 vaccination campaign crossing new milestones in rapid succession and teeming festivities lending renewed optimism to India’s ongoing economic recovery, further demand stimulation, fuller restoration of supply chains, narrowing of demand-supply mismatches and greater employment generation, are in the offing,” the report said.

The report was optimistic about the investment cycle. “Armed with necessary macro and micro growth drivers, the stage is set for India’s investment cycle to kickstart and catalyse its recovery towards becoming the fastest growing economy in the world,” it said. 



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