Excise duties on petrol, diesel to fuel infra projects

To boost the investments in infrastructure, a National Investment and Infrastructure Fund is being established and to this effect, a public –private-partnership mode of development would be revitalized with a view to invite investment for the petroleum and natural gas sector.

Various proposals that were made in the Union Budget 2015-16 to ensure a greater stability in economy and the development of petroleum & natural gas, are also expected to give an additional boost to the infrastructure development.

To fund the investment in roads and other infrastructure to the extent of Rs 40,000 crore, the proposals sought for an increase in effective rates of additional excise duties imposed on petrol and diesel from Rs 2 per litre to Rs 6 per litre.

To boost the investments in infrastructure, a National Investment and Infrastructure Fund is being established and to this effect, a public –private-partnership mode of development would be revitalized with a view to invite investment for the petroleum and natural gas sector.

It was also highlighted that there is a need for reduction in rate of corporate income taxes from existing Rs 30/- to Rs 25/-, to attract better investments and achieve a better growth in the sector.

Keeping the overall structure of the excise duty unchanged, an emphasis was made for revision in specific rates of excise duty on petrol and diesel to the extent of including the quantum of education cess levied.

In accordance to the Union Finance Minister’s statement to rationalize subsidies and cut leakages, adequate funds have been provided for LPG and kerosene subsidies.

To this effect, an amount of Rs 6335 crore has been transferred to over 11.5 crore beneficiaries under the Direct Benefit Transfer for LPG, said the government release as highlighted in the Budget proposal.

To ensure energy security in the country, the Indian Strategic Petroleum Reserves Limited (ISPRL) is setting up strategic crude oil underground storage reserves of 5.33 MMT at Visakhapatnam, Padur and Mangalore.

Under the Plan head in 2014-15 Revenue Expenditure, a total amount of Rs 2,400 crore has been allocated for filling crude oil in the underground caves.

An amount of Rs 72,589 crore was proposed for 2015-16 as plan capital expenditure by the oil and gas Central public sector enterprises from the internal and extra budgetary resources of the companies for exploration and production, refining & marketing, petro chemicals and engineering projects.

 

This article was published in The Dollar Business on March 02, 2015

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