Government must cut duty on fuel if global oil prices stay above $100 a barrel: CII’s Narendran

The government should consider offering some relief to Indian consumers by paring excise duties on petroleum products, if global crude oil prices remain above $100 a barrel, the Confederation of Indian Industry (CII) president T.V. Narendran said on Monday.

Mooting a mix of ‘some efficient welfarism with appropriate policy action to control inflation’, Mr. Narendran indicated it was essential to sustain consumption. “While most sectors have recovered to pre-pandemic activity levels, the recovery in consumption had been a bit fragile and demand is starting to strengthen now,” he said in an interview.

“If the oil prices stay about $100, then if there is something that can be done on excise duties, etc. to reduce the pressure on the common man… that’s something to be considered along with checking if there is some room between the refiners’ margin and the retail margins,” he suggested.

The CII is also mooting a simplification of the Goods and Services Tax (GST) regime with fewer rates and resolution of anomalies in norms relating to taxes deducted at source (TDS) and tax collected at source (TCS) to spur the economy amid the heightened uncertainty caused by the conflict in Europe and surging input costs.

Mr. Narendran was sanguine about the prospect of the central bank hiking interest rates, emphasising that it will be ‘unfair’ for industry to expect an accommodative stance when inflationary pressures are high. “To be fair to the RBI, it has been very prudent so far and too much inflation is also not good for economic activity,” he said, adding that the government must persist with its infrastructure spending focus as it will prop up a lot of sectors.