Punjab Govt Raises Fuel VAT, Ends Power Subsidy to Address Fiscal Crisis
Highlights:
- Punjab increases VAT on petrol by 61 paise per litre and on diesel by 92 paise per litre.
- The state expects to generate an additional ₹395 crore from diesel and ₹150 crore from petrol annually.
- Electricity subsidy of ₹3 per unit for consumers up to 7 KW load has been revoked.
- Bus fares have been raised by 23 paise per km as part of broader economic measures.
News:
The Punjab government has announced a hike in the value-added tax (VAT) on petrol and diesel, with an increase of 61 paise per litre on petrol and 92 paise per litre on diesel. This decision was approved by the Punjab Cabinet on Thursday during a meeting led by Chief Minister Bhagwant Mann.
State Finance Minister Harpal Singh Cheema, following the Cabinet meeting, explained that this VAT adjustment is intended to generate additional revenue for the state. The government anticipates that this increase will bring in an extra ₹395 crore annually from diesel sales and ₹150 crore from petrol sales.
This move is part of the Punjab government's broader efforts to improve its fiscal health. Cheema highlighted that the additional funds from the VAT hike will be used to support various development projects and meet the state's financial obligations.
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In a significant decision, the state government has also withdrawn the ₹3 per unit electricity subsidy previously provided to consumers with loads up to 7 KW. Additionally, bus fares have been raised by 23 paise per km, further contributing to the state's revenue generation efforts amidst its ongoing fiscal challenges.