Government Measures

Government of India is taking various measures to stabilize the economy. On 24th February the excise duty cut and factory duty cut were announced by government and even they have made changes in the service taxes. The taxes have been reduced to 10% from 12.36%. The exports have hampered a lot . Government may take the following steps for development they may dilute the export duty against the duty free import goods like capital goods. The refunds to exporter can be given on monthly basis rather than quarterly basis. Government is also planning to cut down the fuel prices. The Diesel prices would be reduced by 2 Rs and the petrol prices would remain unchanged. The consumption of diesel is 40 million tonnes as compared to 10 million tonnes of petrol in India. Fuel prices spurt in 2008 July as the crude oil blip to $ 145. The calculation of petrol prices is done in a following manner in the basic price of petrol the following tax are added which increase the price of petrol the taxes such as excise duty, education tax, dealer commission, VAT, crude oil custom duty, petrol custom, transportation charges. One barrel consists of approximately 160 liters. So also this is to be considered for arriving at price for per liter basis. The crude oil demand started getting weak and prices started cooling off with respect to decline in crude oil prices from $145 to $30 – 40 per barrel the prices of petrol were cut twice in last three months. If government wants to cut the fuel prices they have to do it before the dates of elections are announced. Government is taking steps to stabilize the economy. The monetary measures have been taken by the government now its turn of RBI to take few fiscal measures.