In its Budget suggestions for 2025-26, industry body CII has recommended lowering the excise duty on fuel to boost consumption, especially at the lower-income level.
Confederation of Indian Industries (CII)
In its Budget suggestions for 2025-26, industry body CII has recommended lowering the excise duty on fuel to boost consumption, especially at the lower-income level.
It suggested that the budget could also consider reducing marginal tax rates for personal income up to Rs 20 lakh per annum. This would help trigger the virtuous cycle of consumption, higher growth, and higher tax revenue.
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The central excise duty alone accounts for approximately 21% of the retail price for petrol and 18% for diesel.
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“Since May 2022, these duties have not been adjusted in line with the approximately 40 per cent decrease in global crude prices. Lowering excise duty on fuel would help reduce overall inflation and increase disposable incomes,” CII said.
Asserting that the gap between the highest marginal rate for individuals at 42.74% and the normal Corporate Tax Rate at 25.17%, is high, it said, inflation has reduced the buying power of lower and middle-income earners.
CII has also recommended an increase in the daily minimum wage under the MGNREGS from Rs 267 to Rs 375, estimating that this will entail an additional expenditure of Rs 42,000 crore.
Further, it urged the government to raise the annual payout under the PM-KISAN scheme from Rs 6,000 to Rs 8,000. Assuming 10 crore beneficiaries, this will entail an additional expenditure of Rs 20,000 crore.
CII also suggested introducing consumption vouchers targeted at low-income groups to stimulate demand for specified goods and services over a designated period.
Further, CII also sought an increase in the unit costs under the PMAY-G and PMAY-U schemes, which have not been revised since the scheme’s inception.
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