Finance Minister Pranab Mukherjee on Friday justified imposition of basic duty on petroleum prices saying that global crude prices were much softer than last year and there was no need to continue with the concession.
"Customs duty was withdrawn when the prices of petroleum reached as high as 122 USD per barrel. Now it is much softer and there is no reason to continue the same concession," he told reporters after presenting his budget in Parliament.
He said he had adopted a balanced approach in taxation proposals. "I have not imposed any duty which was not imposed earlier," he said.
In his Budget, Mukherjee proposed raising customs duty on petrol and diesel to 7.5 per cent from 2.5 per cent and excise duty by Re one a litre to Rs 14.35 and Rs 4.60 per litre on non-branded (normal) petrol and diesel respectively.
Crude oil quoted at USD 78 a barrel in Asian trade today compared to a high of over USD 147 a barrel in July 2008.
Mukherjee said he had not fully rolled back the excise duty as the industry was still in the process of recovery.
"The industrial growth, particularly in the manufacturing sector in the month of December clearly demonstrates the validity of my move," he said.
According to the Index of Industrial Production data, factory production grew 16.8 per cent in December, indicating pick up in economic activity.
Mukherjee said he had three considerations while proposing the budget -- how quickly can the economy come back nine per cent growth, to achieve fiscal consolidation and ensure inclusive growth.
"While formulating my budget, I had three considerations. First, how quickly I can come back to growth trajectory to achieve 9 per cent GDP growth, the second was the fiscal expansion we have to do in 2008-09, 09-10. How we can come back to the path of fiscal consolidation. The third approach which we had is inclusive growth," Mukherjee said.
He said as per the plan allocations announced in the budget, 37 per cent has gone to social sectors, 46 per cent has gone to infrastructure sector out of which 25 per cent is for rural infrastructure.
"On the path of fiscal consolidation, I think I have given the correct signal. As per the advance assessment, it is expected to be 7.2 per cent GDP growth for the year 09-10. I hope it will be a little higher.
"For the year 2010-11, I think we will be able to achieve what has been projected in the Economic Survey," Mukherjee said. PTI
