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Excise Ordinance gets President's nod

President K R Narayanan on Thursday issued an ordinance amending the Central Excise Tariff Act to arm the finance ministry with emergency power to more than double the duties from the present level, official sources said.

The ordinance, cleared by Cabinet on Tuesday, would enable the government to raise excise duties on petro products to garner an additional Rs 20 billion in the current year to meet the fiscal deficit.

Though the duty is likely to be raised substantially, it would not be passed on to the consumers through a hike in prices, the government has assured. The excise hike would balance the reduction in global oil prices.

Earlier in the day, Finance Minister Yashwant Sinha had said: "We are awaiting the President's nod. There is no need to panic,"

Meanwhile, some sections think that the excise duty on petro products should not be increased immediately and the government should wait till the Budget.

This possibility emanates from the fact that administered price mechanism is to be dismantled from April, 2002 and, hence, the raising of excise duties to balance the lower international oil prices could wait till then.

However, considering a wider fiscal deficit due to poor revenue collections this year, government could mop up additional resources through hike in excise on petro products without actually raising the prices.

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