The government also withdrew the five per cent VAT on compressed natural gas besides bringing back the VAT for tea, coffee and cocoa to five per cent from the proposed 12.5 per cent.
The government on Monday approved Rs 8,000 crore (Rs 80 billion) in cash subsidy to state-owned fuel retailers to make up for half of the revenues they lost on selling diesel, domestic LPG and kerosene below cost in the third quarter.
A swift recovery in oil demand in India is not only helping the stability of the global market, it is giving huge fiscal headroom to the government in terms of additional excise duty.
The Oil and Natural Gas Corp has asked the government to review the scheme of sharing of liquefied petroleum gas and kerosene subsidy with upstream firms and said the scheme should not be extended beyond March 2004.
Indian state's generosity is not restricted to its poorest citizens.
The Oil Ministry has fixed the subsidy payout by upstream firms like Oil and Natural Gas Corporation and Oil India Ltd at Rs 15,546.65 crore (Rs 155.46 billion) for the April-June quarter.
Notwithstanding the robust turnaround in the financial performance for the June quarter (Q1FY24), stocks of state-run oil marketing companies have been in a downtrend in the last month. The fall comes on a rise in crude oil prices that have surged to a 7-month high of $88 a barrel. A busy political calendar in the months ahead that may see the government keep a lid on auto fuel prices is also a dampener, analysts said. Shares of Hindustan Petroleum (HPCL), Bharat Petroleum (BPCL) and Indian Oil (IOC) have shed 9-11 per cent since their respective earnings announcement between July 26 to August 4.
The state-owned oil retailing firms are seeking a Rs 40 per cylinder raise in the domestic cooking gas prices and a Rs 2 per litre hike in kerosene prices to offset the drastic cut in the subsidy provided by the government.
Stating that many people have not yet got the card and were being harassed by government agencies, Mamata Banerjee said that the Centre should make a single identity card which would be common for all purposes.
In an over an hour-and-a-half speech, Prime Minister Narendra Modi outlined his 15-month-old government's performance and his vision for the nation in the years to come.
The Bill could be introduced in Lok Sabha very soon.
Gandhi also raised the issue of rising prices of LPG cylinders and said crores of beneficiaries of the Ujjawala scheme are not able to afford a refill.
Upstream oil firms bear one-third of the revenue that retailers lose on selling diesel, domestic LPG and Kerosene at government-controlled rates.
The savings would be better spent and might actually reach the poor, says Rahul Khullar.
The government has ordered Oil and Natural Gas Corp (ONGC) to pay a near-record Rs 13,764 crore as fuel subsidy for the December quarter, a move that will dent the firm's profitability.
These are initiatives not commonly seen in economic administration.
The Oil Ministry has proposed a Rs 3-4.50 per litre hike in diesel price and Rs 100 in LPG rates along with raising the number of subsidised cooking gas cylinders for households to nine a year from the current cap of six.
The government chose moral persuasion to make people give up subsidies, notes Rahul Khullar.
The world's largest cash transfer programme has eliminated around 40 million ghost connections
The government does not seem inclined, at least in the petroleum sector, to effect sudden and steep upward price revisions to tame its huge subsidy burden and rein in fiscal deficit.
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The Oil Ministry on October 31 issued orders asking upstream oil and gas producers like ONGC and Oil India Ltd to give Rs 16,729.74 crore (Rs 167.29 billion) to make up for 47 per cent of the Rs 35,328-crore (Rs 353.28 billion) revenue that retailers lost on selling diesel, domestic LPG and kerosene at government controlled rates in second quarter.
The Petroleum Ministry has asked for Rs 26,000 crore (Rs 260 billion) as fuel subsidy for the third quarter of this financial year, but the finance ministry is inclined to provide only Rs 10,000 crore (Rs 100 billion) cash support.
Since international oil prices have fallen, the government's subsidy payout will fall by almost Rs 50 per cylinder to Rs 240.
The Bharatiya Janata Party on Friday filed a complaint with the Election Commission against the LIC seeking a ban on its new scheme in Bangalore, alleging it is aimed at propagating the Aadhar card and helping Nandan Nilekani who is contesting Lok Sabha elections from there.
Expectations are that the government will use the Union Budget to create an environment, which is conducive for growth.
With rupee falling to new lows, losses on diesel and cooking fuel have widened to their highest levels this year, upsetting the government's subsidy maths.
"From now onwards, women will not have to change their names in the passport after their marriage," Modi told a gathering of the Indian Merchants Chambers' ladies wing over a video conferencing. The government wants the woman of the house to be the priority in all of its development schemes, he added.
The deficit stood over Rs 8 trillion in the first seven months of the current financial year. Non-tax revenues, comprising transfers from the RBI and dividends of the public sector units, shored up the Centre's revenues.
With the rupee continuing to remain weak against the US dollar, losses on diesel have climbed to Rs 9.45 per litre, upsetting the government's subsidy maths.
A decision on raising diesel prices by Rs 3-5 per litre, kerosene by Rs 2 and LPG by up to Rs 50 per cylinder will be taken after UPA Chairperson Sonia Gandhi returns from US, top government officials said.
Venkaiah Naidu said Aadhaar will not be made mandatory till the entire population gets such cards or UID numbers.
Modi said there was a time when families would celebrate getting gas connections as if they have got home a Mercedes.
A new formula for pricing natural gas in the domestic market was determined; the decontrol of diesel prices was announced; and the scheme that directly transferred subsidies to bank accounts of users of liquefied petroleum gas (LPG) cylinders was modified and relaunched.
Prime Minister Narendra Modi on Monday morning addressed over 18,000 Indian Americans at the SAP Centre in San Jose.
In his first address to the nation, on the eve of 71st Independence Day, President Ram Nath Kovind hailed the government's demonetisation and GST decision.
'I'm pitching India for the strengths we offer, including the English language, engineers, doctors, nurses, professionals, innovative talent of startups.'
State-owned Indian Oil Corp (IOC) is losing Rs 151 crore per day in revenues on selling diesel, domestic LPG and kerosene below their imported cost, a company official said on Thursday.
Officials from State-run refiners contend that savings from purchase of Russian oil are used to offset a part of the losses in revenues from selling transport fuels and LPG at State-set rates.
Oil companies begin pilot testing work on direct LPG subsidy.
Policymakers should consider the challenges of beneficiary identification, distributor opposition and beneficiary financial inclusion.
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