The government will depend heavily on taxes levied on petrol and diesel to finance its biggest-ever ₹20 lakh crore economic package announced by Prime Minister Narendra Modi on Tuesday to revive the economy hit hard by Covid-19 pandemic.
Sensing the enormity of the situation and need for a larger economic package, the government on May 5, had raised excise duty on petrol and diesel by unprecedented level of ₹10 and ₹13 per litre. This itself will provide additional revenue of about ₹1,75,000 crore in FY21.
Moreover, the government can further raise duty on the two products by ₹3-6 per litre, thereby raising another ₹50,000-60,000 crore. So total earnings for the Centre from petroleum products itself could top ₹2,25,000 crore in additional revenue besides over ₹2,15,000 that it already gets in a year as excise revenue from the petroleum sector.