The recent hike in excise duty on petrol and diesel, which has happened three times this fiscal year, will help the government to collect an additional Rs 10,000 crore.
The increase in earnings will benefit the government to maintain a fiscal deficit at 3.9 per cent of GDP in current financial year ending March 2016.
With a poor showing with regard to stake sale in PSU companies, the government has so far raised only Rs 12,700 crore out of a targeted Rs 69,500 crore. The likelihood of any disinvestment sale in the remaining three months of 2015-16 is poor.
The Finance Ministry has admitted that there would be a shortfall of around Rs 50,000 crore in disinvestment proceeds and about Rs 30,000-40,000 crore in direct taxes, but expressed optimism that higher realisation from indirect taxes as well as non-tax revenues will make up for the deficit.
The government has raised excise duty on petrol and diesel three times in last two months and by seven times since November 2014.
The three excise duty hikes this fiscal, totalling Rs 2.27 per litre on petrol and Rs 3.47 a litre on diesel (in the NCR), will yield the government the said additional revenue during the remainder of current fiscal. Taken together with four excise duty hikes between November 2014 and January 2015, levies on petrol has gone up by Rs 10.02 a litre and that on diesel by Rs 9.97 per litre.