Dismantling APM
The dismantling of administered pricing will fetch the government a net bounty of Rs 720 crore. The Finance Ministry will mop up around Rs 7,200 crore from the sector through excise and customs duty hikes and special cesses and surcharges, but will spend only Rs 6,495 crore on subsidies.
Subsidy has been restricted to cooking gas and kerosene. Even the freight subsidy for farflung areas is confined to LPG and kerosene. The government will earn Rs 3,100 crore from the specific surcharge of Rs 6 per litre of petrol and excise duty of 32 per cent on the fuel.
An amount of Rs 2,400 crore will be extracted from ONGC as doubled cess on domestic crude. The enhanced customs and excise duties on kero-sene and LPG will yield another Rs 1,800 crore.
The government has effectively inflated the subsidy bill by jacking up the taxes on LPG and PDS kerosene.
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