Centre, states need to coordinate to reduce taxes on petrol, diesel to bring down prices: RBI Governor

  • ‘Taxes on diesel, petrol need to be reduced in a calibrated reduction manner’

  • ‘Petrol and diesel prices do have an impact on the cost of manufacturing, production’

New Delhi: Reserve Bank of India (RBI) Governor Shaktikanta Das has said that there is a need for coordinated action between the Central government and the states in order to reduce the bevvy of taxes levied on petrol and diesel so that their prices could be brought down. Speaking at an event organised by the Bombay Chamber of Commerce on Thursday, Das said, “There is a need for coordinated action between the centre and the states because there are inherent taxes levied by both.” the governor said. He added that taxes need to be reduced in a calibrated reduction manner.

High petrol and diesel prices have impact on inflation: RBI Governor

The RBI Governor said that the Centre and the state governments have pressures to generate revenue and are required to spend more to aid the economy in tiding over the slowdown unleashed by the COVID-19 pandemic. “So the revenue requirement and the compulsion of the governments are fully understood. But having said that the impact on inflation also is something, which comes in from the fact that petrol and diesel prices do have an impact on the cost of manufacturing, production…,” said Das. 

Approach papers on digital currency soon: RBI Governor

Commenting on the RBI’s digital currency, Das said that work is going on this front and the Central bank will release some broad guidelines and approach papers on it soon. The Governor also said that the RBI has some concerns about cryptocurrencies and they have been communicated to the government. 

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Commenting on non-performing assets (NPAs), Das said that there is growing realisation among banks with regards to dealing with NPAs and they are making provisions in their books for stressed assets. He added that the RBI has also sharpened and deepened its supervisor methods and is doing deep dive into areas of banking which were not done earlier. “We have a precise idea of build-up of stressed assets in banks and as soon as we see a sign of stress, we immediately enter into a discussion with the banks and proactively deal with the problems,” he said. Das also asked state-run and private banks to improve the credit appraisal processes.

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