India Inc, traders and exporters have welcomed the Centre's move to slash excise duty on auto fuels and urged states to follow suit to provide more relief to consumers.
They said the price cut would lower inflation on account of lower cost of transportation.
“CII welcomes the government's move to cut excise duty on fuel, which will help bring down inflation levels. The government's swift action shows its intent to bring down the burden on the common man, in addition to bringing down input cost for many sectors,'' CII President Sanjiv Bajaj stated.
He expressed hope that following the Centre, state governments will also respond in the same manner, bringing further relief.
Assocham Secretary General Deepak Sood tweeted expressing gratitude to the government ''for anti-inflationary measures'' including the excise cut on petrol and diesel. He said these measures ''will have a positive spiral impact'' on reining in inflation.
The Confederation of all India Traders (CAIT) said the fuel price cut will lead to reduction in prices of everyday items by at least 10 percent on average and similarly prices of other commodities should also come down because the transportation of raw materials will also be cheaper now.
The traders' body also nudged states to follow the footsteps of the central government and reduce the rates of Value Added Tax (VAT) to provide substantial relief to the public from inflation.
President of industry chamber PHDCCI Pradeep Multani said ''at this juncture, states should also come forward to reduce the excise duties where there is price escalation''.
He added that the efforts of state governments would go a long way to help India's growth remain intact.
Hailing the decision of reduction in central excise duty on petrol and diesel, reduction in import duty on raw material of steel and plastic and increase in export duty on iron ore & steel intermediates, President of exporters' body FIEO A Sakthivel said these measures will bring down the domestic prices of key inputs thereby softening inflation.
This will also add to the competitiveness of the manufacturing and export sector and will further push value-added exports from the country, he stated.
Petrol price on Sunday was slashed by Rs 8.69 a litre and diesel by Rs 7.05 per litre following the government cutting excise duty on auto fuels to give relief to consumers battered by high fuel prices that has also pushed inflation to record high.
The government on Saturday announced a record Rs 8 per litre cut in excise duty on petrol and Rs 6 per litre reduction on diesel.