From reduction in petrol and diesel prices to income tax exemption ... How much relief will the common people get in the new year?

Fuel Price in India: If the government cuts excise duty, then the price of petrol and diesel will also be reduced. The industry body has said that this exemption should be given to increase consumption, especially at low income levels, as fuel prices increase inflation significantly.

Budget 2025-26: The common people facing inflation can get great relief in the new year. The Confederation of Indian Industry (CII) has suggested reducing excise duty on fuel in its suggestions for the general budget for the financial year 2025-26.

In such a situation, if the government cuts excise duty, then the price of petrol and diesel will also be reduced. The industry body has said that this exemption should be given to increase consumption, especially at low income levels, as fuel prices increase inflation significantly.

Apart from this, CII has said that the budget can also consider reducing the marginal tax rate for personal income up to Rs 20 lakh per year. This will help speed up the cycle of spending and high tax income. The recommendations also pointed out that the difference between the ceiling rate of 42.74 per cent and the normal corporate tax rate of 25.17 per cent is higher for individuals.

Inflation reduces purchasing power

Inflation has dampened the purchasing power of low- and middle-income earners. "The central excise duty is about 21 per cent of the retail price of petrol and 18 per cent for diesel. Since May 2022, these tariffs have not been changed in line with the nearly 40 per cent reduction in global crude oil prices.

Reducing excise duty on fuel will help reduce overall inflation and increase disposable income. Chandrajit Banerjee, Director General, CII, said while domestic consumption has been critical to India's growth journey, inflationary pressures have dampened the purchasing power of consumers to some extent.

Suggestion to start spending vouchers

He said the focus could be on increasing disposable incomes and sustaining the economic momentum through government intervention. CII suggested introducing spending vouchers targeting low-income groups so that demand for specific goods and services can be boosted in a given period.

Vouchers can be designed to be spent on specific goods and services and can be valid for a fixed period (say 6-8 months) to ensure spending. It also suggested that the government should increase the annual payment from Rs 6,000 to Rs 8,000 under the PM-KISAN scheme.