Fuel duty cut causes government ₹1 lakh crore losses:’Creating negative atmosphere about country’s growth is wrong’, says finance minister

Finance Minister Nirmala Sitharaman said on Monday, May 25, 2026 that reducing excise duty on petrol and diesel would result in a revenue loss of ₹1 lakh crore to the government. Along with this, she dismissed the pessimistic atmosphere being created regarding India’s economic growth and defended the country’s economic situation. The Finance Minister made this statement at the 37th Foundation Day celebration of Small Industries Development Bank of India (SIDBI) in Mumbai. Oil companies increased prices for the fourth time in 10 days Relief to common people from reduction in excise duty The reduction in excise duty by the government has resulted in consumers across the country paying lower prices at petrol and diesel pumps. This step provides direct relief to families and businesses at a time when global energy markets remain under deep pressure due to the ongoing crisis in West Asia. India’s challenges are primarily external Finance Minister Sitharaman said that whatever pressure is visible on the Indian economy is not due to India’s own policies but mainly due to factors outside the country’s borders. She said that India remains one of the fastest-growing major economies in the world. Several high-frequency indicators prove that industrial demand and economic momentum in the country continue to remain strong. The Finance Minister said that the challenges before us are more external than internal. We need foreign exchange for importing gold, fuel, and fertilizers. All three of these are affected by global commodity cycles and currency fluctuations. Creating wrong narrative about the economy is not right Nirmala Sitharaman gave a direct response from the Mumbai platform to those who are trying to cast doubt on India’s economic achievements during this period of external pressures. She said that some sections want to criticize our own achievements amidst the challenges arising from the West Asia crisis. She termed such comments as completely wrong and inappropriate. The Finance Minister said that some people are deliberately trying to create a pessimistic narrative (atmosphere), which is absolutely not correct. Facing Criticism on the Domestic Front The Finance Minister’s comment came at a time when there is a debate in the country about India’s growth rate and its quality. Critics are constantly targeting the government over increasing pressure on domestic consumption, inflation, and currency fluctuations. Strict Instructions to Government Companies While discussing the broader economy and fuel prices, the Finance Minister delivered a stern and direct message to Public Sector Undertakings (PSUs/government companies). She told government companies to strictly comply with the mandatory 45-day deadline set for payments to Micro, Small and Medium Enterprises (MSMEs) and clear their dues on time. Excise duty on petrol-diesel was reduced by ₹10 Meanwhile, on March 27, the government had reduced the special excise duty by ₹10 to keep petrol and diesel prices stable. The duty on petrol was reduced from ₹13 per litre to ₹3, while on diesel it was reduced from ₹10 to zero. The central government was collecting a total excise duty of ₹21.90 per litre on petrol. After the reduction in Special Additional Excise Duty, it had come down to ₹11.90. Similarly, the total Central Excise Duty on one liter of diesel had decreased from ₹17.8 to ₹7.8. This decision by the government was to keep petrol-diesel prices stable. Due to this decision, petrol-diesel prices did not increase. What is Excise Duty? This is an Indirect Tax levied by the central government on products manufactured or sold within the country (such as petrol-diesel). A reduction in this provides relief to customers, but directly impacts the government’s treasury (revenue). What is the 45-day rule for MSME? According to government rules, any large or government company is required to make payment to small industries (MSME) within 45 days of receiving goods or services, so that small businesses do not face cash shortage.