Fiscal Deficit
Can manage FY27 fiscal gap despite petrol, diesel excise duty cut, says Sitharaman
This story was originally published at 18:32 IST on 27 March 2026
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--Sitharaman: Will be able to manage fisc stance in FY27 despite excise cut
--CONTEXT: Sitharaman replying to discussion on Finance Bill in Rajya Sabha
--Sitharaman:Excise cut on fuel to safeguard people from oil price volatility
--Parliament passes Budget for FY27
NEW DELHI – Finance Minister Nirmala Sitharaman Friday said the government will manage its fiscal deficit for the upcoming financial year despite foregoing revenue from the cut in excise duty on petrol and diesel. The government will try to mobilise non-tax revenues to a greater extent, she said in the Rajya Sabha.
Based on the downward revision in India's nominal GDP as per the new series, the fiscal deficit for FY27 is pegged at 4.5% of GDP, Minister of State for Finance Pankaj Chaudhary had said Tuesday. This is 20 basis points higher than the Budget estimate for fiscal deficit in FY27.
The government is expected to face challenges in meeting the fiscal deficit target for FY27 after it lowered excise duty on petrol to INR 3 per litre from INR 13 per litre and that on diesel to zero from INR 10 per litre. This was done to help oil-marketing companies absorb the impact of a 52% jump in the price of Brent Crude oil to over $100 a barrel since the start of the US-Israel war on Iran on Feb. 28.
The government is likely to incur a revenue loss of INR 70 billion fortnightly due to the cut in excise duty on petrol and diesel, Central Board of Indirect Taxes and Customs Chairman Vivek Chaturvedi said Friday. The government also levied an export duty of INR 21.50 per litre on diesel and INR 29.50 per litre on aviation turbine fuel, which is expected to earn INR 15 billion fortnightly, Chaturvedi added.
With the reduction in excise duty, the government is taking the burden of higher crude oil prices, Sitharaman said. This will ensure oil companies buy more crude oil and keep domestic supply uninterrupted, she added.
"There should not be burden on people of India, that is the prime minister's guidance to me," Sitharaman said in the Upper House, which returned the Finance Bill and the Appropriation Bill, leading to the Parliament passing the Union Budget for FY27. End
US$1 = INR 94.81
Reported by Shubham Rana
Edited by Ashish Shirke
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