The Narendra Modi government has announced a major discount on petrol and diesel prices with a dual motive of cushioning the impact of rising international prices and promoting cashless transactions through BHIM App. The government has announced a discount of 49 paise per litre on petrol and 41 paise per litre on diesel on using government’s flagship Bhim App to make the payment.
The central government has already cut excise duty on petrol and diesel by Rs 2 per litre, which brought down the prices drastically. Following the excise duty cut and a call for retail VAT cut by the central government, Gujarat, Maharashtra and Himachal Pradesh announced a cut in a retail VAT on fuel.
This is not the first time when the government has incentivised on petrol and diesel prices. During demonetisation, when the country was facing massive cash-crunch, the government had announced 0.75% discount on using Debit/Credit Cards, Mobile Wallets and Prepaid Loyalty Cards for buying fuel.
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However, the discount offered exclusively on BHIM App is aimed to push India towards a cashless society along with providing some respite to the common man. At a time when Indians are looking to save on petrol and diesel, this discount is also likely to boost the number of BHIM App downloads. By July this year, there were over 16 million downloads and 4 million active customer base on BHIM App. The government had, earlier, announced referral bonus scheme for individuals and a cashback scheme for merchants to promote the app. The government also provides discounts and cashback on various facilities like booking a hotel using the BHIM App, but with the need of the hour to lower the petrol and diesel prices, a discount is being offered on fuel as well.
The government, which earlier ruled out cutting excise duty on petrol and diesel saying it needed the revenue for capital investments, swung into action when a three-week rise in the international oil price pushed petrol price in Mumbai close to Rs 80 per litre. After making the excise duty cut of Rs 2 per litre on petrol and diesel, the centre then asked states to cut retail VAT. With Gujarat, Maharashtra and Himachal Pradesh slashing petrol and diesel prices, the consumer in these states will save further between Rs 2 and Rs 2.6 per litre.