Rajasthan Govt Cuts VAT On Petrol, Diesel; Hikes DA Of Employees By 4%

With the reduction in VAT, consumers can expect some respite in fuel costs.

File Photo

New Delhi: The Rajasthan government on Thursday announced a 2 percent reduction in VAT on petrol and diesel and a 4 percent hike in dearness allowance of employees and pensioners ahead of the general elections. The decisions will become effective from Friday morning.

The government announced a 4 percentage point hike in dearness allowance of employees and pensioners on the lines of the Centre. The decisions were taken in the state cabinet meeting held here on Thursday evening.

Speaking with reporters after the meeting, Chief Minister Bhajanlal Sharma said, "There were discrepancies regarding the prices of diesel and petrol in Rajasthan. We have removed this anomaly and have reduced the VAT rate by two percent."

He said that due to a two percent reduction in VAT on petroleum products and steps taken by oil marketing companies, the prices of petrol and diesel will come down in the state.

The Chief Minister said that the reduced prices on petrol and diesel will be applicable from 6 am on Friday, March 15. This will put a burden of approximately Rs 1500 crore on the state government.

"We have removed the anomalies and also made diesel and petrol cheaper." Similarly, the cabinet decided to increase the dearness allowance of state employees by 4 percentage points.

Sharma said, "In line with the central government employees, we have increased the dearness allowance by four percent. 50 percent dearness allowance will be payable from January 1, 2024."

"Earlier, 46 percent dearness allowance was being given to the state government employees. We have increased it by four percent to 50 percent."

About eight lakh employees and 4.40 lakh pensioners will benefit from the decision. This will put an additional burden of about Rs 1,640 crore on the state government annually.