Union Budget 1999-2000 Govt. of India Ministry of Finance

Budget Speech


Yashwant Sinha

Speech of Shri Yashwant Sinha
Finance Minister, Government of India
27th February, 1999

    but.gif (597 bytes)    Additional duty on High Speed Diesel Oil

64. Mr. Speaker, Sir, I now move on to my next proposal. I propose to garner additional revenue by way of an additional duty on High Speed Diesel Oil (HSD). Currently, international and domestic prices of crude oil and petroleum products are unusually soft, and it is felt that raising some additional revenue through this commodity would be an equitable method of resource mobilisation. Therefore, I propose an additional duty of Re. 1 per litre on imported and domestic HSD, the revenue from which will accrue entirely to the Centre. Of this duty, I propose to allocate half to support the initiatives in rural development and social sectors. The other portion of 50 paise of this duty as also the duty of Re.1 per litre levied with effect from 2.6.1998 will be converted into a statutory cess and transferred to the Central Road Fund. 30% of the Fund will be transferred to the State Governments for development and maintenance of State Roads. The balance amount will be utilised for development and maintenance of National highways and expressways and by the Ministry of Railways for construction of Railways over-bridges and Railways safety works at unmanned Railways crossings. This will cover the gap in the plan resources of the Ministry of Railways for the year 1999-2000. It is estimated that we will be able to collect an aggregate amount of Rs.4,591 crore as additional duty of excise and Rs.363 crore as countervailing duty on domestically produced and imported HSD over the year. The Ministry of Petroleum & Natural Gas will announce consequential changes in the price of HSD effective from midnight tonight. This will also fulfil in a large measure the will of Parliament reflected in Resolution dated 13th May, 1988, which contemplated earmarking a portion of the excise and customs duties on petrol and diesel to raise resources for development of roads.

65. In the last budget the Modvat adjustment allowed to manufacturing units had been capped at 95%. I propose to lift this cap on Modvat claims and restore it to 100%.





This page is prepared and maintained by
National Informatics Centre
Ministry of Finance, Government of India