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Karunanidhi for excise duty cut on diesel

Special Correspondent

Writes to Manmohan Singh

CHENNAI: Chief Minister M. Karunanidhi on Thursday wrote to Prime Minister Manmohan Singh, requesting him to "consider reduction in excise duty on diesel by a minimum of Re.1 a litre."

Pointing out that Tamil Nadu had reduced sales tax on diesel when the Centre increased the price of petroleum products last time, Mr. Karunanidhi said this was done to control price rise.

"Considering the recent inflationary trends, the excise duty and levy on diesel, which is currently at Rs.4.98 a litre, needs to be reduced to bring down diesel prices," he said in a letter, a copy of which was released to the Press.

The reduction would help to check inflation.

Link with inflation

"You would agree that the price of petroleum products, particularly diesel, is a basic driver for inflation," he said. The Centre and the Reserve Bank of India had greater ability in terms of policy instruments to contain inflation than State Governments.

"Rising inflation is a matter of great concern to all of us... the Government of Tamil Nadu has been doing its best by providing a comprehensive social security net for the common man such as the supply of rice at Rs.2 a kg under the Public Distribution System, involving a huge subsidy of Rs.1950 crore during the current financial year," he said.

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