• Amid widening fiscal deficit, Prime Minister’s economic advisory panel suggested aligning diesel prices to global market in a phased manner and also raising excise and service taxes to pre-crisis level of 12 per cent.
  • Chairman of Prime Minister’s Economic Advisory Council (PMEAC) C. Rangarajan also pitched for deregulation of urea prices, while releasing the Review of the Economy: 2011-12.
  • The government expects that its subsidy bill would increase by Rs 1 lakh crore to Rs 2.34 lakh crore, mainly on account of higher outlay towards fertiliser, food and oil.
  • On improving the tax to GDP ratio, Mr. Rangarajan said the excise duty and service tax should be increased to pre-crisis level, a move which will bring in additional Rs 35,000 crore.
  • Before the economic crisis, service tax and excise duty rates were at 12 per cent, but as a stimulus the government had brought them down to 10 per cent in 2008-09.