A Back of the Envelope Calculation: India’s Excise Duty Revisions from 2014 to 2025
India’s excise duty has been a topic of much discussion and debate over the past decade. With numerous revisions and changes, it has often been a cause of concern for both the government and the citizens. However, a closer look at the numbers reveals a different story. A back of the envelope calculation shows that between 2014 and 2025, the excise duty was revised around 16 times, of which rates were increased on about 13 occasions, while they were cut thrice. These numbers may seem alarming at first, but a deeper analysis will reveal the positive impact these revisions have had on the country’s economy.
Firstly, let us understand what excise duty is. It is a tax levied on certain goods manufactured or produced in the country. The revenue generated from this tax goes towards the development and welfare of the nation. It is an essential source of income for the government and plays a crucial role in the country’s economic growth. With this in mind, let us now delve into the revisions made in the past decade.
Between 2014 and 2025, the excise duty rates were increased on about 13 occasions. This may seem like a significant number, but it is important to note that these revisions were made to boost the country’s economy. The government recognized the potential of certain industries and increased the excise duty to encourage their growth. For instance, in 2017, the excise duty on mobile phones was increased to promote the ‘Make in India’ initiative. This resulted in an increase in domestic production and a decrease in imports, thereby boosting the country’s economy.
Moreover, the increased excise duty rates also helped in curbing inflation. By making certain goods more expensive, the government was able to control their demand and prevent inflation from rising. This not only helped in stabilizing the economy but also protected the purchasing power of the citizens.
On the other hand, the excise duty rates were cut thrice during this period. These cuts were made in response to the economic conditions at the time. In 2015, the excise duty on petrol and diesel was reduced to provide relief to the citizens from the rising fuel prices. This move was widely appreciated and helped in easing the burden on the common man.
Furthermore, the excise duty cuts also played a crucial role in reviving certain industries. In 2020, during the COVID-19 pandemic, the government reduced the excise duty on hand sanitizers and masks to make them more affordable for the citizens. This not only helped in controlling the spread of the virus but also supported the local industries that were struggling during the lockdown.
It is also worth mentioning that the excise duty revisions have not been limited to just increasing or decreasing rates. The government has also introduced various schemes and exemptions to promote certain industries. For instance, in 2016, the ‘Start-up India’ initiative was launched, which provided various tax benefits, including exemption from excise duty, to start-ups in the country. This move has encouraged entrepreneurship and has led to the growth of several successful start-ups.
In addition to this, the excise duty revisions have also been used as a tool to promote social causes. In 2019, the government increased the excise duty on tobacco products to discourage their consumption and promote a healthier lifestyle. This not only generated revenue for the government but also had a positive impact on the health of the citizens.
In conclusion, a back of the envelope calculation may show a high number of excise duty revisions, but a closer look reveals the positive impact they have had on the country’s economy. From promoting growth in certain industries to controlling inflation and supporting social causes, these revisions have played a crucial role in the development of the nation. It is a testament to the government’s efforts to create a strong and stable economy for the citizens. With the right policies and revisions, India’s excise duty is set to continue its positive impact in the years to come.
