Rajasthan Slashes VAT on Fuel, Boosts Dearness Allowance

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In a significant move ahead of the general elections, the Rajasthan government on Thursday, March 14, announced a 2% reduction in Value Added Tax (VAT) on petrol and diesel, along with a 4% increase in dearness allowance (DA) for state employees and pensioners.

VAT Reduction on Fuel

To address discrepancies in fuel pricing, the state government has decided to reduce the VAT rate on petrol and diesel by 2%. This reduction aims to bring down the prices of these fuels in Rajasthan and provide relief to consumers.

The revised fuel prices will come into effect from 6 am on Friday, March 15. This decision is expected to impose an approximate burden of Rs 1500 crore on the state government.

DA Hike for Employees and Pensioners

In line with the decision taken by the central government, the Rajasthan government has approved a 4 percentage point hike in DA for its employees and pensioners. This increase will bring the DA to 50% of the basic pay, effective from January 1, 2024.

Previously, state government employees were receiving a DA of 46%. The 4% hike will benefit approximately eight lakh employees and 4.40 lakh pensioners in the state. However, this decision will result in an additional annual burden of about Rs 1,640 crore on the state government.

The Rajasthan government's decisions to reduce VAT on fuel and increase DA for employees and pensioners are significant steps aimed at providing relief to citizens and addressing economic concerns. These measures are expected to have a positive impact on the state's economy and the lives of its residents.