More and more states seem to be responding to the Finance Minister's appeal to reduce duty on oil products. Latest to join the list are Maharashtra and Rajasthan.

The Maharashtra government today announced reduction in value added tax (VAT) on diesel and kerosene. This will lead to diesel becoming cheaper by around 72 paise per litre and kerosene price going down by 28 paise a litre.

Government in Rajasthan too announced duty cuts. LPG cylinders in Rajasthan will cost Rs 25 less and diesel becomes cheaper by 54 paise per litre. The government has also decided to slash taxes on kerosene.

The moves comes on a day, when finance secretary Sunil Mitra said that the duty cuts will not hurt the deficit targets, if indirect tax collections continue to rise.  He also clarified that the total revenue forgone from the duty cuts will only be Rs 25,000 crore and not Rs 49,000 crore as earlier believed.

"Indirect tax is targeted to grow at about 14-15%, but in the first two-and-a-half months of this year, we have seen growth of close to 36%. Now if we continue to grow at that rate and if there is no slowdown in that over the next three quarters I dont think it is going to be such a problem," he added.