Reserve Bank of India (RBI) Governor Shaktikanta Das on Thursday urged the central and state government to work in a coordinated manner to reduce taxes on petrol and diesel prices.

“There is a need for coordinated action between the centre and states to bring down indirect taxes levied on petrol and diesel,” said Das adding that calibrated reduction of taxes was important.

Emphasising that COVID induced stress has put pressure on the government to shore up its revenue, Das said “both the centre and the state governments have their revenue pressures and they are required to spend high sums of money to enable the country and the people to come out of the COVID-19 pandemic stress.”

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“But having said that, the impact on inflation also is something which comes in from of the fact that petrol and diesel prices do have an impact on the cost of manufacturing, production,” the Governor added.

(With inputs from PTI)