The Punjab government on Thursday approved the increase in value-added tax (VAT) on petrol and diesel. VAT on petrol has been increased by 61 paise per liter and on diesel by 92 paise per liter. The decision in this regard was taken in a cabinet meeting chaired by Chief Minister Bhagwant Mann here.

Addressing the media after the meeting, Finance Minister Harpal Singh Cheema said that a decision has been taken to increase VAT on petrol and diesel. He said that VAT will be increased by 61 paise per liter on petrol and 92 paise per liter on diesel.

Cheema said the increase in VAT on fuel would generate additional revenue of Rs 395 crore from diesel and Rs 150 crore from petrol.

This decision has been taken amid the Punjab government's extensive economic efforts to strengthen its fiscal position. Cheema stressed that the additional revenue generated from this increase in VAT will contribute to financing various development projects and meeting the financial needs of the state.

The state government has also decided to eliminate the power subsidy of Rs 3 per unit for consumers with loads up to 7 kW. In another significant move, it has hiked bus fares by 23 paise per kilometer.

The Aam Aadmi Party (AAP) government aims to save Rs 1,500 crore annually by discontinuing the power subsidy, which was originally implemented by the previous Congress government led by Charanjit Singh Channi.