Fiscal compulsions might prevent Pranab Mukherjee from granting significant tax concessions. So, the chances of any tax breaks in the Budget are slim, concluded a Business Today panel that discussed Finance Minister's options.

In its pre-Budget memorandum to the Finance Ministry, the industry chamber has recommended continuation of 10 per cent standard rate of excise duty in the next financial year.

There has been a vociferous campaign to raise prices of diesel cars either by removing the excise benefit small diesel cars receive or imposing a Rs 80,000 'Diesel Tax' on all vehicles.

According to sources, basic excise duty on branded diesel is Rs.3.75 per litre and the government proposes to bring it down to Rs.1.15 per litre.

In order to discourage consumption of subsidised diesel by personal vehicle owners, the Petroleum Ministry had suggested the imposition of higher duty on purchase of diesel cars.

Centre for Science and Environment charged the car industry with getting desperate to prove that cars use negligible amount of diesel in order to block the demand to put higher taxes on them.

While the customs duty collection realisation during the month declined by 10.9 per cent to Rs 10,126 crore, central excise realisation dropped marginally by 0.3 per cent to Rs 11,417 crore, Finance Ministry data shows.

The gross direct tax collection rose to Rs 1,54,360 crore during the first five months of the current fiscal, up by 25.89 pr cent from Rs 1,22,618 crore in the corresponding period a year ago, an official statement said.

Maruti shares dropped 1.2 per cent to close at Rs 1,200.75 and Tata Motors fell 1.5 per cent to Rs 913.35 on BSE. The losses were sharper for M&M, which fell 4.5 per cent.

US Treasury Secretary Timothy Geithner and Union Finance Minister Pranab Mukherjee harped on the continuing India growth story, underpinned by robust domestic demand and high savings, at a meeting in Washington on June 28.

Ruling out any rollback of the recent hike in prices of petroleum goods, Finance Minister Pranab Mukherjee says the decision to cut duties would not impact the fiscal deficit of the Indian government.

The heavy tax burden borne by the consumers of petroleum products is reflected in the fact that they contribute to more than 40 per cent of the Central government's excise collections and over one-third of the total revenue of state governments.

Despite one of the steepest hike in fuel prices, state-run oil firms will still end the fiscal will a whooping Rs 121,700 crore revenue loss on selling diesel, domestic LPG and kerosene at government rates.

Finance Minister Pranab Mukherjee expresses hope that state governments would reduce their taxes to provide relief to consumers after the hike in petroleum products.

The hike in LPG by a massive Rs 50 per cylinder, of diesel by Rs 3 a litre and kerosene by Rs 2 per litre will add to the crushing burden on household budgets already stretched with soaring prices of essential foodstuffs. Headline inflation in May has already crossed the nine per cent mark.

Biting the bullet, government on Friday hiked the price of diesel by Rs 3 a litre, kerosene Rs 2 a litre and cooking gas by a steep Rs 50 a cylinder to raise Rs 21,000 crores, and slashed customs and excise duties on petroleum products, sacrificing Rs 49,000 crore a year.

Ahead of the much anticipated meeting of a high power panel of ministers, Oil Minister S Jaipal Reddy on Friday said his ministry has made no specific proposal on increasing auto and cooking fuel prices.

A high powered ministerial panel is likely to meet on Friday to consider a hike in diesel and domestic LPG prices as well as a cut in duty rates to combat the high cost of crude oil.

The EGoM has not met since June last year even though crude oil prices have spiralled upward by over 50 per cent.

The government has been relentlessly hiking the price of petrol and burdening it with heavy taxes as it sees it essentially as the rich man's fuel.