Chennai,  Tamil Nadu Finance Minister P.T.R. Palanivel Thiaga Rajan on Tuesday said that the petrol prices were reduced by Rs 3 per litre in the state budget to bring in an immediate economic impact.

Responding to a question by AIADMK member Rajan Chellappa, he also said that the government had provided indirect incentives to provide relief for diesel users also.

Rajan said that by bringing in a reduction of Rs 3 per litre of petrol, 2 crore two-wheeler users are benefitted, adding that the state government had to do its own research on the number of petrol and diesel users as the oil companies were not parting with their statistics.

He said that the government would take further measures after monitoring the sale of diesel and petrol in the state for 30 days. He said that he had consulted Chief Minister M.K. Stalin and had decided not only to give relief but to increase the demand and spending power as well.

Rajan said that the statistics showed that fishermen, farmers, logistic companies and high-end cars were dependent on diesel and small cars operate on petrol.

He said that the state government had apprehensions on whether a reduction in input cost would reach the last mile as far as diesel is concerned even though a lot of trucks and lorries are operated using diesel. However, he said that regarding petrol, it was crystal clear that reduction in its fare would benefit the common man - the two-wheeler riders.

The Finance Minister also said that there is no need for a government if it was not doing anything and not increasing taxes, citing the example of late Chief Minister, M.G. Ramachandran, who had increased sales tax by one per cent for feeding poor children.

"A good government must tax the appropriate section at the appropriate time for the benefit of social and economic justice," he said, citing how the previous AIADMK government had increased the tax on diesel and petrol prices twice.