New Delhi : India government on Saturday announced a series of changes to the tax structure levied on crucial commodities in a bid to insulate consumers from rising prices amid high inflation.

Finance Minister Nirmala Sitharaman announced a reduction in excise duty on petrol by 8 rupees per litre, and 6 rupees on diesel.

The new tax regime on petrol and diesel could result in a loss of about 1 trillion Indian rupees to the government in annual revenue due to the lower collection, she said.

The government also removed the import duty on anthracite, PCI coal and coking coal in a bid to reduce raw material costs for local market demand.

The latest measures will be effective from May 22, the government said in a notification. A litre of petrol currently costs 105.41 rupees, while diesel is at 96.67 rupees in New Delhi.

The government will also provide a fresh subsidy of 200 rupees per cooking gas for certain categories. The subsidy will have an annual revenue implication of nearly 61 billion Indian rupees, Sitharaman said.

The government was also working to reduce taxes on raw materials for plastic products to lower down the cost of final products.

Experts said the latest moves will likely increase fiscal concerns and raise doubts about government meeting its deficit target of 6.4% of GDP for 2022-23.

But inflation has become a major headache for Modi's government ahead of elections to several Indian state assemblies this year. A sharp jump in inflation meant input costs escalated for businesses.

The rise prompted the central bank to hike interest rates at an unscheduled policy meeting this month.