The Maharashtra government on Thursday decided to reduce value-added tax on petrol by Rs 5 and on diesel by Rs 3 per litre.

The decision was taken at a meeting of the state Cabinet headed by Chief Minister Eknath Shinde and Deputy Chief Minister Devendra Fadnavis.

Shinde told reporters that the reduction in value-added tax will cost the state exchequer Rs 6,000 crore, The Indian Express reported. “We studied the financial situation and decided to reduce the VAT on petrol and diesel,” he said.

Fadnavis said that the decision was a great relief to Maharashtra’s residents. “This is our step towards the appeal made by [Prime Minister Narendra Modi] for [the] benefit to common citizens,” he said.

The Union government had slashed excise duty on petrol and diesel on November 4 and May 22. At that time, the Centre had urged state governments to cut value-added tax on fuels.

Maharashtra had not followed the Centre’s advice back then. However, in May, it cut the value-added tax on petrol and diesel by Rs 2.08 per litre and Rs 1.44 per litre, respectively, according to PTI.

Fuel prices constitute an important factor behind retail inflation. In June, country-wide inflation in fuel and light had risen by 10.39%, according to government data. Retail inflation as a whole fell marginally to 7.01% in June from 7.04% in May, the data showed.

Meanwhile, the state Cabinet also decided to implement the Swachh Maharashtra Abhiyan (Urban) 2.0 to ensure better sanitation in cities. The Cabinet also decided to allow farmers to vote directly in elections to Agricultural Produce Marketing Committees, or APMCs.

The state government also decided to revive a scheme to provide an honorarium to persons who were imprisoned during the Emergency from 1975 to 1977. The previous Uddhav Thackeray-led government had scrapped the scheme.