Finance minister P Chidambaram presented the 2014 interim budget on Monday, saying the economy was more stable today than two years ago. He sought to win over key sections such as scheduled castes, minorities, women, farmers and army personnel with more money for their welfare while pleasing the middle class with excise cuts to make cars, mobile phones and items of daily consumption cheaper. These announcements are expected to leave many smiling. We take a look:
Cars/SUVs: Excise duties reduced by 4% for small and mid size cars, 3% for large cars and 6% for SUVs. The reduction was much-needed for an industry that is poised for a second consecutive annual decline in sales.
Impact: Prices of cars would come down by Rs. 8,000-150,000 while SUVs would cost less by Rs. 40,000-120,000. It should bring consumers back into the showrooms.
Motorcycles and scooters: Excise duties reduced by 4% for all two-wheelers. Duties also reduced for trucks, buses and chasis.
Impact: Motorcycles would be cheaper by Rs. 1,500 for commuter bikes and Rs. 10,000 for high end bikes. Scooters will also see a similar reduction in price.
Capital goods: The excise duty for capital goods such as televisons, refrigerators, heavy machinery, boilers, electrical machinery and sound recorders has been reduced from 12% to 10%.
Impact: Capital good manufacture gets a boost and food product items get cheaper.
Consumer non-durables: Excise duty for non-durable products such processed food, clothing, daily utility items such as soap slashed from 12% to 10%.
Impact: There will be a slight reduction in the price of these products.
Mobile handsets: In order to provide a fillip to manufacturers of mobile handsets within the country, the finance minister decreased the excise duty from 10% to 6% for all categories of handsets. This has been done to encourage domestic production of handsets and will offer further boost to develop the domestic mobile capabilities.
Impact: A marginal drop in prices of mobile handsets in the coming months.
Cord blood banks: Cord blood banks, which store placental umbilical cords for future use, have been exempted from service tax net.
Impact: The service will become cheaper and expected to gain popularity.
These are some popular products that will become cheaper after the iterim budget:
Commercial vehicles, computers, printers, keyboards, mouse, hard disks, vacuum cleaners, dish washers, water coolers, torch lights, scanners, digital cameras, hair dryers, electric irons, microwave oven, MP3 players and DVD Players.