Manufacturing sector hails the budget announcements

The Finance Minister P Chidambaram’s interim budget might be called populist and unrealistic to some extent on the revenue receipt front, and difficult to achieve unless growth picks up. As many are of the view that FY15 fiscal deficit target for 4.1 percent may be revised upwards when the new government comes to power, while the assumption on tax front is termed too aggressive one. But amid all the analysis, one sector that is cheering the budget is manufacturing, Hailing the announcement of excise duty reduction for automobile sector, Commerce Minister Anand Sharma and Heavy Industries Minister Praful Patel have said the move would boost the growth of the sagging industry and generate employment. In the interim budget for the next financial year 2014-15, Finance Minister P Chidambaram has reduced the excise duty on small cars and motorcycles to 8% from 12%, that on sport utility vehicles to 24% from 30%, that on mid-sized cars to 20% from 24% and on large cars to 24% from 27%. He has also announced cut in excise duty on capital goods and consumer durables. The excise duty cut will be applicable up to June 20, 2014 and prices of automobiles, including cars, sports utility vehicles and two-wheelers, are set to come down. However, the government will lose Rs 1,000-1,200 crore over the next three and a half months due to reduction in excise duty.