Central Government reduced the Excise duty and Service Tax by 2 percent. Excise duty has been reduced from to 10 to 8 percent and Service tax from 12 to 10 percent. Government earlier was not ready to reduce the taxes and duties in the Union Budget, and this was much criticized as the industry is badly affected by global financial crisis. New decision comes in the wake of these criticisms.

Import duty of Naphtha for Power usage has also been reduced. The four percent excise duty cut, declared along with the stimulus package in Dec 08 will be continued after Mar ’09 also. These announcements were made by Finance Minister Pranab Mukharjee in his reply speech to budget discussions. Parliament yesterday approved the Budget with sound vote.

Excise duty of cement is reduced from 10 to 8 percent. This will reduce the price of Cement. Excise duty of Cement, that was either Rs 290 or 10% per ton, will be reduced to either Rs 230 or 8% per ton.

Pranab ruled out the criticisms that the Industrial world was not at all considered in the Union Budget. The Budget presented at a time that is very close to the elections, should consider the Constitutional rulings. Steps taken so far by Reserve Bank and Government will help to reduce the impact of financial crisis, but this will take some more time. All the banks have been provided enough liquidity. He also added that Reserve bank has pumped Rs 4000 billion to the financial system of the country starting from last September.

Even though the clear impact of recession is still not clear, Country will surely overcome this crisis. We should be confident about our economy. The growth rate has come down from 9 to 7.1%, still India doesn’t have a problem like other developed countries. Mukarjee also urged the state Government to come forward and take effective actions to tackle financial crisis.