Describing the tax concessions announced today as another "stimulus", Finance Minister Pranab Mukherjee expressed hope that these measures would boost exports and encourage employment generation.
"It is another stimulus," he told reporters after passage of the Interim Budget by the Lok Sabha.
The tax concessions would entail a revenue sacrifice of about Rs 30,000 crore, Mukherjee said, adding, "It will have its desired impact, because we have given some concessions for the export sector, particularly those sectors which are employment generating like gems and jewellery, garments and handicraft."
Among other things, the government reduced general excise duty by 2 per cent to 8 per cent and cut service tax from 12 per cent to 10 per cent. Similarly, the excise duty on bulk cement was slashed from 10 per cent to 8 per cent.
Earlier, the government had announced two stimulus packages in December and January to boost the economy reeling under the impact of slowdown.
As part of the earlier stimulus packages, the government had reduced excise duty by 4 per cent and raised public expenditure especially in the infrastructure sector.
Besides, RBI came up with a host of monetary measures to inject around Rs 4 lakh crore of liquidity and signal soft interest rate regime.