"To give relief to the automobile industry which is registering unprecedented negative growth, I propose to reduce excise duty..," Chidambaram said while presenting the Interim Budget for 2014-15.
As per his proposal, excise duty on small cars, motorcycles, scooters and commercial vehicles has been cut to 8 per cent from 12 per cent earlier.
Likewise, the Sports Utility Vehicles will attract 24 per cent excise duty, down from 30 per cent earlier, while large cars that used to attract excise of 27 per cent will now be levied only 24 per cent.
While giving sops to the automobile sector, Chidambaram said: "I propose to make appropriate reductions in excise duty on chassis and trailers."
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Mobile phones manufactured in India could also see price moderation with the Finance Minister announcing a proposal to boost domestic manufacturing. However, a majority of mobile phones sold in India, even by domestic firms like Micromax, Lava and Karbonn, are imported.
However, Samsung and Nokia have manufacturing facilities in the country and the excise duty rejig may lower their cost of production.
Another daily use item, soaps that are manufactured in India can also witness a softening of prices.