| NEW DELHI
NEW DELHI Feb 17 The Indian government
announced a package of indirect tax cuts on Monday to breathe
life into spending and investment, and trumpeted its record of
growth and reform over the past decade in its last budget before
an election it looks set to lose.
Amid uproar in parliament as lawmakers shouted him down,
Finance Minister P. Chidambaram also announced that he would
contain the fiscal deficit for 2013/13 (April-March) at 4.6
percent of gross domestic product (GDP), below his target of 4.8
Indian businessmen watching the speech were further cheered
by his estimate that the fiscal deficit would shrink further to
4.1 percent in 2014/15.
Monday's budget was an interim exercise ahead of the
election due by May. Opinion polls predict voters will oust the
government led by the Nehru-Gandhi dynasty's Congress party amid
widespread discontent with its mismanagement of the economy,
high inflation and corruption scandals.
Chidambaram, struggling to deliver his speech above the din
of lawmakers angry over a plan to divide a southern state,
announced no major changes in tax rates.
However, he said factory-gate taxes on some capital goods
and consumer durables would be reduced to 10 percent from 12
percent, and excise duties on small cars, two-wheel and
commercial vehicles would be cut to 8 percent from 12 percent.
He also announced small-bore measures to soften student
loans and help retired members of the armed forces.
Asia's third-largest economy is facing its worst slowdown in
nearly a decade, with shrinking manufacturing, slower jobs
growth and high inflation.
Chidambaram said, however, that growth would recover to at
least 5.2 percent in the second of 2013/14 from 4.6 percent in
the first half.
Looking back at the two terms of rule under a Congress-led
coalition, Chidambaram said there had been an unprecedented
growth trend of 6.2 percent over the past decade and - rejecting
charges that the government was mired in a policy paralysis -
laid out a raft of reform steps it has taken.
(Editing by Kim Coghill)