New Delhi: Finance Minister Jaswant Singh today (Jan 8, 2004) said the tax cuts announced today would not have any major impact on the revenue and the Government was expecting much better growth in the third quarter.

"Every tax measure has certain implications. The impact on revenue will be temporary. These measures will, in fact, greatly enhance growth and stimulate investment," he said.

He said the measures announced today were not with an eye on the impending election, but part of a continuous exercise and would not have any impact on budgetary process.

"These steps have not been taken in a fit of amnesia...budgetary process ko koi chot nahin aayi hai (budgetary process has not been hurt). Revenue outlook is very positive," the Minister said before leaving for a meeting of the National Democratic Alliance (NDA).

He said any delay in these economic initiatives would have delayed the prospects of economic growth.

The Finance Minister said without any doubt, a much better growth was expected in the third quarter. "The decisions announced today will further enhance growth."

Jaswant said Indian economic scenario is such that finance initiatives cannot be restricted to an annual Budget.

"Budget process should not be viewed in form of a mela, to be held for one day and after that 'ham khatiya biccha ke soin jaiyen', (we spread the cot and go to sleep)," he said.

The initiatives announced today have been taken after calculating all the steps and their budgetary implications, he said, adding that they were part of the overall Budget management.

The Minister recalled that in the Budget he presented last year, Government had given a commitment for further cut in customs duties.

The latest steps were in line with that promise and were aimed at increasing both investment and production.

"There are sectors like health and Information Technology, which are growing, so why delay giving them incentives?" the Finance Minister asked.

Economy is on the roll and the changes in the duty structure will give it a further impetus, stimulate investment, growth and confidence in India, he said.

Government also extended electronic filing of service tax returns to all 58 taxable sectors from the present 10 services.

To give a boost to emerging IT and electronics sector, it brought down customs duty to zero to five per cent on specified raw materials and inputs for manufacturing electronic components and optic fibres.

It also exempted from custom duty specified capital goods used for manufacture of electronic goods, which now attract 10 to 15 per cent duty. Recorded video compact discs and digital videodiscs have also been exempted from excise duty.

Liberalising baggage rules, Government said laptops and cinematographic films, exposed but not developed, brought as part of baggage have been exempted from customs duty. It enhanced the duty-free limit of quantity of alcoholic liquor and wines to two litres from the present one litre.

Besides, manufacturers would now be allowed to remove semi-finished goods and finished goods for further processing or testing without payment of excise duty.

A day ahead of the meeting of Indian diaspora, the Centre also accorded duty-free status to VCDs/VCRs, washing machines, PCs, laptop computers, refrigerators of upto 300 litre capacity and cooking range under transfer of residence.

Also, customs duty on 17 other items under transfer of residence has been halved to 15 per cent.