Tuesday, February 28 2006 14:19 Hrs (IST) - World Time -

New Delhi: Aerated drinks and small cars are to cost less following a proposed 8 per cent reduction in excise duty.

A small car, for this purpose, would be one not exceeding a length of 4,000 mm and with an engine capacity not exceeding 1,500 cc for diesel cars and 1,200 cc for petrol cars.

Presenting the Budget for 2006-07 in Lok Sabha today (Feb 28 2006) Finance Minister P Chidambaram said it was proposed to reduce excise duty on aerated drinks and small cars from 24 per cent to 16 per cent.

He said the Government's intention was to converge all rates at the CENVAT rate, which is now at 16 per cent.

The Minister expressed confidence that the industry will seize the opportunity to make India a hub for the manufacture of small and fuel efficient cars.