Low on glitter, high on glamour

No major effect on household budget.

Nilah Shah, a 57-year-old housewife from Mumbai suburbs, had hoped this Budget would provide some relief to her sky-rocketing monthly budget. But all that the finance minister did was to offer duty cuts on some spices and asafoetida.

The finance minister proposed to decrease basic Customs duty on long pepper from 70 to 30 per cent, on asafoetida from 30 to 20 per cent and exempted service tax on transportation of cereals and pulses by road. But, tax experts say this will not have any major effect as it will be offset by increased diesel prices.

There are some indirect benefits of duty cuts given to components of consumer durables like water filters and microwave ovens. Tax experts said that reduced costs of these items by 8-10 per cent, if passed on to the consumers, could reduce the end prices to the tune of 4-5 per cent.

The real bad news comes in the form of excise duty on petrol and diesel being increased by Re 1 per litre. The duty rates on branded petrol and diesel will be Rs 14.35 and Rs 4.60 per litre, respectively. On unbranded products, this will be Rs 15.50 and Rs 5.75 per litre. “Clearly, this hike will adversely impact prices of goods, besides increasing your transportation budget as well,” said Mukhesh Dedhia, Director, Ghalla and Bhansali.

Those waiting for gold prices to come down to buy their favourite jewellery are in for disappointment. Jewellery prices may rise, as the Customs duty on gold and platinum has been increased from Rs 200 to Rs 300 every 10 grams — a rise of Rs 100 or 50 per cent. Similarly, the duty on silver has been increased by Rs 500, from Rs 1,000 to Rs 1,500.

Though the Budget is low on glitter, it is not low on glamour. A lipstick from Lakme may cost lesser now as the finance minister has lowered the excise duty on goods covered under the Medicinal and Toilet Preparations Act from 16 per cent to 10 per cent. This Act includes soaps, shampoos, creams, lotions apart from other make-up items.

Smokers beware. The finance minister, who quit smoking a few years back, is now going tough on smokers. “I am making some structural changes in the excise duty on cigarettes, cigars and cigarillos coupled with some increase in rates. I propose to introduce a compounded levy scheme for chewing tobacco and branded unmanufactured tobacco based on the capacity of pouch packing machines,” said Mukherjee.