This would leave the next federal government with far less money to spend. General elections are due in May this year.
Analysts says this move is to please regional political parties. The move will also leave little power for the next government's federal ministers in key social sector ministries such as rural development, health and human resources development.
However, critics say there is a reason for shifting federal spending power to the states. If
Chidambaram today said the cut in total expenditure during the current financial year will not have much impact on growth.
"With an expenditure size of US
The finance minister also cut excise duty on small cars, motorcycles and scooters from 12% to 8%. A bigger cut came for larger SUVs where duty was slashed from 30% to 24%. Large cars, which attracted excise of 27%, will now have 24% levied on them while the duty on mid-sized cars came down to 20% from 24%.
This decision brings relief to Indian automobile industry whose sales volumes in January fell around 5% compared to the same month in 2013. Major automakers General Motors India,
Companies are expected to announce new prices on Tuesday morning, and the reduction will also be applicable to the stock in transit or that with the dealers, officials said. (QNA)
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