125. In my proposals on customs duties, I have proposed a reduction in customs duty on crude oil from 35% to 25%. This is part of a restructuring and rationalisation of the duty structure aimed at encouraging efficient refineries and enabling me to shift the duties from the input stage to the product stage. I propose to make up the loss on customs duty by adjusting the excise duty upward from 10% to 15% on all petroleum products except LPG and kerosene. The proposed changes in customs and excise duties taken together are revenue neutral and will have no impact on the administered prices of petroleum products.

126. Honourable Members are aware that almost all articles of mass consumption are already exempt from excise duty and a large number of other widely consumed articles carry a rate of only 10%. I propose to exempt some more articles from excise duty. They are:

(a) Vanaspati and margarine;

(b) Writing and printing paper supplied to all State Text Book Corporations;

(c) Animal fats and oils;

(d) Asbestos fibre;

(e) Metallic ores; and

(f) Tapioca products.

127. I propose to reduce the duty on the following articles:

(a) Tooth paste, from 20% to 10%;

(b) Detergents, from 30% to 25%;

(c) Cartons, boxes and bags made of paper and paperboard, from 20% to 10%;

(d) Glassware produced by semi-automatic process, from 20% to 10%;

(e) Glassware used for table, kitchen etc., from 15% to 10%;

(f) Articles of asbestos cement, from 25% to 20%; and

(g) Ceramic articles, other than glazed tiles, from 20% to 15%.

128. I also propose to raise the exemption limit for footwear from Rs.50 to Rs. 75 per pair.

129. The rates of excise duty on motor vehicles are not in consonance with the accepted classification of such vehicles. I therefore propose the following rationalisation:

(a) Duty on motor cars and other motor vehicles principally designed to carry not more than six persons, excluding the driver, will remain unchanged at 40%.

(b) Duty on motor vehicles principally designed to carry more than 6 persons but not more than 12 persons, excluding the driver - 20%

(c) Duty on other motor vehicles for transport of persons or goods - 15%.

There is no change in the duty on two-wheelers or tractors.

130. If there is one area in which a Finance Minister can both tax and please, it is cigarettes. Today, however, I shall please you only in a small way by proposing modest increases in the specific duties on cigarettes ranging from about 5% to 7[%. In the case of non-filter cigarettes, not exceeding 60 mm in length, popularly called mini cigarettes, I propose to raise the tax by 25% from Rs.60 per thousand to Rs.75 per thousand.

131. In order to encourage R & D efforts in India I propose to exempt goods developed and patented in India and concurrently in specified countries from the levy of excise duty for a period of three years. I am also rationalising the exemption from customs duty for import of equipment and consumables for R&D institutions.

132. I have proposed the addition of potassium chlorate, copper powder and cigarette lighters to the list of goods eligible for duty exemption under the SSI scheme. The reduction in import duties proposed elsewhere will also substantially benefit the small scale industries. In order to benefit hundreds of small scale manufacturers of matches I have decided to dispense with the physical control system operating on them and introduce the self- removal procedure freeing them from the day to day bother of control. I hope SSI match units will respond with substantial increase in payment of excise duties.

133. I have proposed rationalisation of rates and exemptions both in customs and excise in several other areas. I would not like to take the time of the House by going into these details.