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New Delhi, Feb 24 (IANS) The Lok Sabha Tuesday approved 2-percent cuts in excise duty and service tax proposed by External Affairs Minister Pranab Mukherjee, who said resilience of the India economy which grew by an average of 9 percent annually in the last three years will help it overcome the current crisis.

Replying to the debate on the interim budget in the Lok Sabha, the lower house of parliament, Mukherjee said the government had taken steps in the past two months to lift the economy and that such steps will bear fruit soon.

He proposed that the 4 percent cut in central value-added tax (Cenvat), announced in December to 12 percent, be extended beyond March 31, while proposing that the excise duty be further reduced from 10 percent to 8 percent.

The foreign minister also proposed that naphtha imported to generate electricity be fully exempted from customs duty, and service tax on taxable services be cut from 12 percent to 10 percent.

In the case of cement, he proposed the excise duty at 8 percent ad valorem or a specific duty of Rs.230 per tonne, whichever was higher, resulting in a gain of Rs.3.50 per bag.

The house later passed by voice vote the interim budget, including the vote-on-account, to help fund the government expenditure till the regular budget is presented by the next government after elections, and passed by parliament.

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