If it benefits the economy, short term loss should not be a concern: Jaitley

Mumbai: "We expect it will benefit the economy. So if it benefits the economy, short-term loss of revenue" should not be a concern, Jaitley said. He said the decision on extending the concession, which is valid until June 30, could not have waited till the Budget, scheduled to be presented on July 10. A notification in this regard will be issued on June 25, Jaitley said.

Most carmakers had passed on the benefit of excise duty reduction to customers by cutting prices. The auto industry body had been lobbying for extension of the reduced rates. "It will be good for the auto industry. The momentum that has been built in last few weeks will continue," Maruti Suzuki India Chief Operating Officer (Marketing and Sales) Mayank Pareek said.

Car sales grew 3.08 per cent in May, snapping two successive months of declines, raising hopes the industry may be coming out of a prolonged market slump. Automobile sales in India fell for the second consecutive year in 2013-14 and were 4.65 per cent lower at 17,86,899 units. In 2012-13, car sales fell 6.69 per cent, the first drop in a decade.

The Consumer Electronics and Appliances Manufacturers Association, too, had demanded extension of the duty cut. In the Interim Budget, then Finance Minister P Chidambaram reduced the duty with the aim of boosting the manufacturing sector, saying the "economic situation demands some interventions that cannot wait for the regular Budget". He had said the rates could be reviewed at the time of the regular Budget.