India cuts taxes as growth slows

New Delhi: India's Finance Minister Palaniappan Chidambaram plans to cut taxes and waive farm loans to shore up voter support and encourage consumer spending after the economy expanded at the slowest pace since 2005.

Chidambaram, presenting the annual budget before Parliament, made more personal income tax-exempt and reduced excise duties.

Asia's third-largest economy grew 8.4 per cent in the three months to Dec-ember 31, after gaining 8.9 per cent in the previous quarter, the statistics department said yesterday.

The minister is relying on tax relief and handouts to bolster electoral support after rising consumer prices eroded his Congress party's popularity in state polls last year.

Chidambaram's measures may also boost an economy weakened by three years of inflation-fighting interest-rate increases and now facing the sharpest global slowdown since 2001.

Stocks fell after Chidam-baram raised short-term capital gains tax to 15 per cent from 10 per cent.