The government on Tuesday announced a Rs 30,000-crore booster shot for the economy by cutting excise duty and service tax by 2% each and extending an earlier 4% reduction in excise beyond March 31, 2009. This is the government's third economic stimulus package in three months.

The tax cut will have no impact on passenger cars and two-wheelers. Only truck makers may cut prices. The real estate sector could benefit, as steel and cement prices are reduced. But several services which currently attract service tax at 12% will pay 10%, reducing your costs by small fleabites.

Among the bills that will shrink are the charges levied by air and rail travel agents, real estate brokers, courier services, coaching classes, laundries, internet cafes and gyms. Telephone and mobile bills could also come down a wee bit. Fees on a whole lot of financial services, including stock brokerage, general insurance and mediclaim premia, credit card fees, Ulips and mutual fund management fees, will be lower.

Tyre-maker Ceat and steel companies have decided to cut prices.

Sindhu Bhattacharya & Khyati Dharamsi/ DNA-Daily News & Analysis Source: 3D Syndication