India's Finance Minister Palaniappan Chidambaram has cut indirect taxes on cars and mobile phones in an attempt to boost economic growth.
Mr Chidambaram unveiled the move as he presented the interim budget ahead of this year's general elections.
In his speech he expressed concerns over the health of the manufacturing sector and rising food prices.
However, Mr Chidambaram added that the economy had stabilised and was showing sings of a turn around.
"Our objectives were fiscal consolidation, reviving growth cycle, and enhancing manufacturing," he said.
"I can confidently assert that the fiscal deficit is declining, the current account deficit is constrained, inflation is moderated and exchange rate is stable."
The interim budget comes as the government's popularity has slumped amid a slowdown in growth and a number of corruption scandals in recent years.
The elections are scheduled to be held by May and the new government will present a full budget for the next financial year after it takes charge.
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