Clearly inflation has been one of the biggest factors influencing P Chidambaram in the setting of the Budget this year. Excise duty has therefore been cut or reduced on a host of items that he feels are consumed by the common man.

Excise duty on edible oil has been cut by 15 per cent points. Last month, the government cut import duties on crude palm oil and palmolein to 60 per cent, and those on refined, bleached, and deodorised palm oil and palmolein were brought down to 67.5 per cent.

Anil Agrawal, director of Sanwaria Agro Oils said, "A very good thing is that the government did not levy excise duty on edible oils, as was expected in some quarters. Import duty on food processing machinery has also been reduced."

However domestic edible oil makers are not happy with the removal of the 4 pc counter veiling duty on edible oils which protects domestic oil makers from international competition.

The FM has also removed excise duty on instant food mixes and on packaged biscuits priced lower than Rs50 per kg.

These proposals will benefit companies like HLL, ITC, MTR Foods, Britannia Industries and Parle Agro.

Other proposals that would bring down the prices of commonly used items is the cut in customs duty on man-made yarn and poly-fibre to 7.5 per cent and the duty cut on watches and umbrellas to 5 per cent from 8 per cent earlier. Coking coal has been exempted from customs duty, while excise duty has been cut on pan masala without tobacco and used as a mouth freshener from 66 per cent to 45 per cent.

Excise duty on petroleum has also been cut to 6 per cent from eight per cent earlier.

In an final attack on inflation P Chidambaram delivered a whammy to cement companies by doubling excise duty on cement sold for more than Rs190 per bag to Rs600 per tonne from Rs400 earlier.

This has however had an opposite reaction as cement companies have immediately passed on the cost rise to consumers.