Mumbai, Feb 28 - Shares in Indian consumer goods makers and hotels rose on Wednesday in a weak Mumbai market after the federal budget proposed reductions in taxes for the fiscal year beginning on April 1.
Finance Minister Palaniappan Chidambaram proposed a complete exemption of excise duty on all instant food mixes and biscuits whose retail price does not exceed 50 rupees ($1.1) a kilo.
Shares in ITC Ltd., the top cigarette maker that also makes biscuits and ready-to-eat foods, were up 5.6 percent at 174.50 rupees while the main BSE index was down 2.6 percent.
Top biscuit maker Britannia Industries Ltd. was up 1.4 percent at 1,275 rupees, while Marico Ltd. rose nearly 1.0 percent to 60.25 rupees on a proposal to exempt all cooking oils from customs duty.
The budget also proposed a cut in duty on food processing machinery to 5 percent from 7.5 percent and exempted certain water purification devices from excise duty.
"While most of these measures were expected, these are positive for consumer goods firms, especially biscuit makers," said analyst Shishir Manuj at Man Financial.
The budget has proposed a five-year tax holiday for two-, three- and four-star hotels and convention centres in and around New Delhi from April 1, 2007 to March 31, 2010 to boost room capacity in time for the Commonwealth Games in Delhi in 2010.
Indian Hotels Co. Ltd., which owns the Taj chain, climbed 1.4 percent to 146.95 rupees, while EIH Ltd., which owns the Oberoi chain, was up 1.6 percent at 95.45 rupees and Hotel Leela Venture Ltd. gained 2.3 percent to 59.30 rupees.