New Delhi - The Indian government Tuesday announced a 2-percentage-point reduction in excise and tax duties to stimulate the slowing economy.

The general excise duty was reduced to 8 per cent while tax on services has been brought down to 10 per cent, India's acting Finance Minister Pranab Mukherjee said.

The latest tax cuts would mean a revenue loss of 300 billion rupees (about 6 billion dollars) for the government, Economic Affairs Secretary Ashok Chawla was quoted as saying by PTI news agency.

The government earlier announced two stimulus packages and a 4-percentage-point cut in excise duty to boost the economy.

The Indian economy has posted over 9-per-cent growth for three consecutive years, but the government recently downgraded its gross domestic product forecast for the current fiscal year to 7.1 per cent.

Replying to a debate on the interim budget in the Lok Sabha, or lower house, of Parliament, Mukherjee said the steps taken by the government since December combined with Tuesday's cuts would soon bear fruit.

India is scheduled to hold general elections and have a new government in place by mid-May when the term of the current United Progressive Alliance government ends.

The interim budget, which was approved by Parliament Tuesday, funds government expenditure beyond the financial year ending on March 31 and until the new government presents a regular annual budget.

"I have expressed deep concern on the impact of the global meltdown," Mukherjee said during the debate on the interim budget. "Any responsible finance minister has to express this concern. But I said I have confidence in the resilience of the Indian economy." (dpa)