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India may raise tax on high-end appliances

India may raise excise duty on upmarket household appliances such refrigerators and washing machines to help fund reconstruction after last week's earthquake in the state of Gujarat, a leading newspaper said on Saturday.

The newspaper said that such a measure would go down well with politicians, who rate such products as luxuries, and would spare lower income Indian shoppers who prefer cheaper alternatives.

India increased taxes on individuals and companies to raise money to meet costs associated with the earthquake, which killed some 30,000 people and caused an estimated $2.16 billion worth of damage in Gujarat, the country's second most-industrialised state.

But Prime Minister Atal Bihari Vajpayee said on Friday that this would not raise enough money.

"We will have to devise other ways to mobilise resources to carry out the massive reconstruction," the paper quoted him as saying.

The Complete Coverage | List of earthquake sites

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