New Delhi, Jan. 23: The government may go in for more customs duty cut in the Union budget to check price rise.

North Block officials said the rise in indirect tax revenues gave the government enough leeway for more duty cuts in select items. “This first batch should have a salutory effect ... if it does not, we will think again,” officials said.

Prices of primary articles, edible oil and cement had been growing at 7.7 per cent, 10.1 per cent and 20.7 per cent respectively. Having slashed import duties on cement to nil, analysts expect duty cuts on edible oil imports in the budget.

The tax cuts announced yesterday on 11 items, including cement and stainless steel, chemicals and project imports, would notionally, in a given year, lead to a Rs 3,000-crore give-away. However, since the duty cut would impact collections in only the remaining two months, the actual loss would be less.

Finance minister P. Chidambaram said, “We were planning to do this anyway on February 28 ... We decided to advance it because it has the potential to check inflation, especially in the manufacturing sector.”

“Actually, duty collections on this count (cut announced last night) may not be hit at all as we expect increased imports next year, which would result in higher customs duty earnings,” officials said.

Revenue from customs duty went up to Rs 63,952 crore for the April-December period, a 34 per cent increase over the same period last year. “The tax buoyancy on the customs front has been heartening,” officials said.

Revenue from customs and central excise has increased 17 per cent to Rs 1,44,201 crore between April and December 2006 compared with Rs 1,23,212 crore for the corresponding period last fiscal.

The government has been battling the rising inflation and is also expected to control money supply in the economy.

In another 10 days, the central bank is expected to take a call on monetary policy and is widely expected to raise the bank’s overnight lending rates to check money supply, which has crossed 20 per cent.