In relief to consumers, government on Friday abolished the import and excise duties on non-subsidised domestic LPG cylinders that will bring down their price by Rs 97 a unit in Delhi.

It also asked states to subsidise LPG cylinders.

The government had last week restricted supply of subsidised cooking gas to 6 per household in a year. Any requirement beyond this was to be purchased at market price, which currently works out to Rs 895 per 14.2 kg cylinder.

After the abolishing of 5 per cent customs duty and 8 per cent excise duty, the consumer price in Delhi would come to Rs 798. Subsidised cooking gas (LPG) in Delhi is currently sold at Rs 399 a cylinder.

"Since some LPG cylinders will not be subsidised, we have amended the notification for the non-subsidised household LPG cylinders... customs and excise (on them) will be zero", Chidambaram told reporters.

Non-subsidised commercial LPG cylinders, however, would continue to attract customs duty of 5 per cent and excise duty at 8 per cent.

Taking a cue from the Congress ruled states which have increased the number of subsidised cylinders to nine per year, the Minister asked other states to follow suit.

"I welcome the decision of certain state governments to subsidise three cylinders per year of LPG in addition to six cylinders for which the subsidy would be borne by the central government...I would commend all state governments to adopt such an approach", he said.

The Minister also welcomed the decision of the Bihar government to reduce VAT on diesel from 18 per cent to 16 per cent which would neutralise some of the impact of the Rs 5 price hike announced by the Centre last week.

The Rajiv Gandhi Equity Scheme would be open to retail investors who would be investing in equity markets for the first time. The scheme would have a total lock-in period of three years, including an initial blanket one year lock-in when trading will not be possible.

"The maximum investment permissible under the scheme is upto Rs 50,000 and the investor would get a 50 per cent deduction of the amount invested from the taxable income for that year," Chidambaram said.

The Department of Revenue would soon notify the scheme and market regulator Sebi will issue relevant circulars to operationalise it in two weeks.

Besides, Chidambaram also allowed domestic companies to access cheaper funds from abroad and lowered tax on overseas borrowings.

The reduced tax will apply to funds borrowed between July 1, 2012 and June 30, 2015, Chidambaram said.

"It is to encourage overseas borrowings. Interest rates are low abroad and these low cost funds can come to India," Chidambaram said.

He further said that the guidelines would have some generic conditions which if the corporates satisfy will enable them to directly access the overseas market for raising funds.

"Anyone satisfying general conditions need not come to government for case by case approval," Chidambaram said, adding that the borrowings could be done in the form of loan agreement or by way of long term infrastructure bonds that comply with External Commercial Borrowings (ECB) regulations.