Budget 2005 does not radically alter the household budget for the great Indian consuming class. Household incomes could be marginally lower, except for those earning taxable incomes below Rs 100,000, but the chances are that expenses may not shoot up too much either.

Unlike the earlier government, which made a compelling case for spending as against saving by systematically lowering interest rates, the UPA government's budget does not quite make the choice an easy one.

There is no additional incentive to save, but if you do end up saving anyway, you might find it more worthwhile to invest for the long term. Women have reason to cheer - platinum jewellery should cost less with the reduction in import duties to the level of gold.

Concessions on housing loans have been left untouched. Thus, housing loans remain one of the best ways to minimise tax outgo for the salaried people.

The across-the-board two per cent education cess, rising fuel prices and the expected introduction of state value added tax from April 2005 could mean marginal price hikes across all goods.

Services would cost more as the service tax has been hiked from 8 per cent to 10 per cent and many more services have been added to the list of taxable items.

Notably, insurance would cost more. Marriages and parties would cost more as pandals and outdoor caterers would also be required to pay a service tax. However, other items like entertainment, cars, hotels, liquor and tobacco will cost the same.

Savers have no additional incentives. The interest rate on post-office savings remain unchanged. There is relief for senior citizens as the government plans to introduce a new scheme called the Senior Citizens Savings Scheme offering an interest rate of 9 per cent per annum.

It is not clear whether this income will be taxable and whether this rate will stay life long or for a fixed tenure. The Varishta Pension Bima Yojana, which is now set to be abolished, offered 9 per cent life long and was taxable. Investors were eligible for a maximum income of Rs 2,000 per month.

Students can look forward to funding their own education  - at least for higher education - as loans for professional education up to Rs 750,000 would not require any collateral.

For long term investors in equities, there is good reason to cheer. They can avoid the grueling paperwork related to capital gains, and pay only a turnover tax at the rate of Rs 150 for every Rs 100,000 worth of transaction.

The tax will be charged by the broker. Short-term investors, however, will have to pay an additional 10 per cent capital gains tax at the rate of 10 per cent.

There are other soft benefits. Chennai residents may finally find some respite for their long standing water problems. Citizens of backward states like Bihar and those in the North-East may see small changes on account of special packages announced for them.

Also, family pension received by widows, children and nominated heirs of members of the armed forces and the paramilitary forces killed in the course of operational duties will be exempt from income tax.

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