Sinha has been nicknamed 'Rollback' after recent u-turns

Analysts said the finance minister, who they have nicknamed 'Rollback', was a desperate to maintain the Hindu nationalist BJP party's middle-class support after several recent election defeats.

"This shows the government is not strong enough to do what it wants and is driven by pressures from within," said D.H. Pai Panandikar, head of economic think-tank RPG Foundation.

Mr Sinha released his 2002/3 budget at the end of February but it must still be approved by both houses of Parliament.

Cautions welcome

The Federation of Indian Chambers of Commerce and Industries (FICCI), the country's business group, gave the U-turns a cautious welcome, saying they would "provide marginal relief to the common citizens of the country."

But despite halving the budget increase on cooking gas prices last month, the latest revisions did not reverse subsidy cuts on fertiliser and kerosene, which are widely used by Indians.

Mr Sinha also said he would exempt fixed-line telephone owners from filing income tax returns, which had been causing people to disconnect their phones.

Sinha said the revenue loss, about 28.5bn rupees ($582m), was "not a very significant sum," adding the government hoped to make it up through strict spending control and "buoyant tax collections".