Presenting the union budget 2013-14 to the lower house of the parliament, Chidambaram said cutting expenses was important to rein in fiscal deficit but it was equally important to augment resource generation.
"Where should a finance minister look to generate resources, than cigarettes?" he asked while proposing to increase the excise duty on cigarettes to 18 percent.
He also raised the duty on SUVs from 27 to 30 percent, saying "SUVs take a lot of space on the road, so the owners won't mind paying a bit more".
However, SUVs registered as taxis are exempted from the duty.
On mobile phones with a price tag of more than Rs.2,000, the finance minister levied a duty of six percent.