[QODLink]
Central & South Asia

India's new government unveils reform budget

Finance minister unveils budget he says can revive growth amid economic slowdown and curb borrowing.

Last updated: 10 Jul 2014 07:21
Email Article
Print Article
Share article
Send Feedback

India's new government has unveiled a budget it says can revive growth, even while curbing borrowing, after the longest slowdown in a quarter of a century.

Finance Minister Arun Jaitley pledged on Thursday to adhere to the "daunting" budget deficit target - 4.1 percent of gross domestic product for this fiscal year - that the government inherited from its predecessor.

"Fiscal prudence is of paramount importance. We cannot leave behind a legacy of debt for our future generations," Jaitley said.

He said that the budget deficit would be reduced to 3.6 percent in the following two fiscal years.

Prime Minister Narendra Modi's government, in office for less than two months, said that it would raise caps on foreign investment in the defence and insurance sectors, and launch a tax reform to unify India's 29 federal states into a common market.

Limits on foreign investment in defence and insurance ventures have been raised to 49 percent and 26 percent respectively.

Delivering his maiden budget, the finance minister told parliament that India's 1.2 billion people were "exasperated" after two years of economic growth below five percent.

The finance minister outlined the broad strokes of the plan, which he said would be a departure from the "mere populism and wasteful expenditure" that has dragged down Asia's third-largest economy.

He said that the government would overhaul subsidies to be "more targeted" but gave no details.

Modi, 63, won a landslide general election victory in May with a pledge to create jobs for the 1 million people who enter India's workforce every month.

He has since warned that "bitter medicine" is needed to nurse the economy back to health from high inflation and the worst slowdown since free-market reforms in the early 1990s unleashed an era of rapid growth.

294

Source:
Reuters And AP
Email Article
Print Article
Share article
Send Feedback
Featured on Al Jazeera
Italy struggles to deal with growing flood of migrants willing to risk their lives to reach the nearest European shores.
Israel's Operation Protective Edge is the third major offensive on the Gaza Strip in six years.
Muslims and Arabs in the US say they face discrimination in many areas of life, 13 years after the 9/11 attacks.
At one UN site alone, approximately four children below the age of five are dying each day.
Featured
The world's newest professional sport comes from an unlikely source: video games.
The group's takeover of farms in Qaraqosh, 30km from Mosul, has caused fear among residents, and a jump in food prices.
Protests and online activism in recent months have brought a resurgence of ethnic Oromo nationalism in Ethiopia.
Chemotherapy is big business, but some US doctors say it could be overused and are pushing for cheaper and better care.
Amid vote audit and horse-trading, politicians of all hues agree a compromise is needed to avoid political instability.
join our mailing list