Monday, February 28, 2005

India ups spending on health, education, and arms

by Brian Turner

Indian Finance Minister, Palaniappan Chidambaram, has launched a budget that aims to attack poverty across all regions of the vast country.

Despite legislation that requires India to reduce its national debt, this budget sees fiscal spending increased in core areas of health and education, as well as defence, which alone is up 7.8%.

However, he reiterated his commitment to bringing debt to 4.3% of GDP from an estimated 10% over the next budget period.

Overall, India’s economy grew 6.9% which gave Palaniappan Chidambaram room to increase social spending.

A summary of the budget spending is as follows:

* Increased spending on primary education to 71.56bn rupees ($1.6bn)
* Increased spending on health to 102.8bn rupees ($2.35bn)
* Announced that 80bn rupees ($1.8bn) will be spent on building rural infrastructure
* Pledged 102.16bn rupees ($2.3bn) for tsunami victims
* Increased flow of funds to agriculture by 30%
* Announced a package for the sugar industry

Additionally, tax reforms to help with economic growth were also brought in. Additionally, an economic survey released last week recommended that limitations on foreign investment should be lifted.

 

 

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