India’s budget shortage may be double next year’s planned target. The Indian government steps up spending to protect the economy from the global recession ahead of elections in two moths.
According to Foreign Minister Pranab Mukherjee, spending will increase six percent 9.53 trillion rupees in the year starting April 1. He also said that this will leas to a budget gap of more than five percent of gross domestic product by March 2010, contrasting the 3 percent target.
According to the government of Prime Minister Manmohan Singh, spending to revive the economy is currently more important than worrying about the budget deficit.
India received an average of 10 billion US dollars a year of foreign investments between 2001 and 2003.
Growth in the current financial year may decrease to seven percent, rendering millions unemployed. According to the Federation of Indian Export Organizations, exporters may cut 10 million jobs by March. This means that India’s economy would have to grow at 10 percent a year in order to increase employment by one percent.
(Source: Cherian Thomas; Bloomberg)
