India must tackle higher subsidy spending soon, says FM

India must tackle a jump in spending on fuel and food subsidies sooner rather than later, Finance Minister P Chidambaram said, part of a series of steps aimed at stabilising the economy to be announced ahead of an election due within seven months. Rating agencies have threatened to downgrade its sovereign debt to 'junk' status.

"We've done a lot of things but we have to do many more things, and I think we will do these in the next few weeks and months, both by the government and by the central bank," Chidambaram said on Monday.

Chidambaram, who is trying to win back investor confidence in large part by reducing a wide fiscal deficit, said India's slowdown would impact revenues and indicated he could rein in spending by some large government departments. He said other steps to be taken could include the unwinding of measures the Reserve Bank of India introduced in July to control a rapid depreciation of the rupee.