MUMBAI (Reuters) - India must make tough spending choices, Finance Minister P. Chidambaram said on Thursday, even as he unveiled a bigger-than-expected outlay for the coming fiscal year in one of the most highly anticipated Indian budgets of recent years. (Read full story https://bsmedia.business-standard.comin.reuters.com/article/2013/02/28/india-union-budget-2013-growth-idINDEE91R03G20130228)
Total budget expenditure will hit 16.65 trillion rupees in the fiscal year that begins on April 1, Chidambaram said, despite expectations for cuts from current year levels, which are on track to hit 14.3 trillion rupees, or 96 percent of the budget target.
For budget highlights click http://in.reuters.com/article/2013/02/28/india-union-budget-2013-chidambaram-idINDEE91R03C20130228
Reuters India special budget page online http://in.reuters.com/subjects/india-budget-2013
COMMENTARY
RUPA REGE NITSURE, CHIEF ECONOMIST, BANK OF BARODA, MUMBAI
"He has made allotments for infrastructure, construction of warehouses; so as long as the spending is on account of capital expenditure, one need not view it negatively."
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MARKET REACTION
The 10-year yield was up 3 basis points at 7.82 percent from levels before the finance minister began his budget speech.
BACKGROUND
- The budget comes against the backdrop of the slowest economic expansion in a decade, strong inflation pressures and high interest rates. Large fiscal and current account deficits have pushed India to the brink of sovereign ratings downgrade.
- RBI officials have warned that curtailing capital investment on projects with strong multiplier effects like building roads and bridges would hurt growth. They also worry that maintaining populist spending on subsidies for food, fuel, fertiliser and cooking gas will push up prices.
(Reporting by India Treasury, Companies, Markets teams; Editing by Ranjit Gangadharan)