Higher budget deficit looms as govt cuts spending on growth drivers

Spending on capital assets has so far trailed the so-called revenue expenditure that includes interest payments and overheads such as salaries

India has scaled back expenditure, including on productive assets that aid economic growth, as the government is confronted with the risk of its budget deficit blowing out.

Capital expenditure -- the money spent on creating, maintaining, or improving fixed assets like roads and factories -- stood at 40% of the budgeted amount in the six months to September, down from 55.5% in the year-ago period, data from the government’s Controller General of Accounts show. The overall spending during the period was 49% of the budget aim compared to 53% last year.

That’s despite Prime Minister Narendra Modi’s government outlining measures