السبت , مايو 15 2021

India set to present federal budget

India parliamentThe budget is expected to include measures aimed at creating jobs and cooling inflation

Measures aimed at reviving India’s slowing economy are set to be announced by the country’s new government, led by Prime Minister Narendra Modi, in its federal budget on Thursday.

India’s economy has slowed markedly, growing by 4.7% in the 2013-14 financial year which marked the second year of sub-5% growth.

Mr Modi’s government has promised reforms aimed at creating jobs.

The budget is also expected to contain measures designed to slow inflation.

The government has also spoken about its plans to introduce a general sales tax, simplify taxation, encourage foreign investment and speed up approvals for major business projects.

Deficit target

A government survey, published on Wednesday, said the country’s fiscal situation was worse than it appeared.

The annual government Economic Survey on India’s economy heightened speculation that Thursday’s budget will give a higher, more realistic fiscal deficit target for the current financial year than the 4.1% of gross domestic product the previous government set.

“Inflation needs to be moderated further. The fiscal deficit needs downward correction over the next two years,” said Finance Minister Arun Jaitley, who will present Thursday’s budget.

The report forecast GDP growth of between 5.4% and 5.9% in 2014-15, but warned that weak monsoon rains, which are essential for farming, could keep growth closer to 5.4%.

Last year, credit ratings agency SP warned there was a one-third chance of a downgrade of India’s credit rating to “junk” without a big improvement in the fiscal deficit and in implementing reforms.

Mr Modi won a landslide general election victory in May with a pledge to boost growth and create jobs for the one million people who enter India’s workforce every month.

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