Zebra
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By AMOL SHARMA and PAUL BECKETT
Updated October 8, 2012, 9:16 p.m. ET
NEW DELHI—Finance Minister Palaniappan Chidambaram said India will rein in government spending, partly by switching to a system that delivers subsidies by direct cash transfers instead of discounts.
Mr. Chidambaram, in an interview with The Wall Street Journal, also said that he "will be happy" if India can post a budget deficit for the year ending next March 31 as close to the budgeted target of 5.1% of gross domestic product as possible. "With some luck, we could aim at 5.3% or so," he said.
Economists warn that if India doesn't take action, its deficit could go above 6%, crowding out private investment, stoking inflation and potentially precipitating downgrades of the country's sovereign debt by ratings firms.
Since Mr. Chidambaram took office in August, India has undertaken measures to jolt its slowing economy. The government has cut costly diesel-fuel subsidies and allowed greater foreign participation in retail, aviation and broadcast services to encourage an influx of capital from abroad. The cabinet is pushing legislation to open the insurance and pensions-management sectors to greater overseas investment......
full story: India Aims for 5.3% Deficit, Eyes Cash Transfers - WSJ.com
Updated October 8, 2012, 9:16 p.m. ET
NEW DELHI—Finance Minister Palaniappan Chidambaram said India will rein in government spending, partly by switching to a system that delivers subsidies by direct cash transfers instead of discounts.
Mr. Chidambaram, in an interview with The Wall Street Journal, also said that he "will be happy" if India can post a budget deficit for the year ending next March 31 as close to the budgeted target of 5.1% of gross domestic product as possible. "With some luck, we could aim at 5.3% or so," he said.
Economists warn that if India doesn't take action, its deficit could go above 6%, crowding out private investment, stoking inflation and potentially precipitating downgrades of the country's sovereign debt by ratings firms.
Since Mr. Chidambaram took office in August, India has undertaken measures to jolt its slowing economy. The government has cut costly diesel-fuel subsidies and allowed greater foreign participation in retail, aviation and broadcast services to encourage an influx of capital from abroad. The cabinet is pushing legislation to open the insurance and pensions-management sectors to greater overseas investment......
full story: India Aims for 5.3% Deficit, Eyes Cash Transfers - WSJ.com
