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Indian government pushes last budget before fresh elections

February 18, 2014


PALANIAPPAN Chidambaram, India's finance minister, announced the country's last budget ahead of an upcoming election yesterday.

Chidambaram said that the country's budget deficit would come in at 4.6 per cent of GDP in the year to March, below his original target of 4.8 per cent.

The Indian economy has struggled with slower growth and rising inflation, and was hit particularly hard by the taper turmoil in emerging markets during the summer of last year.

May's election may overturn the parliamentary majority of the Indian National Congress, the party which has governed since 1998, in favour of Hindu nationalist leader Narendra Modi.

Chidambaram announced tax cuts on car and mobile phone sales, in an attempt to boost the country's stagnant manufacturers, which have been hit hard by the economy's slower growth.

Berenberg bank expects 5.3 per cent GDP growth for India this year, but inflation will remain high, with 7.5 per cent projected.

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Source: City A.M. (UK)

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