Sunday, 3 February 2013


Factbox: Weapons, nuclear power, roads and welfare: India's budget cuts



(Reuters) - India's finance minister P. Chidambaram is putting welfare, defence, atomic energy and road projects under the knife in a final attempt to hit a tough fiscal deficit target by March, risking short-term economic growth and angering cabinet colleagues.
The cuts will reduce spending by about 1.1 trillion Indian rupees ($20.6 billion) in the current financial year, some 8 percent of budgeted outlay, or roughly 1 percent of estimated gross domestic product, two senior finance ministry officials and a senior government adviser told Reuters.
Here are some of the details of the cuts so far and where the axe is falling:
* The defence ministry -- the world's biggest arms importer in recent years -- faces a cut of $1.9 billion for weapons purchases, which a senior official said could delay deals to buy howitzer guns and Javelin anti-tank missiles from the United States by at least few months.
* The rural development ministry, which runs a flagship rural employment scheme that is seen as a major vote winner, could have up to $4 billion slashed from its budget, a senior official at the ministry said.
* Government data for the April-November period, for which spending numbers are available, show a fall in disbursements to ministries -- and purse strings are tightening further in the traditionally high-spending last quarter of the fiscal year. A senior finance ministry official said ministries will not get more than a third of their allocated funds in the quarter to March.

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