Subsidy cuts in budget may disappoint investors | Reuters

India may slash its food and fuel subsidy bill by about $8 billion in next week’s budget, two sources said, but despite the impressive headline, the cut is not as radical as free market champions had hoped for in Prime Minister Narendra Modi‘s first full budget.

A view of the Indian parliament building is reflected on a car in New Delhi April 24, 2012. REUTERS/B Mathur/Files

Most of the 20 percent cut in the budget for subsidies results from lower global oil prices rather than structural changes, with the government’s appetite for reform tempered by a heavy local election defeat in New Delhi this month.

“The total subsidy bill could come down to around 2 trillion rupees ($32 billion),” a senior government official, who has direct knowledge of the matter, told Reuters. That calculation was echoed by another source privy to budget discussions.

via Exclusive – Subsidy cuts in budget may disappoint investors | Reuters.

Advertisements

One Comment to “Subsidy cuts in budget may disappoint investors | Reuters”

  1. As stated above that 20% cut expenditure in the next budget to reduce subsidies— it appears that India (and other countries who import oil) have been much benefited due to falling oil prices …..and has made the decision making much easier!

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Law of Unintended Consequences

continuously updated blog about China & India

ChiaHou's Book Reviews

continuously updated blog about China & India

What's wrong with the world; and its economy

continuously updated blog about China & India

%d bloggers like this: