India budget to spell out Modi's strategy for restoring growth
Published on Jul 10, 2014 9:41 AM
NEW DELHI (AFP) - India's new right-wing government on Thursday unveils its maiden budget that investors hope will spell out Prime Minister Narendra Modi's strategy for restoring the country's economic and fiscal health.
"Hopes are high Modi will usher in much-needed reforms to invigorate the economy and eventually do what it takes for India to live up to its economic potential - like China has," said Deepak Lalwani, head of India-focused consultancy Lalcap.
Shares have rocketed on expectations that the Bharatiya Janata Party (BJP), which took office in May, will use the budget to flesh out campaign promises to lift Asia's number-three economy from its longest stretch of sub-five per cent growth in a quarter-century.
Analysts say Finance Minister Arun Jaitley may slightly reduce a yawning fiscal deficit - the gap between revenue and spending - which stood at 4.5 per cent of gross domestic product last year. But they say he is unlikely to reduce growth-promoting capital spending in the budget for the eight months left in this financial year to March 31, 2015 to significantly reduce the deficit.
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