India unveils budget focused on rural voters
India said on Thursday (February 01) it expected economic growth to surge above 8 percent as it announced a 2018/19 budget that allocated billions of dollars for rural infrastructure and unveiled a health insurance program for around 500 million poor.
In his last full year budget before a national election that must be held by May 2019, Indian Finance Minister Arun Jaitley spoke of massive spending on rural infrastructure, to win over voters in the countryside where two-thirds of India’s 1.3 billion people live.
Farm incomes have fallen and Prime Minister Narendra Modi’s administration has failed to deliver enough jobs to employ the mass of Indian youth joining the labor market and moving to its overcrowded cities each year. But Jaitley said economic growth was picking up and that Asia’s third largest economy was “firmly on path to achieve 8 percent plus growth soon.”
Gross domestic product (GDP) is expected to grow 6.5 percent to 6.75 percent in 2017/18 – its slowest pace in three years. While growth has been slowed by the botched rollout of a nationwide goods and service tax (GST) in 2017, and a shock move to ban high value currency notes in late 2016, investors have so far looked beyond the setbacks, perceiving the initiatives as positive long term.