Austere budget would defy India's pre-election history

Fri Feb 22, 2013 11:43am IST

Palaniappan Chidambaram speaks during a news conference after a South Asian Association for Regional Cooperation (SAARC) interior ministers meeting in Islamabad June 26, 2010. REUTERS/Faisal Mahmood/Files

Palaniappan Chidambaram speaks during a news conference after a South Asian Association for Regional Cooperation (SAARC) interior ministers meeting in Islamabad June 26, 2010.

Credit: Reuters/Faisal Mahmood/Files

Related Topics

Reuters Market Eye - Finance Minister P. Chidambaram could defy history if he presents a largely austere 2013/14 budget on February 28, ahead of general elections next year.

A Standard Chartered analysis shows that since the 1990s, spending invariably rises in the two years leading up to a general election.

For example, the government during 1991-96 cut average real expenditure by an annualised 4 percent in the first two years of its term, but raised it by 3.6 percent in the final three years, Stanchart says.

The trajectory was similar for the governments in power from 1999-2004 (2.8 percent versus 9.0 percent) and 2004-09 (-1.9 percent versus 14 percent), the lender says.

The biggest welfare move expected in the current budget is the food security bill, which will likely raise annual food subsidies to 1.12 trillion from 750 billion rupees now, almost a 50 pct hike, Stanchart predicts, quoting government estimates.

GRAPHIC: link.reuters.com/qes26t

(Reporting by Subhadip Sircar)

FILED UNDER:

Surprise Rate Cut

Reuters Showcase

Insurance Bill

Insurance Bill

Opposition support bolsters prospects for insurance reforms  Full Article 

SBI Share Sale

SBI Share Sale

SBI's up to $2.4 billion share sale likely by end April - sources   Full Article 

Eicher Share Sale

Eicher Share Sale

Truck maker Volvo sells shares in Eicher Motors  Full Article 

Beef Ban

Beef Ban

After beef ban, Hindu groups force abattoirs to close   Full Article 

Monsoon Season

Monsoon Season

Exclusive - India expects better monsoon rains this year  Full Article 

Services Growth

Services Growth

Services growth at eight-month high in Feb - HSBC PMI  Full Article 

'India's Daughter'

'India's Daughter'

Documentary on 2012 Delhi gang rape banned in India  Full Article 

Capex Slashed

Capex Slashed

Cairn India slashes 2015-16 capex on falling crude   Full Article 

Strong Start

Strong Start

Airwaves auction off to strong start, bids near $10 billion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage