Populist spending drives rupee down

Prime Minister Manmohan Singh's coalition government populist spending spree ahead of the general elections raises concerns about the commitment of the UPA-II government to reform.

The Food Security Act is an integral component of the Congress party's plans to get power again, by selling subsidised rice and wheat; to 70% per cent of India's population of 1.2 billion.

Estimates place India's subsidy burden from such splurging at Rs 1.35 trillion, a wild excess by a resource strapped government that has spooked financial markets and driven the Indian rupee down by 20% in the past 12 months.

In a parallel development, the Prime Minister has asked the Oil Ministry to immediately trim India's oil import bill by US$25 billion dollars to defend the weak rupee.

J Barua | India News Political Bureau, Kolkatta Monday August 27, 2013, 15:13 pm (IST)

  1. Populist spending drives rupee down - An article about how government spending policies have impacted the value of the Indian rupee.
  2. Narendra Dabholkar gunned down in Pune - A news report about the murder in cold blood of Narendra Dabholkar who took on babas like Asaram Bapu.
  3. IAC gets DDA to scrap Nilekani's UIDAI HQ sweetheart deal - This news report discusses the Indian anti-corruption movement's success in getting the Delhi Development Authority to cancel a controversial real estate deal involving the former head of the Unique Identification Authority of India.