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)LIVE NEWS FEED
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