Economics
Modi's Election Budget May Push India's Interest Rates Higher
- Ahead of crucial elections, Modi goes big on rural spending
- But Feb. 1 budget means India misses its fiscal deficit target
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India’s Narendra Modi delivered an election year budget focused on tamping down rural discontent ahead of crucial elections, spending that could prompt the central bank to raise interest rates in the coming months.
With less than a week to go before the Reserve Bank of India meets to decide on policy, Finance Minister Arun Jaitley unveiled a budget that opens the taps for impoverished farmers, guaranteeing higher minimum crop prices and more spending on infrastructure projects in India’s vast rural hinterland.