Economics
Looking to Elections, Modi Lets India’s Subsidy Bill Surge
- Failure to rein in handouts puts pressure on budget deficit
- Subsidies for food, fertilizer, oil increase by 15 percent
Indian Prime Minister Narendra Modi
Photographer: Prakash Singh/AFP via Getty Images
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Prime Minister Narendra Modi has allowed India’s subsidy bill to balloon in the lead up to crucial elections, at the risk of breaching his budget deficit goals.
Although Modi has a reputation for reducing India’s huge subsidy expenditure, data shows he’s missed the chance to rein it in. And as he prepares for state and national elections, subsidy reforms -- a sensitive issue among much of India’s vast electorate -- will be even more difficult in Asia’s No. 3 economy.