Economics
India Congress Party's Income Plan Short on Funding Details
- It may force rationalization of subsidies, say economists
- Subsidy handouts already pressuring government’s deficit goal
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A $52 billion basic income plan promised by India’s main opposition Congress party if it’s voted to power sounds like tonic to the economy, but is short on details on what it means for the nation’s fiscal consolidation path.
The plan, which promises income support of as much as 72,000 rupees ($1,046) a year to 50 million families and announced Monday, left economists looking for answers on how this would be rolled out without breaching the budget deficit goal of 3.4 percent of gross domestic product for the fiscal year starting April. Existing subsidy handouts are already putting pressure on the deficit targets.