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India to Borrow Big for Nearly Half-Trillion Dollar Budget

  • Bonds fall as deficit target, borrowing outpaces forecasts
  • Economy seen growing 11% next year after record contraction
Nirmala Sitharaman and other members of the finance ministry present the annual budget in New Delhi, on Feb. 1.
Nirmala Sitharaman and other members of the finance ministry present the annual budget in New Delhi, on Feb. 1.Photographer: T. Narayan/Bloomberg
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India unveiled a spending plan worth almost a half-trillion dollars as Prime Minister Narendra Modi’s government seeks to dig Asia’s third-largest economy out of a pandemic-induced slump.

Fueled by a bigger-than-expected spending deficits and borrowing, as well as sales of government assets and dividends from state firms, the 35 trillion rupee ($480 billion) budget sent bonds tumbling and stocks rallying. It also aims to bolster the nation’s financial stability, including setting up a company to manage a growing pile of bad loans.