South Asia Monitor: India's Budget: Modest Reform, Modest Populism - August 1, 2004
August 1, 2004
The Congress-led government's first major economic policy act, the budget submitted on July 8, combines ambitious but general new initiatives on agriculture and education with incremental reforms that continue opening the economy. Politically, the budget balances the government's desire to accelerate growth against the demands of its leftist coalition partners. The fiscal deficit will constrain economic policy, and a weak monsoon will hold down GDP growth. The gap between the fast- and slow-growing states will continue to grow as India's most dynamic states mobilize private capital to spur their economic development.