Defence, welfare & road spending to be slashed

Feb 01 2013, 09:02 IST
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Chidambaram's cuts mainly affect capital investment and he has avoided attacking government wage bills and subsidy spending.  (Reuters) Chidambaram's cuts mainly affect capital investment and he has avoided attacking government wage bills and subsidy spending. (Reuters)
SummaryThis will reduce spending by about R1.1 lakh cr in current financial year, 8% of budgeted outlay.

such as subsidies,” he said. “It also fails to a address the supply bottlenecks leading to inflationary pressures.”

The finance minister was backed by Prime Minister Manmohan Singh and Planning Commission deputy chairman Montek Singh Ahluwalia in a series of meetings with government officials, two officials privy to the agenda of the meetings said. Congress leaders have publicly given backing to fiscal consolidation in recent days.

Chidambaram has promised to provide enough funds for the government's flagship programmes — food security, rural jobs, village roads, health and education — in the Budget once he succeeds in improving the government deficit this year.

The government earmarked $97 billion for spending on such projects out of the $278-billion Budget for the current fiscal year.

The finance ministry has also imposed a ban on hiring in ministries, meetings at luxury hotels, the purchase of new vehicles and places some restrictions on foreign tours.

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