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Indian budget targets education India cancels small farmers' debt
(40 minutes later)
The Indian government is to increase education spending by 20% and health spending by 15%, as it unveils its budget for the coming financial year. The Indian government is to cancel the entire debt of the country's small farmers in a giant scheme that will cost 600bn rupees ($15bn; £7.6bn).
Widely seen as a populist budget ahead of a general election due by May 2009, the government also pledged to keep control of food prices. The move is a centrepiece of India's latest budget, with the government also increasing education spending by 20% and health funding by 15%.
As India's economy booms, Finance Minister Palaniappan Chidambaram also pledged to control wider inflation. Widely seen as a populist budget ahead of elections due by May 2009, Delhi has also pledged to control food prices.
He added that India's annual economic growth was now running at 8.7%. The government also said it would keep up work to control wider inflation.
This figure, which covers the current financial year to 31 March 2008, is a slight slowdown from 9.6% in 2006-2007 - India's fastest economic expansion in 18 years.
Over the past year India has increased interest rates and reduced the supply of the rupee to cool this breakneck growth.
'Price pressure''Price pressure'
Unveiling the latest budget, Finance Minister Palaniappan Chidambaram said India's annual economic growth was now running at 8.7%.
This figure, which covers the current financial year to 31 March 2008, is a slight slowdown from 9.6% in 2006/07 - India's fastest economic expansion in 18 years.
Over the past year India has increased interest rates and reduced the supply of the rupee to cool this breakneck growth.
"There is pressure on domestic prices, especially the prices of food articles," Mr Chidambaram told the Indian parliament."There is pressure on domestic prices, especially the prices of food articles," Mr Chidambaram told the Indian parliament.
"Management of the supply side of food articles will be the most crucial task in the ensuing year.""Management of the supply side of food articles will be the most crucial task in the ensuing year."
"Keeping inflation under check is one of the cornerstones of our policy.""Keeping inflation under check is one of the cornerstones of our policy."
Mr Chidambaram added that the government was determined to see India become sufficient in food grains. Mr Chidambaram added that the government was determined to see India become self-sufficient in food grains.
The loan cancellations will be offered to all farms with less than two hectares of land.
Mr Chidambaram also announced higher spending on rural infrastructure and highways.