India unveiled huge handouts for farmers, setting the stage for an election-year spending spree, a possible prelude to implementing a universal basic income in an effort to deal with widespread poverty.
India’s budget for the year starting April 1, which was released Friday, doubled the income at which people have to start paying taxes, while promising payouts to help small farmers. The moves are aimed at shoring up support for Prime Minister Narendra Modi’s party, which hopes to retain control of the world’s largest democracy in elections scheduled to start before May. They could also trigger a bidding war for support at the ballot box.
The planned spending, along with previous handouts, forced the country to miss its fiscal deficit target. It was supposed to hit 3.3% of gross domestic product in the year ending March, but instead will rise to 3.4% of GDP. Next year’s target is also 3.4%, rather than around 3.1%, where it would have been without all the farm aid, said interim Finance Minister Piyush Goyal.
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