Big spender

On July 6th India's finance minister, Pranab Mukherjee, unveiled the recently re-elected government's budget for the 2009/10 fiscal year (April-March). The budget focuses squarely on spurring growth through fiscal stimulus and higher infrastructure spending. It also dramatically increases outlays on welfare and job-creation programmes, particularly in rural areas. This agenda, which rewards the electorate for Congress's unexpectedly sweeping victory at the polls, is politically astute. But its economic wisdom is somewhat questionable, as it will also exacerbate India's already-alarming budget deficit and disappoint hopes for much-needed liberalising reforms.