The Indian government laid out plans in this year's budget to spend over 9 per cent than the previous year, with a higher allocation of funds for rural infrastructure, health care and agriculture, in a bid to win over voters ahead of parliamentary elections in 2019.
Arun Jaitley, the finance minister, presented his annual budget to parliament on Thursday – before the eight state elections over the coming year and the general elections next summer. He did so amid growing concerns about India's flagging economy and its inability to create enough jobs for the million people who enter the workforce every month.
"We are now firmly on course to achieve high growth of 8 per cent plus," Mr Jaitley said.
India’s economy is projected to expand between 6.5 to 6.75 per cent in the 2017-18 financial year—the lowest in the four years since Prime Minister Narendra Modi came to power, according to government figures.
Among big-ticket expenditure items is an increase in the minimum price at which the government buys grain from farmers. The new price will be 1.5 times the old price. At the moment, the minimum support price stands at around 1,550 rupees (Dh88.92) per 100 kilograms for rice, for example, and around 5,400 rupees per 100 kgs for lentils.
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The government has earmarked a 20-billion-rupee fund to improve the transport, storage and sales infrastructure around the 22,000 state-run agricultural markets in the country. The capital outlay for the infrastructure sector accounts for about a fifth of total budgeted expenditure.
Agriculture accounts for 14 per cent of the Indian economy, employing at least 263 million Indians, 22 per cent of the country's population, according to government census data. Millions more depend upon the sector indirectly for their livelihood. The budget does not provide revenue estimates. Those emerge after the end of the tax year in March.
The measures targeting farmers were a response to a deepening crisis in the sector. Farmers have held protests across the country over their diminishing incomes. India suffered crippling droughts in 2014 and 2015, and prices of food products have since tumbled.
Mr Modi’s November 2016 move to demonetise large currency notes, in an effort to root out individuals who had stashes of untaxed and undeclared money, also hurt farmers. Vegetable prices, for example, were lower by 24 per cent compared to November 2015, and by 33 per cent the following month.
In response to farmer protests, state governments across India announced massive waivers of agricultural loans. The state of Maharashtra, for instance, agreed to waive 340 billion rupees in farmer loans last year.
The budget includes a new health insurance scheme to cover 500 million of India’s poorest people, dubbed “the world’s largest healthcare programme”. The scheme provides health insurance coverage of 500,000 rupees per family every year.
The government will spend 12bn rupees to create 150,000 new health and wellness centres around the country, to bring medical care "closer to the homes of people," Mr Jaitley said.
The budget also promised funds to build 10 million houses in rural India over the next two years. A new funding agency will also channel public and private investment into higher education, aiming to invest 1 trillion rupees over the next four years.
“I don’t think I can blame the budget for being motivated by scoring points in election, but the fiscal arithmetic is faulty,” Manmohan Singh, an economist and India’s previous prime minister, said. “This budget is high on projecting a bright picture, but how will that be sustained [given the deficit]?”
The new expenditures widen India’s fiscal deficit. As policy, India targets a deficit that is 3 per cent of the country’s GDP. Ahead of the budget, a Reuters poll of economists estimated Mr Jaitley’s target to be 3.2 per cent. Thursday's budget revealed the government faces 3.5 per cent deficit in 2017-18 and 3.3 per cent in 2018-19.
The wider shortfall is a function of shrinking revenue rather than outlandish expenditure, said John Samuel Raja, the founder of How India Lives, a firm that analyses government data.
"The total planned spending for 2018-19 is 24tn rupees. For the previous year, it was 22tn rupees, and 19.75tn the year before that," Mr Raja said. "So an increase of 10 or 11 per cent every year is standard."
But revenues haven’t kept pace with expenditure, he pointed out, “and that’s a very bad sign.”
What is an ETF?
An exchange traded fund is a type of investment fund that can be traded quickly and easily, just like stocks and shares. They come with no upfront costs aside from your brokerage's dealing charges and annual fees, which are far lower than on traditional mutual investment funds. Charges are as low as 0.03 per cent on one of the very cheapest (and most popular), Vanguard S&P 500 ETF, with the maximum around 0.75 per cent.
There is no fund manager deciding which stocks and other assets to invest in, instead they passively track their chosen index, country, region or commodity, regardless of whether it goes up or down.
The first ETF was launched as recently as 1993, but the sector boasted $5.78 billion in assets under management at the end of September as inflows hit record highs, according to the latest figures from ETFGI, a leading independent research and consultancy firm.
There are thousands to choose from, with the five largest providers BlackRock’s iShares, Vanguard, State Street Global Advisers, Deutsche Bank X-trackers and Invesco PowerShares.
While the best-known track major indices such as MSCI World, the S&P 500 and FTSE 100, you can also invest in specific countries or regions, large, medium or small companies, government bonds, gold, crude oil, cocoa, water, carbon, cattle, corn futures, currency shifts or even a stock market crash.
Dubai World Cup Carnival card
6.30pm: UAE 1000 Guineas Trial Conditions (TB) US$100,000 (Dirt) 1,400m
7.05pm: Handicap (TB) $135,000 (Turf) 1,000m
7.40pm: Handicap (TB) $175,000 (D) 1,900m
8.15pm: Meydan Challenge Listed Handicap (TB) $175,000 (T) 1,400m
8.50pm: Dubai Stakes Group 3 (TB) $200,000 (D) 1,200m
9.25pm: Dubai Racing Club Classic Listed Handicap (TB) $175,000 (T) 2,410m
The National selections
6.30pm: Final Song
7.05pm: Pocket Dynamo
7.40pm: Dubai Icon
8.15pm: Dubai Legacy
8.50pm: Drafted
9.25pm: Lucius Tiberius
Coming soon
Torno Subito by Massimo Bottura
When the W Dubai – The Palm hotel opens at the end of this year, one of the highlights will be Massimo Bottura’s new restaurant, Torno Subito, which promises “to take guests on a journey back to 1960s Italy”. It is the three Michelinstarred chef’s first venture in Dubai and should be every bit as ambitious as you would expect from the man whose restaurant in Italy, Osteria Francescana, was crowned number one in this year’s list of the World’s 50 Best Restaurants.
Akira Back Dubai
Another exciting opening at the W Dubai – The Palm hotel is South Korean chef Akira Back’s new restaurant, which will continue to showcase some of the finest Asian food in the world. Back, whose Seoul restaurant, Dosa, won a Michelin star last year, describes his menu as, “an innovative Japanese cuisine prepared with a Korean accent”.
Dinner by Heston Blumenthal
The highly experimental chef, whose dishes are as much about spectacle as taste, opens his first restaurant in Dubai next year. Housed at The Royal Atlantis Resort & Residences, Dinner by Heston Blumenthal will feature contemporary twists on recipes that date back to the 1300s, including goats’ milk cheesecake. Always remember with a Blumenthal dish: nothing is quite as it seems.
A Bad Moms Christmas
Dir: John Lucas and Scott Moore
Starring: Mila Kunis, Kathryn Hahn, Kristen Bell, Susan Sarandon, Christine Baranski, Cheryl Hines
Two stars
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
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Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
match info
Maratha Arabians 138-2
C Lynn 91*, A Lyth 20, B Laughlin 1-15
Team Abu Dhabi 114-3
L Wright 40*, L Malinga 0-13, M McClenaghan 1-17
Maratha Arabians won by 24 runs
Top Hundred overseas picks
London Spirit: Kieron Pollard, Riley Meredith
Welsh Fire: Adam Zampa, David Miller, Naseem Shah
Manchester Originals: Andre Russell, Wanindu Hasaranga, Sean Abbott
Northern Superchargers: Dwayne Bravo, Wahab Riaz
Oval Invincibles: Sunil Narine, Rilee Rossouw
Trent Rockets: Colin Munro
Birmingham Phoenix: Matthew Wade, Kane Richardson
Southern Brave: Quinton de Kock
Despacito's dominance in numbers
Released: 2017
Peak chart position: No.1 in more than 47 countries, including the United States, the United Kingdom, Australia and Lebanon
Views: 5.3 billion on YouTube
Sales: With 10 million downloads in the US, Despacito became the first Latin single to receive Diamond sales certification
Streams: 1.3 billion combined audio and video by the end of 2017, making it the biggest digital hit of the year.
Awards: 17, including Record of the Year at last year’s prestigious Latin Grammy Awards, as well as five Billboard Music Awards