India overspending, minister says

India overspending, minister says

Indian government spending is excessive and unsustainable, but almost impossible to correct, Finance Minister Jaswant Singh has warned.

We can't just keep going on this path. We've got to sit down together and address it

Jaswant Singh

In an unusually forthright speech, Mr Singh told the Indian parliament that finance ministry hands were tied by "political ping-pong".

The sectors that benefit from state money demand ever more subsidy, yet government borrowing - some 1.5 trillion rupees (£20bn; $32bn) this year - is already as high as it can be.

"How can we afford to go on like this?" Mr Singh demanded.

Earlier this week, political pressure forced Mr Singh to scrap plans to raise the artificially low price of fertiliser, a move that would have earned 7bn rupees for the state.

All together now

Alone, the finance ministry can do almost nothing to moderate spending, Mr Singh said.

"What to do about all this is a decision the political community has to take collectively," he said.

"We can't just keep going on this path. We've got to sit down together and address it."

Mr Singh's remarks came during a parliamentary debate on the appropriations bill, a vital part of the passage of the budget, which was unveiled at the end of last month.

No shrinking violet

Since becoming finance minister last July, Mr Singh has not fought shy of speaking his mind.

He has made a point of attacking many of the cosy assumptions of the Indian establishment, and has noisily pushed for liberalisation and modernisation of the economy.

He is particularly keen to chop away at the bureaucracy, which he told parliament was "unbelievably complex, turgid, impossible to unravel."

If India could trim its bureaucracy, it could easily add two or three percentage points to its annual growth rates, Mr Singh said.