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Calls for higher spending put deficit targets in jeopardy

Higher deficits would also revive risks of a ratings downgrade

Reuters  |  New Delhi 

A weak recovery from India's longest growth slowdown in decades is pushing Prime Minister Narendra Modi's advisers to consider loosening fiscal deficit targets, risking the ire of investors, ratings agencies and the central bank. Ahead of the budget in February, Modi's new team of advisers has argued for higher deficits to fund infrastructure projects needed to remove bottlenecks constraining growth and to create jobs for a burgeoning workforce. Yet with debt service devouring 42% of government spending, higher deficits would revive risks of a ratings downgrade and ...

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First Published: Fri, January 09 2015. 07:58 IST