Govt's social sector spending inadequate by global standards, says RBI

The budget "is confronted with a tight trade-off between the rigors of fiscal consolidation and the demands for stimulating the economy," the RBI said

India’s central bank described the government’s spending on the health and education sectors in its federal budget as “woefully” below peers.

To make matters worse, the government doesn’t have much space to increase spending, given firm crude oil prices and a negative output gap, both of which could hit economic growth and be a drag on revenues.

“In terms of GDP, the social sector expenditure, primarily constituting health and education, in India continues to remain woefully below peers,” the central bank said in an assessment of the government’s budget for fiscal year started April 1. The report was published as part of