Modi's election budget, high on rural spending, may push RBI to raise rates

Budget 2018 has focused on tamping down rural discontent ahead of elections, signalling higher government expenditure

India’s Narendra Modi delivered an election year Union Budget focused on tamping down rural discontent ahead of crucial elections, spending that could prompt the central bank to raise interest rates in the coming months.

With less than a week to go before the Reserve Bank of India meets to decide on policy, Finance Minister Arun Jaitley unveiled a budget that opens the taps for impoverished farmers, guaranteeing higher minimum crop prices and more spending on infrastructure projects in India’s vast rural hinterland.

That may prompt some of the six-member monetary policy committee to turn more hawkish. A Bloomberg