India gets populist pre-election budget

Elections in the world’s largest democracy are not very far away.Though the five-year term of the centre-left coalition government in New Delhi ends in May 2009, there were strong indications that the next general elections could be held ahead of schedule given the populist tone of Friday morning’s annual budget of the union government.Loans waivedThe most significant aspect of the budget for the financial year that will conclude at the end of March 2009 was the announcement of a slew of loan waiver schemes that will cost the central exchequer an amount equivalent to $15 billion.While the loan waiver schemes - reminiscent of a similar effort made in 1990 - is bound to be criticised by economists for discouraging those who diligently repay loans, it will be welcomed by government politicians with an eye for votes of farmers. 

Over 150,000 farmers have taken their lives in the past ten years

 Significantly, these loan waiver schemes - that are expected to benefit 30 million small and “marginal” farmers (holding less than 2 hectares of land) and 10 million other farmers - will have to be completed by the end of June, the finance minister announced.Two out of three Indians depend on agriculture for their livelihood. The farm sector that accounts for less than one-fifth of the country’s gross domestic product has been growing the slowest.