NEW DELHI, Feb 27 (Reuters) – India is likely to hit its
fiscal deficit target of 5.3 percent despite a significant
shortfall in revenue, a government report said on Wednesday, a
day before Finance Minister P. Chidambaram unveils what is
expected to be the most austere budget in years.

The annual report on challenges facing the economy was
prepared by Raghuram Rajan, a former chief economist to the
International Monetary Fund (IMF) who became the top adviser in
the finance ministry last year.

NEW DELHI (Reuters) – India reined in spending on its vast but decrepit rail network on Tuesday, setting the tone for what is expected to be the most austere federal budget in years in two days’ time as the government struggles to tame its fiscal deficit.

Gross budgetary support for the railways will rise nearly 8 percent to 260 billion Indian rupees in the coming fiscal year, less than half the 20 percent increase that was allocated in last year’s rail budget.gra

NEW DELHI (Reuters) – The government announced a fuel surcharge of just under 5 percent on freight traffic in the railway budget on Tuesday, but ducked the opportunity of a further round of passenger fare hikes as it gears up for a national election due next year.

India’s railway network is the world’s fourth largest but it has suffered from years of low investment and political meddling. The result is a creaking system plagued by delays, overcrowding and slow freight delivery times that sap the competitiveness of Asia’s third-largest economy.

NEW DELHI, Feb 26 (Reuters) – The Indian government
announced a fuel surcharge of just under 5 percent on freight
traffic in the railway budget on Tuesday, but ducked the
opportunity of a further round of passenger fare hikes as it
gears up for a national election due next year.

India’s railway network is the world’s fourth largest but it
has suffered from years of low investment and political
meddling. The result is a creaking system plagued by delays,
overcrowding and slow freight delivery times that sap the
competitiveness of Asia’s third-largest economy.

NEW DELHI (Reuters) – The finance minister had a bruising battle with cabinet colleagues in the run-up to the budget he unveils this week, rebuffing demands for pre-election spending and insisting on austerity to shore up investors’ faith in a troubled economy.

Aides to P. Chidambaram said the eloquent Harvard-educated lawyer finally convinced leaders of his Congress party that more profligate spending would make a sovereign rating downgrade to ‘junk’ status inevitable and could trigger an economic meltdown.

NEW DELHI (Reuters) – India’s finance minister had a bruising battle with cabinet colleagues in the run-up to the budget he unveils this week, rebuffing demands for pre-election spending and insisting on austerity to shore up investors’ faith in a troubled economy.

Aides to P. Chidambaram said the eloquent Harvard-educated lawyer finally convinced leaders of his Congress party that more profligate spending would make a sovereign rating downgrade to ‘junk’ status inevitable and could trigger an economic meltdown.

NEW DELHI (Reuters) – Indian Defence Minister A.K. Antony said on Tuesday it was “too early” to consider the possibility of foul play in a planned $10 billion deal with France’s Dassault Aviation for Rafale war planes.

India has threatened to scrap a $750 million deal for a dozen AgustaWestland helicopters after Italian police arrested the former head of parent company Finmeccanica, Giuseppe Orsi, last week for allegedly paying bribes to Indian politicians to win the contract.

NEW DELHI (Reuters) – Defence Minister A.K. Antony said on Tuesday it was “too early” to consider the possibility of foul play in a planned $10 billion deal with France’s Dassault Aviation (AVMD.PA: Quote, Profile, Research) for Rafale war planes.

India has threatened to scrap a $750 million deal for a dozen AgustaWestland helicopters after Italian police arrested the former head of parent company Finmeccanica (SIFI.MI: Quote, Profile, Research), Giuseppe Orsi, last week for allegedly paying bribes to Indian politicians to win the contract.

NEW DELHI (Reuters) – Finance Minister P. Chidambaram is planning to cut the public spending target for fiscal 2013/14 by up to 10 percent from this year’s original target, in what would be the most austere budget unveiled in recent history as he tries to avert a sovereign credit downgrade.

Chidambaram has already slashed actual public expenditure in the current fiscal year that ends in March by some 9 percent from the original target. So the plan for 2013/14 would in effect keep a lid on spending, limiting it to a similar rupee level or slightly higher.

NEW DELHI (Reuters) – India is seeking to cancel a $750 million order for a dozen helicopters from Italian defense group Finmeccanica, the defense ministry said on Friday, responding to growing pressure over kickback allegations.

India has frozen payments for the AgustaWestland helicopters pending an inquiry after Italian police earlier this week arrested the head of Finmeccanica (SIFI.MI: Quote, Profile, Research, Stock Buzz), Giuseppe Orsi, in connection with the case.