The budget focuses on accelerating growth by increasing capital expenditures and compressing the fi scal defi cit. However, excluding the additional loan to the states, the capital expenditure as a ratio of gross domestic product is actually lower. Reducing the fi scal defi cit by compressing subsidies and transfers may also pose challenges. Finally, the interest-free loan to the states seems to be a strategy to ensure binding control over their borrowings for the next 50 years.
