India has announced $4bn (£2.72bn) in extra spending to boost its economy as the global financial crisis unfolds. The government said it was also planning a substantial spending increase in next year's budget. The move came as the Reserve Bank of India cut its key interest rate by one percentage point, from 7.5% to 6.5%, on Saturday to encourage spending.
Prime Minister Manmohan Singh's office said in a statement: "The government has decided to seek authorisation for additional planned expenditure of up to 200bn rupees ($4bn) in the current year."
India's rising budget deficit means it can do far less than a country like China - which last month announced a $586bn stimulus package - to spend its way out of economic problems.
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