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India unveils restrained pre-election budget; finance minister says fiscal deficit lowered

India's finance minister unveiled a restrained budget for the government's remaining time in office through May. He said the government has narrowed its fiscal deficit and pledged to keep government spending steady.

Palaniappan Chidambaram said Monday that India's finances are in better shape than a year ago. He said the projected fiscal deficit for the year ending March 31 would be 4.6 percent of gross domestic product, lower than the target of 4.8 percent.

Total government subsidies in areas such as food and fuel would remain steady, allaying lingering fears the Congress party-led government would splash out on populist giveaways ahead of elections to be held by May.

He also said that Asia's third-largest economy was starting to grow faster, predicting third and fourth quarter growth of 5.2 percent.