The World : India Cuts Defense Outlay

India’s government has slashed defense spending and diverted funds to fight hunger and illiteracy and provide housing for the homeless. The unprecedented reduction in defense spending was contained in the government’s budget for 1989-90, introduced in Parliament by Finance Minister S. B. Chavan. India will spend $133 million less on defense in the 1989-90 fiscal year compared to the previous year, Chavan said. He pledged to spend $1.1 billion on aid for hunger, illiteracy and the homeless, an increase of $333 million from last year. The added funds for social programs will be raised directly from taxing the upper-middle classes, including an 8% surcharge on annual incomes of more than $3,300.