India, like many other countries, is increasing spending in order to dig itself out of the economic hole it stumbled into. It’s hoped that the government’s plans will provide the necessary muscle to lift the economy and related exchange traded funds (ETFs).

India’s Finance Minister Pranab Mukherjee believes the economy is on track for a 9% growth rate in 2009, writes P. Vijian for Bernama. The government will be promoting inclusive growth and reforms will be aimed toward the rural sector.

Mukherjee discussed plans for the poor, including rural employment and overhauling fertilizer subsidies to favor farmers, which would cost $8.1 billion for the fiscal year, report Vikas Bajaj and Heather Timmons for The New York Times. He also plans on reducing the population in severe poverty by half within five years. In 2005, an estimated 27.5% were reported to suffer from poverty.

Infrastructure spending will be increased to 9% of GDP by 2014. A range of tax reductions will be implemented for the elderly and women, for goods and services bought by exporters, as well as for construction companies and technology firms. In total, government spending will reach 36% and the deficit for 2009/10 will be at a calculated 6.8% of GDP. Ratings firms warned of a credit rating reduction to junk status if the deficit rises too much.

Domestic and foreign investors were dissatisfied because the budget presentation did not include the type of changes that would stimulate investment and reduce the role of government in the economy. Multinational companies, foreign investors and overseas universities were anticipating government relaxation of investment limits in banking, retail, education and other sectors.

• WisdomTree India Earnings (EPI): up 40.5% year-to-date

• PowerShares India (PIN): up 36.4% year-to-date

For more information on India, visit our India category. Also, be sure to take a look at the other BRIC ETFs in our special BRIC report.

Max Chen contributed to this article.

Tags: Asia, Emerging Markets, EPI, Global ETFs, India, PIN