New Delhi, Jan 13 (IANS) Leading economists have said that while a slight deviation from next year’s fiscal road map was necessary, given the additional spending burden entailed by the 7th Pay Commission, the medium-term fiscal road map should be maintained.
The economists said this on Wednesday at a pre-budget 2016-17 meeting with Finance Minister Arun Jaitley.
“We have conveyed that while a slight deviation is acceptable, there is a need to stick to medium term fiscal deficit roadmap,” Mahendra Dev of the Indira Gandhi Institute of Development Research told reporters here after the meeting.
The Fiscal Responsibility and Budget Management (FRBM) projects a fiscal deficit target of 3.9 percent of GDP for 2015-16, 3.5 percent for 2016-17 and 3 percent for 2017-18.
The country’s fiscal deficit has touched 87 percent of the budgeted amount, showing a worrying trend in government expenditure which is likely to overshoot what has been approved by parliament, official data showed.
The total fiscal deficit till November-end for the 2015 was Rs.4.84 lakh crore, compared to the budgeted amount of Rs.5.55 lakh crore for the full year, with four months still to go, according to the details released last month by the Controller General of Accounts.
The economists at the meeting also underlined the need for the government to maintain public spending in infrastructure, while simultaneously working on reducing the subsidy burden.
“The major suggestions included in bringing changes in small savings rate which will, in turn, push the economy and to focus on increasing private and public investment,” a finance ministry release said here.
Other suggestions from the economists included focusing on measures on poverty reduction, increasing female labour participation in the economy and development measures for tribals.
“It was suggested that the Socio Economic Caste Census needs to be used for identifying the right beneficiaries and thus bringing them to the forefront,” the statement added.