Kolkata, Sep 13 (IANS) The Fiscal Responsibility and Budget Management (FRBM) Committee’s head N.K Singh on Tuesday said the panel is examining the forward path for debt sustainability and fiscal rectitude so that growth priority and macro-economic stability can be combined.
The committee will submit its report to the government by October 31.
“The committee has made wide ranging recommendations. We have met all the stakeholders and international entities and organisations. We give our report by the target date of October 31,” Singh said.
“The committee is deliberating what should be the forward path in terms of the overall debt sustainability and of fiscal rectitude which consolidates virtues of growth and macro management,” he said.
Singh said the committee’s recommendation must be consistent with macro-economic stability.
“We do not want macro-economic stability to be impaired. India has received a large FIIs (Foreign Institutional Investors) and FDIs (Foreigh Direct Investments) investments. We would like to improve our credit ratings…combine the priority of growth and importance of macro-economic stability,” he said on the sidelines of a programme — “What will take for a 10 percent Growth” — organised by MCC Chamber of Commerce & Industry.
He also advocated that FRBM monetary and fiscal policy must act in tandem even though they are inversely related. The FRBM Act was introduced to institutionalise financial discipline, reduce India’s fiscal deficit, improve macro-economic management and the overall management of the public funds by moving towards a balanced budget.
In the 2016-17 budget speech, Union Finance Minister Arun Jaitley proposed the constitution of a committee to amend the FRBM Act. Subsequently, in May, the government constituted a five-member panel, headed by N.K. Singh, former Secretary in the Finance Ministry and former member of parliament, to suggest by October a roadmap for fiscal consolidation.
The panel was given the task to take a relook whether a fiscal deficit range as the target in place of fixed numbers as percentage of gross domestic product would be better or not.
The panel was also asked to examine the working of the FRBM Act over the past 12 years and to suggest the way forward, “keeping in view the broad objective of fiscal consolidation and prudence and the changes required in the context of the uncertainty and volatility in the global economy”.
Finance Minister Arun Jaitley had said in his budget speech that it might be better to have a fiscal deficit range as the target, which would give necessary policy space to the government to deal with dynamic situations.