NEW DELHI: The Government set-up panel to review the working of the Fiscal Responsibility and Budget Management Act has sought the views of the Indian central bank on the path to fiscal consolidation.
According to official statements, the panel will consequently submit its report in January, after factoring in the inputs of the Reserve Bank of India.
“The FRBM Panel is likely to submit report by January 13. The panel has sought RBI’s view on fiscal consolidation path,” sources said.
The five member panel, headed by former revenue secretary N K Singh, was set up in May this year to review the working of the 12-year old FRBM Act and examine the feasibility of a fiscal deficit range instead of a fixed target.
The Committee was originally slated to submit the report by October 31, but had exceeded the time table after the government expanded their scope of work to include examination of the recommendations of 14th Finance Commission and the Expenditure Management Commission (EMC).
According to sources, the report of the panel might suggest deviating from the current 3 per cent fiscal deficit target in 2017-18 and suggest a specific target for fiscal deficit instead of range.
Others in the know, however, point out that the panel might not table the report until after the Union Budget is presented.
Among other things, the panel has been examining the need and feasibility of having a ‘fiscal deficit range’ as the target in place of the existing fixed numbers (percentage of GDP) as the goal.
While announcing the intention of the government to set up a committee to examine the FRBM Act, Finance Minister Arun Jaitley in his Budget speech in February had said “there is a school of thought which believes that instead of fixed numbers as fiscal deficit targets, it may 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”.