West Bengal lost Rs 546.68 crore (Rs 5.46 billion) in 2007-08 for not having its own fiscal responsibility law, which mandates fiscal discipline, according to the Comptroller and Auditor General (CAG).
The Union government gives debt and interest relief under the debt consolidation and relief facility to the states, which meet their targets set by Fiscal Responsibility and Budgetary Management acts. As part of the second stimulus package, states were allowed to deviate from their FRBM targets by 0.5 percentage points to go for a higher fiscal deficit of 3.5 per cent to incur additional capital expenditure to counter the slowdown in the economy of their states.
Officials in the finance ministry are not happy with credit rating agency Fitch's revision of India's local currency outlook to negative from stable. Officials say Fitch's conclusion that the central government's fiscal deficit will rise to 4.5 per cent of gross domestic product in 2008-09, as against 2.8 per cent in the previous fiscal, is wrong.
Even as the debate over off-Budget liabilities continues, former finance ministry bureaucrats and leading economists say it's time the government went beyond the targets in the Fiscal Responsibility and Budget Management Act.
'Event management can distract from, but not permanently mask, execution failures,' points out Rathin Roy, director, National Institute of Public Finance and Policy.
"This is the result of tighter fiscal discipline imposed by the fiscal responsibility framework ... and an optimistic revenue outlook driven by the buoyancy in revenue collections during the last three years of the 10th Plan," the 11th Plan document points out.
'Will Mr Jaitley listen, or is that expecting too much in pre-election season?' asks T N Ninan.
'If such inflows materialise, what will be the effect on the rupee's value -- and therefore on exports growth, the only sustainable path to recovery?', asks Mihir S Sharma.
The government should have mentioned clearly the specific structural reforms that were responsible for the deviation from the fiscal deficit target by half a percentage point, says A K Bhattacharya.
The recent agreement between the RBI and the Centre marks a significant step forward toward financial inclusion.
'If you do quick back-of-the-envelope calculation, someone earning Rs 10 lakh can get a benefit of anywhere between Rs 35,000 and Rs 45,000, even if s/he is availing exemptions.' 'A large proportion of people do not avail full exemptions as they don't have money to invest in those schemes.'
The government on May 17 formed a five-member committee.
West Bengal, the chief minister said, cannot be compared with other states and despite all hurdles it had an increased revenue generation over the last three years from Rs 21,000 crore (Rs 210 billion) to Rs 40,000 crore (Rs 400 billion).
Need of the hour is to spend to grow more, the study said.
The US president tweeted on Friday that Mulvaney "has done an outstanding job" in his administration and would take over from John Kelly in the new year.
"We are on track to bring down fiscal deficit to 3.3 per cent this year and to three per cent in the next year and hopefully remove revenue deficit in 2008-09", Finance Secretary D Subbaro said while speaking at the launch of the OECD economic survey of the Indian economy in New Delhi on Tuesday. The Fiscal Responsibility and Budget Management Act requires the government to reduce fiscal deficit to three per cent of the GDP and eliminate revenue deficit by 2008-09.
The games began a few months ago, when the finance ministry and the Planning Commission got into their well-publicised spat.
It would be interesting to see what the government proposes to investors.
The tug of war between the finance ministry and the Planning Commission over more resources for plan projects worsened, with Planning Commission Deputy Chairman Montek Singh Ahluwalia saying he was keen on getting more money for the 11th Plan.
''Even without major reforms, with a business as usual scenario, and with current inflation trends, we should be clocking around 11 to 12 per cent nominal growth.' 'That is not happening and is a source of worry,' Rathin Roy tells Arup Roychoudhury.
'You cannot fight a disease as complex as COVID-19 without a carefully calibrated, localised response.'
Finance Minister Arun Jaitley presented the Budget in Parliament on Saturday.
A parliamentary committee has pulled up the finance ministry for not adhering to Fiscal Responsibility and Budget Management Act in cutting revenue deficit by 0.5 per cent of GDP for 2005-06 saying there should not be deviations every now and then.
Finance Minister P Chidambaram said revenue deficits would have to be wiped out first in the economy.
Booming manufacturing and services sector is likely to push up India's GDP growth to 7.7 per cent in 2006-07, but inflationary pressure may lead to hike in interest rates
Economy is expected to grow by 7.2 per cent in 2005-06, a notch higher than Reserve Bank of India's estimate of 7.0 per cent
The FRBM report, to be submitted on Tuesday, is likely to have 'excuse clauses', absolving the government of meeting its fiscal commitments under certain conditions such as war or conflict, global economic meltdowns or natural disasters.
Vijay Kelkar, who headed the committee on tax reforms, on Tuesday warned that higher economic growth and foreign direct investment flow could not be achieved without hard fiscal reforms.
Ahead of the Budget, global rating agency Standard and Poor's has warned India may not be able to achieve the fiscal responsibility and budget management target of axing fiscal deficit and projected a lower growth of 6 per cent this fiscal.
The Centre will take a hit of Rs 26,000 crore (Rs 260 billion) in 2005-06 by implementing the twelfth finance commission's proposal of a higher share of central taxes, grant and debt relief to states.
The Union Budget for 2004-05, which is being viewed as a "litmus test" for the Congress-led government, may unveil the roadmap for wiping out revenue deficit well in advance by 2007 and a subsequent reduction in fiscal deficit to manageable limits.
Vijay Kelkar, advisor to the finance minister, has been entrusted with the new task of preparing quarterly review of the economy as mandated under the Fiscal Responsibility and Budget Management Act.
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