Using the debt-to-GDP ratio as a fiscal anchor aligns with efforts to promote fiscal transparency through proper disclosure of off-budget borrowings.
The panel may include or seek inputs from former RBI Governor Urjit Patel, former chief economic advisor Arvind Subramanian, Sajjid Chinoy of the PM-EAC, Rathin Roy, among others.
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.
'The finance minister missed yet another opportunity to simplify the income tax structure in the Budget.' 'This was an opportune moment to get rid of the old tax system entirely and move fully to the new system,' asserts M Govinda Rao, member of the 14th Finance Commission.
The government on May 17 formed a five-member committee.
Government looking at cushioning slowdown due to demonetisation with sops and higher outlay for micro, small and medium enterprises, agriculture, and affordable housing.
'The prime minister's comment on 'revdi culture' was welcome. But I am disappointed he did not follow up on that.' 'All political parties, including the BJP, have been guilty of this.' 'Now, Modi's guarantees, the Congress's 'nyay' path and both ruling and Opposition parties are vying with each other for freebies in my home state Andhra Pradesh.'
'I found it unbelievable that L&T said 45,000 jobs were waiting to be filled because of unavailability of suitable skillsets.' 'So, when the Opposition sweepingly says there are no jobs, I'm sorry... I'm not saying it's raining jobs, but there are jobs. The (skill) gap has to be bridged.'
However, finding the funds to fulfill them will be a herculean task.
BJP's reversals in rural Gujarat has prompted many policy watchers to predict that the Budget would have incentives for the agriculture sector and the rural economy.
Credit rating agencies have been raising red flag over high debt to GDP ratio of India.
To enable widen the fiscal deficit beyond the permissible limit under the present legislation, the government may have to propose amendment to the FRBM Act in the Finance Bill.
Softening the demonetisation blow, the Budget for 2017-18 on Wednesday halved the tax to 5 per cent on incomes up to Rs 500,000 but proposed a new surcharge of 10 per cent on incomes between Rs 50 lakh and Rs 1 crore and raised duties on cigarettes and pan masala while stepping up allocations for infrastructure, rural, agriculture and social sectors.
With less than five months left for the report of the Fifteenth Finance Commission to be submitted, its chairman N K Singh said the report will have fiscal road map for states, depending on their current situation.
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.
However, independent economists are not as gung-ho as the finance ministry over the likelihood of deficit target being met this time around, says Indivjal Dhasmana.
The panel will also recommend a fiscal consolidation road map for the central and state governments, study the impact of GST on the divisible pool, and propose performance-based incentives for states.
The bigger worry is that its effects could linger well into the next financial year.
'The CEA suggested that could be as high as 19 per cent.'
The fiscal deficit in current fiscal has been estimated at 3.9%.
The Indian economy appears to have slowed down in 2018-19 due to lower private consumption, tepid growth in fixed investment and muted exports, a finance ministry report has said.
There were heightened expectations from Budget 2017 after the impact of note ban on different sections but most remain unfulfilled.
Making a case for an optimal fiscal stance, the Economic Survey on Friday said growth leads to debt sustainability and not necessarily vice-versa. "This is because debt sustainability depends on the 'Interest Rate Growth Rate Differential' (IRGD) i.e. the difference between the interest rate and the growth rate in an economy. "With the Indian context of potential high growth, the interest rate on debt paid by the Indian government has been less than India's growth rate by norm, not by exception," it said.
Kerala has seen one of the worst floods in its history during this monsoon. From August 8 to 20, nearly 223 people have lost their lives, 33 are missing and around 1.2 million individuals from 3,02,441 families are in 3,941 relief camps. Initial losses are estimated to be around Rs 200 billion (Rs 20,000 crore). With the rescue measures in its last leg, the Kerala government is looking at raising funds to rebuild the state. In an interaction with Gireesh Babu and T E Narasimhan, Kerala Finance Minister T M Thomas Isaac says he has a three-pronged strategy to raise funds. Edited Excerpts.
In the Budget speech, Arun Jaitley had first spoken about the need to have a range.
The government plans to raise resources to finance capital spending beyond the Rs 3.10 lakh crore budgeted for 2017-18 through higher borrowing or divestment receipts.
'We are not able to manufacture even low-end products as cheaply as China.' 'We are not buying Chinese goods today out of any love for China.'
India suffers from peak power deficit of three per cent.
''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.
Reform ideas do not occur overnight and evolve over the years.
The industrial output for the third month in a row remained in the negative territory, contracting 1.5% in January
'When you start distributing wealth, you end up distributing poverty.'
'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.'
'We are looking at the Budget with the hope that it will address all issues even at the cost of exceeding the fiscal deficit target.'
Finance Minister Arun Jaitley on Monday presented the Union Budget for 2016-17.
'If some measures are implemented quickly, they can help revive growth.'
'The Reserve Bank's independence has remained a work in progress, an enduring challenge that the nation has been grappling with on an ongoing basis,' says RBI Deputy Governor Dr Viral Acharya.
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