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Ajay Chhibber: Redoing the fiscal math

Given the key role of states and PSUs in the economy, the panel that is reviewing FRBM Act must examine the broader public sector's finances, and not focus purely on the Centre's fiscal deficit

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Fiscal Deficit

Ajay Chhibber 

Ajay Chhibber

The latest IMF advice to India is to continue with fiscal consolidation. Nothing wrong with that per se, but India needs a more sophisticated approach to its fiscal policy.

Given the politician's penchant for fiscal profligacy, the Fiscal Responsibility and Budget Management Act, 2003 (or FRBM Act) was seen as a way of constraining excessive public spending, reducing the fiscal deficit and eliminating the revenue deficit. It has had a mixed history and the government has constituted a new panel to review the Act and suggest improvements. The government rigorously followed the Act between ...

First Published: Sat, August 20 2016. 21:50 IST
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