FM Pushes Fiscal Discipline

The Finance Minister has bitten the bullet on fiscal discipline by including amendments to the FRBM Act (Fiscal Responsibility and Budget Management) in the Budget documents itself. The amendment would hold the government responsible to predetermined deficit targets. It will force it to keep a watchful eye on its finances. The 13th Finance Commission report had projected India’s fiscal deficit at 4.8 percent in 2011-12, 4.2 percent in 2012-13 and 3 percent in the next two fiscal years. But the fiscal deficit targets have not been met until now. Increasing subsidies has put paid to hopes that the government will be in a position to impose fiscal efficiency and prudence. Amendment to the FRBM Act could force it.