Singh, former revenue secretary, on Thursday said the fiscal and revenue deficit path as calibrated by the Fiscal Responsibility and Budget Management (FRBM) Act review committee will help India reach the optimal debt to gross domestic product (GDP) ratio. Because expenditure, for instance on education and on health, which are transferred to the states, is counted as revenue expenditure, and I think that deserves really a reconsideration,” Singh added. The initial road map required the finance minister to contain fiscal deficit at 3% of GDP in 2017-18 from 3.5% in 2016-17. “And for that, we have calibrated the path of fiscal deficit along with revenue deficit which will enable this optimal GDP debt ratio to be reached which of course has multiplier effect,” said Singh, also a member of the Bharatiya Janata Party. To achieve these targets, the panel has recommended a fiscal deficit of 3% of GDP for the next three years.

Source: Mint February 05, 2017 16:41 UTC