Major Recommendations of the NK Singh (FRBM Review) Committee

♤ Public debt to GDP ratio should be considered as a medium-term anchor for fiscal policy in India. The combined debt-to-GDP ratio of the centre and states should be brought down to 60% by 2023 (comprising of 40% for the Centre & 20% for states) as against the existing 49.4%, and 21% respectively.

♤ It advocated fiscal deficit as the operating target to bring down public debt. For fiscal consolidation, the centre should reduce its fiscal deficit from the current 3.5% (2017) to 2.5% by 2023. The Committee set 0.5% as escape clause for fiscal deficit target to adjust with cyclical fluctuations

♤ The central government should reduce its revenue deficit steadily by 0.25 percentage (of GDP) points each year, to reach 0.8% by 2023, from a projected value of 2.3% in 2017.

♤ It suggested the setting up of a ‘fiscal council’, an independent body which will be tasked with monitoring the government’s fiscal announcements for any given year. It will provide its own forecasts and analysis for the same as well as advise the finance ministry on triggering the escape clauses.