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Way forward

We have to find balance between these apparently conflicting objectives as under:

♤ Reprioritize expenditure, with greater focus on the productive capital expenditure and reducing revenue expenditure.

♤ Rationalize subsidies to increase fiscal space.

♤ Divest government’s stakes held in specified PSUs and utilize these resources for

capital investment.

♤ In line with Vijay Kelkar Committee’s report on PPP, we should resolve the stuck

investment projects and revive the PPPs.

♤ As suggested by FFC, there should be an independent Fiscal Council to monitor the implementation of fiscal rules by the government.

♤ The implementation of a well-designed Goods and Services Tax (GST) and other tax reforms would also play the crucial role in enhancing revenues.

♤ Exploring feasibility of having a ‘fiscal deficit range’ as the target in place of the

existing fixed numbers(percentage of GDP) as fiscal deficit target.


 

2. It is argued that India’s fiscal centre of gravity has rapidly shifted from the Centre to the States. Analyse the statement in context of the debate on fiscal discipline. Also, enumerate the key recommendations of the N.K. Singh panel on Fiscal Responsibilty and Budget Management Act.Answer:3. Successive Finance Commissions have tried to balance the twin issues of fiscal discipline and regional disparities. Yet, they have been criticized by both the rich and poor states for neglecting their needs. Discuss. How far has the 14th Finance Commission been able to address this issue?Answer:4. What are the objectives of public debt management in India? Examine the rationale for setting up an independent agency to manage government debt. Also highlight the issues that need to be addressed to ensure successful debt management by an agency other than the RBI.Answer:

  

 

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