Government will incorporate some of the recommendations of the NK Singh Committee on the fiscal roadmap and framework into the next year’s Budget to have a tight grip on the debt and further control fiscal deficit, a senior Finance ministry Official said today.
"That's a very important recommendation and will be fed into budget. Very soon we will come up with a decision. On fiscal management we are very much committed. Will follow calibrated measures to bring down fiscal deficit which will also impact the debt level which is still higher", said the official.
The Fiscal Responsibility and Budget Management (FRBM) Committee headed by NK Singh, former Revenue and Expenditure Secretary had presented its Report to the Union Finance Minister Arun Jaitley in January this year.
The report recommended maintaining a debt-to-GDP ratio of 60 per cent by 2023 and a fiscal deficit of 3 per cent of GDP for the next three fiscal years. The panel had also incorporated an escape clause of 0.5 percentage point of GDP in the event of certain triggers, including unavoidable fiscal situations.
With the abolition of Plan-Non Plan classification of expenditure, the focus is now on Revenue and Capital expenditure. Taking note of the fiscal deficit roadmap for the next three years and considering the need for higher public expenditure in the context of sluggish private sector investment and slow global growth, Jaitley had pegged the fiscal deficit for 2017-18 at 3.2% of GDP and further committed to achieve 3% in the following year -- 2018-19.
The official said India is the fastest growing economy in the world despite some soft spots last year.
"Those things have played out...and institutions expect India to resume plus seven per cent growth, the highest in the world," he said.
Taking note of the huge NPAs in the banking sector, the senior official said "there is some stress in the financial sector, especially the banking system, and that is an area where a lot of action is required”.