Mumbai: Reserve Bank governor Shaktikanta Das on Tuesday underlined the need for sticking to the fiscal roadmap by adopting a commonly agreed expenditure code-based spending plan to address the socioeconomic challenges. He also advocated giving permanent status to the finance commission. The comments from the former-economic-affairs-secretary-turned-central banker assume importance as the government for two consecutive terms have missed it fiscal deficit targets by 10 bps in the outgoing fiscal year.
Many analysts fear that even the upwardly revised fiscal deficit target of 3.4% may be difficult to meet given the massive shortfall tax and non tax collection. Das, speaking at the launch of a book ‘Indian Fiscal Federalism’, by former RBI governor YV Reddy along with GR Reddy here this evening, Das said there is now general agreement about the importance of fiscal consolidation roadmaps both at national and state levels.
“While adhering to fiscal deficit targets and debt- to-GDP ratios, it is equally important to undertake a robust expenditure planning based on a ‘commonly agreed expenditure code’ to address the socioeconomic challenges without diluting the goals of fiscal consolidation,” he said. Das, however, said his views do not represent the deliberations or the direction of thinking of the 15th Finance Commission, where he was a member for more than a year. Das said over the past several decades, the successive finance commissions have adopted different approaches with regard to principles of tax devolution, Central grants to be given to the states and fiscal consolidation issues.
