FRBM Act

A new committee, led by former Member of Parliament and revenue and expenditure secretary NK Singh, will now review the Fiscal Responsibility and Budget Management (FRBM) Act and suggest a future roadmap. The other members of the panel are Reserve Bank of India Deputy Governor Urjit Patel, Chief Economic Advisor Arvind Subramanian, former finance secretary Sumit Bose, and Rathin Roy, the director of National Institute of Public Finance and Policy and a Business Standard columnist.

The panel will review the working of the FRBM Act over the last 12 years and suggest the path forward, keeping in mind the broad objective of fiscal consolidation and the changes required in the backdrop of global volatility and uncertainty. It will also take a re-look at various aspects, factors and considerations for determining FRBM targets and will examine the feasibility of aligning fiscal expansion or contraction with credit expansion and contraction.

The panel can also consult other government departments and outside experts during the course of its work. The panel may look at a number of indicators and trends during the course of its deliberations, including the global macroeconomic situation and global growth forecasts, the government’s debt situation, India’s debt market, household savings and consumption, lending activity of the banks, the Centre and states’ expected spending commitments and projections on India’s tax-GDP ratio over the next four-five years.c