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Bill to eliminate Govt. fiscal, revenue deficits approved

By Our Special Correspondent

NEW DELHI JULY 29. An important fiscal legislation seeking to restrict and eventually eliminate the Central Government's fiscal and revenue deficits received Parliamentary approval today when the Rajya Sabha passed it through voice vote. The Lok Sabha had approved the Fiscal Responsibility and Budget Management (FRBM) Bill during the budget session.

Winding up the two-day debate over the Bill in the Rajya Sabha, the Union Finance Minister, Jaswant Singh, promised that there would be no lowering of developmental expenditure and that the fiscal deficit would be contained through revenue mop-up and expenditure control. He admitted that the Bill was a "hesitant" step in containing fiscal deficit as the Parliamentary Standing Committee on Finance had diluted some of the stringent provisions and most of the recommendations of the Committee had been incorporated in the Bill.

The FRBM Bill, 2003, stipulates that the fiscal deficit would be brought down gradually to two per cent of the gross domestic product (GDP) and total elimination of the revenue deficit by 2008. Mr. Singh also announced that the Government would present to Parliament a quarterly review of the economy before the end of the monsoon session.

The review would present revenue generation data and expenditure details while indicating the deficit levels.

Presenting a brief picture of the difficult fiscal situation, the Minister said the country's total debt was estimated to go up to Rs. 17.79 lakh crores this fiscal from Rs. 11.68 lakh crores in 2001-02. This increase was due to the rise in internal debt which had gone up from Rs. 8,00,000 crores to Rs. 12.5 lakh crores.

Terming the debt situation, particularly that of the States, serious, he said it was time that "we do not stretch ourselves beyond the size of the mat".

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