Montek says FRBM targets do not matter
The tug of war between the Finance Ministry and the Planning Commission over more resources for plan projects worsened, with Deputy Chairman Montek Singh Ahluwalia saying he was keen on getting more money for the 11th Plan rather than belt-tighten...
By PTI |
NEW DELHI: The tug of war between the Finance Ministry and the Planning Commission over more resources for plan projects worsened, with Deputy Chairman Montek Singh Ahluwalia saying he was keen on getting more money for the 11th Plan rather than belt-tightening to meet fiscal deficit targets.
"We really do not care for FRBM (Fiscal Responsibility and Budget Management Act) targets so long as we get the money (for the planned programmes)," Ahluwalia said responding to a letter from Finance Minister P Chidambaram who was not in favour of shifting goalposts of FRBM to provide more resources for the 11th Plan as suggested by the Commission.
Under the FRBM Act, the Government has reduced fiscal deficit by 0.3 per cent and revenue by 0.5 per cent of GDP annually in a bid to wipe out revenue deficit and bring down fiscal deficit to 3 per cent of GDP by 2009.
"We are just bothered about the resources for the 11th Plan," Ahluwalia told the media.
On the other contentious issue of Current Account Deficit (CAD) Ahluwalia said, "we are recalibrating the entire thing. It (CAD) depends on the impact of oil prices and domestic investment.
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The Commission is of the view that the burgeoning CAD will hinder economic growth. The CAD as a percentage of GDP is likely to grow from 2 per cent to 2.8 per cent as the GDP itself grows nine per cent from seven per cent over the five year period.The RBI too has opposed the Commission's view to dilute restrictions imposed by the Fiscal Responsibility and Budget Management Act, 2004 on government spending and fiscal profligacy.
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