FRBM panel studying GDP and tax numbers to submit report soon

The committee was originally slated to submit its report by October 31, but exceeded the time table after the government expanded their scope of work to include examination of the recommendations of 14th Finance Commission as also of the Expenditure Management Commission (EMC).

The other members of the committee, which was announced by Finance Minister Arun Jaitley in his Budget speech, include former finance secretary Sumit Bose, Chief Economic Advisor Arvind Subramanian, the then RBI deputy governor Urjit Patel and NIPFP Director Rathin Roy.

Among other things, the committee is examining the need and feasibility of having a 'fiscal deficit range' as the target in place of the existing fixed numbers (percentage of GDP) as the goal.

The committee was set up to review the working of the Fiscal Responsibility and Budget Management (FRBM) Act over the last 12 years and suggest the way forward "keeping in view the broad objective of fiscal consolidation and prudence and the changes required in the context of the uncertainty and volatility in the global economy".

While announcing the intention of the government to set up a committee to examine the FRBM Act, Jaitley in his Budget speech in February last year had said "there is a school of thought which believes that instead of fixed numbers as fiscal deficit targets, it may be better to have a fiscal deficit range as the target, which would give necessary policy space to the government to deal with dynamic situations".

Before presentation of the Budget for 2016-17, several economists had suggested that the government should breach the FRBM fiscal deficit target of 3.5 percent and increase public spending to boost growth. Deficit in 2015-16 is estimated at 3.9 percent.

Jaitley, however, decided to stick to the deficit target, but announced setting up of a committee to examine the feasibility of a fiscal deficit range instead of a target.