Following the Budget announcement, the government in a month will be setting up a committee to review Fiscal Responsibility and Budget Management (FRBM) Act, with an aim to look into the feasibility of setting a range for fiscal deficit targets, as against the current practice of a fixed number.
Economic affairs secretary Shaktikanta Das has said that considering the fact that FRBM is under implementation for the last 10 years, time has come to review the FRBM law. In his Budget speech for 2016-17, finance Minister Arun Jaitley has said that the FRBM law would be reviewed, as it might be better to have a range of targets, enabling more flexibiliity in policy, which would give necessary policy space to the government to deal with ever-changing dynamics and that a committee would be constituted for this, while retaining the fiscal deficit target at 3.5 per cent of the gross domestic product for next financial year and 3.9 per cent of the GDP for this financial year.
Das further said that despite slowdown in the global economy, India is expected to grow at 7.6 per cent in the current fiscal, which would get better at 8 per cent and cross that mark in years to come. Additionally he said he hope the constitutional amendment on a goods and services tax will be passed by Parliament in the current session.