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NITI Aayog agrees to Telangana plea on FRBM
The NITI Aayog is reportedly considering the demand of the Telangana State Government to increase the Fiscal Responsibility and Budget Management (FRBM) cap to 3.5 per cent of the Gross State Domestic Product (GSDP) from the existing 3 percent.
New Delhi: The NITI Aayog is reportedly considering the demand of the Telangana State Government to increase the Fiscal Responsibility and Budget Management (FRBM) cap to 3.5 per cent of the Gross State Domestic Product (GSDP) from the existing 3 percent.
However, it takes more time for the NITI Aayog to zero in on the figure as it needs to undertake consultations with other State governments. But the news that is trickling in now is that it is not against the proposal in principle.
Chief Minister K Chandrasekhar Rao had promised to waive off farm loans if the FRBM limit was raised to 3.5 per cent. Chief Secretary of Telangana Dr Rajiv Sharma on Wednesday met the NITI Aayog vice-chairman Arvind Panagariya and other members to impress them upon the need to alter the limit to 3.5 per cent in view of the financial constraints the new State was facing.
In fact, the State had been pleading for a special package of Rs 30,000 crore as assistance to overcome the constraints. The Chief Secretary reiterated the same during his meetings with the NITI Aayog members and later with the Finance Department officials.
The FRBM Act provides for the responsibility of the Central Government to ensure inter – generational equity in fiscal management and long-term macro- economic stability by achieving sufficient revenue surplus and removing fiscal impediments in the effective conduct of monetary policy and prudential debt management consistent with fiscal sustainability through limits on the Central Government borrowings, debt and deficits, greater transparency in fiscal operations of the Central Government and conducting fiscal policy in a medium-term framework and for matters connected therewith or incidental thereto.
As Telangana State eagerly awaits the changes to the Act, Dr Sharma insisted on the same as the objective of the very Act was to ensure inter-generational equity in fiscal management, long run macroeconomic stability,
better coordination between fiscal and monetary policy and transparency in fiscal operation of the Government. Dr Sharma has also pleaded for release of the pending Rs 788 crore under the 13th Finance Commission provisions and Rs 7,000 crore pending under CST compensation.
