Describing the Union Budget for 2017-18 as “a fairly routine Budget”, former RBI Governor C Rangarajan on Wednesday said changing the road map to reach the fiscal deficit target of 3 per cent over the year will make a mockery of the Fiscal Responsibility and Budget Management (FRBM) Act.
“It was a fairly routine Budget... in the sense that there have not been much changes on the revenue side. Nevertheless, I am happy that the fiscal deficit is maintained at 3.2 per cent. The original road map has set it at 3 per cent,” Rangarajan told a news channel.
“But given the need for expenditure, I suppose some modification on that is okay. I must emphasise the point that changing the road map for reaching the 3 per cent fiscal deficit target over the years will make a mockery of the FRBM Act.”
Finance Minister Arun Jaitley today proposed bringing down fiscal deficit to 3.2 per cent of GDP in 2017-18 from 3.5 per cent in 2016-17.
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“... I have pegged fiscal deficit at 3.2 per cent in 2017-18 and remain committed to achieve 3 per cent in the following year. With this gradual approach, I have ensured adherence to fiscal consolidation without compromising requirements of public expenditure,” Jaitley said in his Budget speech.
Revenue deficit will be reduced to 2.1 per cent in 2017-18, from 2.3 per cent in 2016-17, the finance minister said.
Net market borrowing will be Rs 3.48 lakh crore in 2017-18, from 4.1 per cent in the current fiscal, he said.