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India seeks to cap government borrowings
Thursday, 08 May 2003, 19:30 IST
NEW DELHI: India Wednesday introduced legislation that seeks to ensure fiscal discipline by containing expenditures and putting a statutory ceiling on government borrowings.
Moving the amendment to the Fiscal Responsibility and Budget Management Bill in Lok Sabha, Finance Minister Jaswant Singh said that it would help bring transparency and consistency in fiscal management.
Members of the Lok Sabha welcomed the bill, but said it would not solve all problems facing the economy.
"The outstanding liabilities of the central government have risen steadily over the years and as on March 31, 2004, the total liabilities are estimated to be 
18 trillion," said Singh while introducing the bill.
"The interest burden on these liabilities is 12.30 billion, pre-empting almost 50 percent of our revenue receipts."
Singh noted there was a need to "break out of the cycle of high deficit and high debt and work steadily towards a regime of surpluses".
Initiating a discussion on the bill, Shivraj Patil of the Congress party said the growing revenue and fiscal deficit of the central government was a cause of concern, but the condition of some states was worse.
Patil chaired the parliamentary standing committee that suggested the amendment, and he said the panel had recommended that safeguards be built into the legislation to "ensure that economic decision-making does not become the subject of judicial scrutiny".
Singh said the bill was historic in that "it obligates the central government to ensure fiscal sustainability in the medium-term by generating revenue surplus and bring down the debt stock as a ratio of GDP to reasonable level."
The committee had recommended that the revenue deficit should be brought down to nil and fiscal deficit to two percent of GDP in five years.
Source: IANS
18 trillion," said Singh while introducing the bill.
"The interest burden on these liabilities is 12.30 billion, pre-empting almost 50 percent of our revenue receipts."
Singh noted there was a need to "break out of the cycle of high deficit and high debt and work steadily towards a regime of surpluses".
Initiating a discussion on the bill, Shivraj Patil of the Congress party said the growing revenue and fiscal deficit of the central government was a cause of concern, but the condition of some states was worse.
Patil chaired the parliamentary standing committee that suggested the amendment, and he said the panel had recommended that safeguards be built into the legislation to "ensure that economic decision-making does not become the subject of judicial scrutiny".
Singh said the bill was historic in that "it obligates the central government to ensure fiscal sustainability in the medium-term by generating revenue surplus and bring down the debt stock as a ratio of GDP to reasonable level."
The committee had recommended that the revenue deficit should be brought down to nil and fiscal deficit to two percent of GDP in five years.
Source: IANS