PHDCCI asks Centre, states to minimise expenditure

The Central and state governments should minimise expenditure as the fiscal deficit is expected to cross 10 per cent of the GDP, Industry chamber PHDCCI said today.

"Fiscal indicators do not show healthy signs and this calls for tightening of belt by governments both at the Centre and states," the chamber said.

The combined fiscal deficit of the union and state governments in 2009-10 is projected at over 10 per cent of the GDP, it added.

The share of revenue expenditure of the Centre has increased from 77 per cent in 2004-05 to 83 per cent in 2007-08, implying that share of capital expenditure has declined, it said. The revenue expenditure of 22 states has risen from 72 per cent to 77 per cent.

The chamber also stressed on strengthening of centre- state relations in the coming year and released a 4-point action plan for political parties in this connection.

It has suggested that centrally sponsored schemes should be debated intensively at inter-state council for reaching consensus and capacity building of the state-level employees to ensure faithful implementation of welfare programmes.