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Rathin Roy: Delivering effective fiscal responsibility

Rathin Roy

The government intends to review the Fiscal Responsibility and Budget Management (FRBM) Act. Many commentators interpret this as a redefinition of fiscal and revenue targets - possibly a "range" rather than specific numbers - plus some exit clauses, and an unelected Fiscal Council. This is unfit for the purpose. India's fiscal management is in urgent need of reform, the centrepiece being a fiscal responsibility framework (FRF) that improves the predictability of government macro-fiscal policy and maintains fiscal discipline, while allowing space to government to respond to ...