Global rates may hit Budget: FM

Expressing concerns over rising interest rates across the world, Finance Minister P Chidambaram said this would impact Budget estimates, as more money may have to be provided during the course of the year for interest payments.

Chidambaram was speaking at the meeting of G8 finance ministers being held at St Petersburg. He said other exogenous shocks like the relentless rise in oil prices may also affect Budget estimates made at the beginning of the year.

Elaborating on initiatives on good governance in public finance, Chidambaram said India's Fiscal Responsibility and Budget Management Act obliged the Centre to wipe out revenue deficit by 2008-09 and limit fiscal deficit to 3 per cent by 2008-09.

The minister said the government had introduced the Outcome Budget, which was a powerful institutional mechanism to focus on goals to be achieved by spending money allocated to various departments. The initiative would result in more informed public scrutiny to ensure better value for money, he said

India was a subscriber to special data dissemination standards, prescribed by the International Monetary Fund, he said.

An IMF assessment in 2001 found that there was a very high degree of compliance in India to the IMF Code on Fiscal Transparency, Chidambaram added. Besides, the government was obliged to place quarterly reports on the fiscal and economic situation, before Parliament.

Monthly fiscal accounts of the Centre were publicly available with a month lag, he said. The other initiative was the Right to Information Act, which empowered a citizen to call upon the government to make information available.