 "New review panel for FRBM law")
The government announced the formation of the five-member panel on Tuesday.
The other members of the panel are Reserve Bank of India Deputy Governor Urjit Patel, Chief Economic Advisor Arvind Subramanian, former finance secretary Sumit Bose, and Rathin Roy, the director of National Institute of Public Finance and Policy and a Business Standard columnist.
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The terms of reference of the committee, whose idea was first mooted by Finance Minister Arun Jaitley in his 2016-17 Union Budget speech, include examining the need and feasibility of having a "fiscal deficit range" as targets in place of existing fixed numbers as percentages of gross domestic product, said an official finance ministry statement.
The panel will review the working of the FRBM Act over the last 12 years and suggest the path forward, keeping in mind the broad objective of fiscal consolidation and the changes required in the backdrop of global volatility and uncertainty.
It will also take a re-look at various aspects, factors and considerations for determining FRBM targets and will examine the feasibility of aligning fiscal expansion or contraction with credit expansion and contraction.
"The committee will also examine and give recommendations on any other aspect considered relevant in relation to the determination and implementation of the FRBM roadmap. It may be entrusted with additional terms of reference, if considered necessary," the statement said, adding the panel will submit its report to the government by the 31 October, 2016.
The panel can also consult other government departments and outside experts during the course of its work.
"While remaining committed to fiscal prudence and consolidation, a time has come to review the working of the FRBM Act, especially in the context of the uncertainty and volatility which have become the new norms of global economy. I, therefore, propose to constitute a committee to review the implementation of the FRBM Act and give its recommendations on the way forward," Jaitley had said in his Budget speech on 29 February.
As reported by the Business Standard earlier, the panel may look at a number of indicators and trends during the course of its deliberations, including the global macroeconomic situation and global growth forecasts, the government's debt situation, India's debt market, household savings and consumption, lending activity of the banks, the Centre and states' expected spending commitments and projections on India's tax-GDP ratio over the next four-five years.
THE FRBM COMMITTEE MEMBERS
N K SINGH
A former BJP Rajya Sabha MP, Singh was the secretary to former Prime Minister Atal Bihari Vajpayee till 2001. He also held the posts of expenditure secretary and revenue secretary between 1995 and 1998
SUMIT BOSE
A 1976-batch IAS officer, was the finance secretary from December 2013 to March 2014. He headed the revenue and expenditure departments under Pranab Mukherjee and P Chidambaram. He was a member of the expenditure management commission
URJIT PATEL
An economist and an Oxford and Yale alumni, Patel is deputy governor at RBI. He headed a committee which recommended inflation targeting and switching focus from wholesale inflation to retail inflation
ARVIND SUBRAMANIAN
The chief economic advisor is an IIM and Oxford alumni, whose was previously at the IMF. In his last Economic Survey, Subramanian had recommended delaying the fiscal consolidation roadmap in favour of enhanced spending
RATHIN ROY
Director of National Institute of Public Finance and Policy since 2013, Roy has served as economic advisor to the 13th Finance Commission and was member of the Seventh Pay Commission. He worked in the United Nations Development Programme before joining NIPFP