Tough fiscal situation ahead: PM

Prime Minister Manmohan Singh apprised Opposition Bharatiya Janata Party (BJP) leaders of an impending "fiscally-tight situation" once the 12th Finance Commission recommendations came into effect.

A few days ahead of the Budget Session of Parliament, the Prime Minister met top BJP leaders Atal Bihari Vajpayee, LK Advani and Jaswant Singh.

The Prime Minister made it clear to the Opposition leaders that devolution of more funds to states as per the recommendations of the commission would mean a greater burden on central finances. A total of Rs 3,000 crore annually was the increase in the Centre's share.

The opposition leaders commiserated with the Prime Minister, saying as the recommendations were mandatory, there was nothing much to be done about them.

While there was nothing said about impending austerity measures or hard fiscal decisions, the fact that the Opposition was taken into confidence showed that the government appeared worried about the fiscal deficit.

They did, however, have plenty to say on the other item on the agenda of the meeting "" the recently held Indo-Pak talks and the opening of the Srinagar-Muzzafarbad bus link.

The BJP strongly objected to the fact that travel documents and not passports and visas would be required on the route.

The Prime Minister, according to sources, said the BJP should not object considering the fact that the bus link had been proposed by the former NDA government.

The BJP admitted that the bus link was its idea but that talks between the two governments had broken down due to this very reason.

During the presentation of the first United Progressive Alliance Budget last year, the NDA had en masse boycotted the Lok Sabha over the issue of tainted ministers.

When the Opposition leaders had met the Prime Minister outside Parliament to present their views on the Budget, there appeared to be a case of misunderstanding between the BJP leaders and the Prime Minister.

The BJP leaders felt that Singh had rudely "thrown" the papers carrying their recommendations on to his table. This had been denied by the PMO.

This time around, however, things appear to be going smoothly and despite the difference in opinion, the Budget session should be less stormy.