FRBM panel sets 2.5% fiscal deficit target by FY23

Panel has provided for 'escape clauses' for deviations in fiscal deficit up to 0.5%

A Fiscal Responsibility and Budget Management (FRBM) panel has recommended a fiscal deficit target of 2.5 per cent of the gross domestic product (GDP), revenue deficit of 0.8 per cent and a combined Centre-state debt ceiling of 60 per cent for fiscal year 2022-23, the end point of its six-year medium-term fiscal road map. 

These and other recommendations form part of the draft debt management and fiscal responsibility Bill, which, if accepted by the Narendra Modi government, will replace the existing FRBM Act.

With an aim to provide flexibility to policymakers within the fiscal framework, the panel, headed by former