The Kelkar panel is likely to submit its report on fiscal consolidation this week.
The report will come at a time when the Centre’s fiscal deficit has already touched 50 per cent of Budget estimates for the current financial year in just four months. Finance Minister P Chidambaram had asked 13th Finance Commission Chairman Vijay Kelkar, and its members Indira Rajaraman and Sanjiv Misra, to suggest the path of fiscal consolidation.
The Budget projected fiscal deficit to come down to 5.1 per cent of GDP for this fiscal from over 5.7 per cent in 2011-12. However, this projection seems difficult to meet as the Centre's fiscal deficit stood at Rs 2.64 lakh crore till July, which is 51.5 per cent of the Budget estimate of Rs 5.13 lakh crore for 2012-13, analysts said.
During the April-June period, the fiscal deficit already touched 8.1 per cent of quarterly gross domestic product (GDP).
Last month, Chidambaram had stated the burden of fiscal correction must be shared, fairly and equitably, by different classes of stake holders.
“The poor must be protected and others must bear their fair share of the burden. Obviously, adjustments must be made both on the revenue side and on the expenditure side,” he had said.
The statement indicated the government might bite bullet on some tough decisions.
According to fiscal consolidation papers laid in Parliament, fiscal deficit is slated to be reduced to 4.5 per cent in 2013-14 and 3.9 per cent in 2014-15.
