Time to do away with fiscal responsibility law? No virtue in stipulating 3%

Target years for reaching the desired fiscal deficit are pushed back; and when FMs are unable to get close to targets, they fudge the books and push the burden on to hapless PSUs, writes T N Ninan

The time may have come to bid goodbye to the law on fiscal responsibility, because it is doing more harm than good. No deficit target set under the law has been met in any year, except perhaps once in 2007-08. Target years for reaching the desired fiscal deficit (3 per cent of gross domestic product) have been pushed back constantly, or “paused”. The compounding problem is that, when finance ministers have been unable to get even close to the targets, they have fudged the books and pushed the fiscal burden on to hapless public-sector entities, whose treasuries have been raided