Former finance minister and senior BJP leader Yashwant Sinha today said profligacy on the fiscal deficit target front is "not a healthy situation".
"In 2008-09, fiscal deficit was allowed to go up from 2.5 per cent to 6 per cent, then it went up to 6.5 per cent, came down to 4.8 per cent, went up to 5.8 per cent...4.9 percent, 4.4 per cent, 4.1 per cent and now projected at 3.9 per cent next fiscal. This is not a healthy situation," Sinha said at an event here today.
His comments come in the backdrop of Finance Minister Arun Jaitley increasing the FY 2016 fiscal deficit target to 3.9 per cent as against 3.6 per cent set earlier as part of the fiscal consolidation roadmap spelt out in Budget 2015-16.
Jaitley had also said said fiscal deficit target of 3 per cent would be now achieved in three years as against two years targeted earlier.
It was during Sinha's tenure as finance minister in the Atal Behari Vajpayee government that the country passed the Fiscal Responsibility and Budget Management (FRBM) Act, which had set a minimal fiscal deficit target.
"My point here is that the FRBM Act was passed after lots of discussions in Parliament. It should not be allowed to be amended through a Finance Bill, which every finance minister has done," Sinha, whose son Jayant Sinha is an MoS at the finance ministry, said.
Criticising Jaitely's immediate predecessor in the UPA regime, P Chidambaram, Sinha said: "He (Chidambaram) is the one who took all this liberty. He is the one who not only postponed but took a holiday from the FRBM Act. Why? Because all you have to do is to make a provision in the Finance Bill and say this is what I want," Sinha said.
"And, therefore I have suggested publicly that the FRBM Act should be discussed by Parliament only and they should decide whether we need the FRBM Act or not. But if we feel that FRBM Act is needed then amendment to the act should come separately and not through an annual Finance Bill," Sinha said.
Sinha also described the Budget as a comprehensive one which will support growth going ahead.
"All in all, budget making is a complex exercise in a country like ours as we have to take care of so many things, I have no hesitation in saying that this Budget is one of the most comprehensive ones that I have seen. It has been very competitively done. It augurs very well for the future," he said.
He said the government's efforts to encourage domestic savings can take the savings to 37-40 per cent in near future.
