“Adjustments must be made both on the revenue side and on the expenditure side. Vijay Kelkar, Indira Rajaraman and Sanjiv Misra to assist the government in formulating the path of fiscal consolidation .Both Misra and Rajaraman had been members of the 13th Finance Commission, which was headed by Kelkar.
The Centre’s fiscal deficit has ballooned to 5.76 per cent of GDP in the last fiscal on account of high fuel subsidy outgo. The government has not been able to decontrol diesel prices even after taking in-principle decision.
For the April-June period, the fiscal deficit rose to Rs 1.9 lakh crore, or 37.1 per cent of the 2012-13 target. The Centre hopes to bring down the deficit to 5.1 per cent of GDP in the current fiscal but the task seems difficult in view of rising oil, food and fertiliser subsidy bills.