The 13th finance commission, headed by former finance secretary Vijay Kelkar, would thrash out a roadmap for achieving fiscal deficit targets after considering off-budget subsidies such as oil, food and fertiliser bonds estimated at over Rs 1,00,000 crore in the budget.
“Having regard to the need to bring the liabilities of the central government on account of oil, food and fertiliser bonds into fiscal accounting and the impact of its various other obligations on the deficit targets, the commission may review the road map for fiscal adjustment,” information and broadcasting minister PR Dasmunsi said after a cabinet meeting that
approved the proposal.
Finance minister P Chidambaram in his budget speech had said that there was a need to bring off-budget liabilities into fiscal accounting.
The finance commission is a constitutional body set up every five years to make recommendations relating to the distribution of the net proceeds of taxes between the Union and the States.
Apart from the terms of reference specifically laid down in the Constitution, the finance commission will also suggest measures for maintaining a stable and sustainable fiscal environment consistent with equitable growth.
It will submit its report next year and work out the likely impact of the proposed implementation of Goods and Services Act (GST) with effect from April 1, 2010, including its impact on foreign trade.