Describing the Union Budget for 2017-18 as “a fairly routine Budget”, former RBI governor C Rangarajan on Wednesday said changing the road map to reach the fiscal deficit target of 3% over the year will make a mockery of the Fiscal Responsibility and Budget Management (FRBM) Act.
“It was a fairly routine Budget... in the sense that there have not been much changes on the revenue side. Nevertheless, I am happy that the fiscal deficit is maintained at 3.2%. The original road map has set it at 3%,” Rangarajan told CNBC TV18.
“But given the need for expenditure, I suppose some modification on that is okay. I must emphasise the point that changing the road map for reaching the 3 per cent fiscal deficit target over the years will make a mockery of the FRBM Act.”
Finance minister Arun Jaitley has proposed bringing down fiscal deficit to 3.2% of GDP in 2017-18 from 3.5% in 2016-17.
“... I have pegged fiscal deficit at 3.2% in 2017-18 and remain committed to achieve 3 % in the following year. With this gradual approach, I have ensured adherence to fiscal consolidation without compromising requirements of public expenditure,” Jaitley said in his Budget speech.
Revenue deficit will be reduced to 2.1 % in 2017-18, from 2.3 % in 2016-17, the finance minister said.
Net market borrowing will be Rs 3.48 lakh crore in 2017-18, from 4.1 % in the current fiscal, he said.