New Delhi, Nov. 24: The burgeoning oil, fertilizer and food subsidies are fast threatening to send the government’s tight hold on fiscal deficit into a toss. The Fiscal Responsibility and Budget Management (FRBM) target is reported to receive a sever jolt this fiscal following the spurt in prices of crude oil, fertilisers and food items in the first nine months of this year.
Claiming this, the Planning Commission in its bac-kground note for the Economic Editors’ conference, has said, off-budget subsidy liabilities on oil, fertiliser and food would lead to a total fiscal deficit to the tune of 7.5 per cent of GDP this year against the budget target of 2.5 per cent only.
Sources quoting the plan panel note revealed that despite fiscal consolidation and massive buoyancy in the revenue receipts of the government, there is serious risk of going hugely off-mark in meeting FRBM target because of "growing off-budget liabilities on account of oil, fertiliser and food subsidies". "These liabilities could amount to five per cent of the GDP in 2008-09 over and above the budgeted Central fiscal deficit of 2.5 per cent," the sources said.
Meanwhile, the issue of bringing off-budget liabilities of the government on account of the select items into fiscal accounting has, however, been referred to the 13th Finance Commission.
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