Manmohan worries over ballooning fiscal deficit

NEW DELHI, NOV 13: The rising fiscal deficit in the country is worrisome and could lead to bankruptcy, former Finance Minister Manmohan S...

NEW DELHI, NOV 13: The rising fiscal deficit in the country is worrisome and could lead to bankruptcy, former Finance Minister Manmohan Singh said here today.

"Fiscal situation is in dire straits, not only of Central, but also of the states. If the fiscal situation is not taken under control, the country could head towards a debt trap," Singh said at a seminar on `Governance’ organised by FICCI.

He said there is need for restructuring of government finances if the fiscal deficit is to be

controlled. In this connection, he said the government should control its non-Plan expenditure and subsidies. "If the government is not able to control the fiscal deficit, all the dreams of economic development will not be achieved," he said.

Singh also expressed concern over the lack of government initiative towards the tax reforms which was undertaken by him in the beginning of this decade. "Reforms in value-added tax (VAT) which was initiated by me have yet to be completed," he added. The former Finance Minister alsocalled for large scale involvement of PSUs in infrastructure development.