RS members for fiscal prudence

Expressing concern over rising market borrowings by the Centre and States, members in Rajya Sabha on Monday favoured fiscal prudence to cut non-plan expenditure and curtail fiscal deficit. Participating in a discussion on the Fiscal Responsibility and Budget Management Bill 2003, members, cutting across party lines, voiced concern over high interest liability and called for increased public spending in capital asset creation and infrastructure sector to create jobs.

Introducing the Bill, Finance Minister Jaswant Singh said sound fiscal management continues to be a concern due to high revenues of the Centre and its fiscal deficit, leading to increasing debt. He said the Centre’s total liability has reached Rs 18 lakh crore while interest outgo on this liability amounts to Rs 1.23 lakh crore. “This is neither tenable nor sustainable. We must work towards a regime of surplus,” Singh said. The Bill aims to reduce fiscal deficit and revenue deficit so as to eliminate revenue deficit by March 31, 2008.

Congress member Murli Deora said Rs 1.23 lakh crore interest outgo was more than 50 per cent of the country’s total earning.

Story continues below this ad

Lalit Bhai Mehta (BJP) said social and educational spending should not be limited and government should focus on creating capital assets. The Bill will create stability and accountability which is necessary in the present scenario, Mehta said. C. Ramachandraiah (TDP) said government was resorting to borrowings not for creating capital assets but for bridging revenue deficit.

K. Chandran Pillai (CPI-M) said government in fixing deficit targets was assuming the role of the future government which was undemocratic.