Prime Minister Narendra Modi approved the constitution of an Expenditure Management Commission (EMC) that Finance Minister Arun Jaitley had announced in his Budget Speech in July. The Commission is expected to recommend major expenditure reforms that will enable the government to lower its fiscal deficit. Over time, a fiscal deficit in control will help the Government to strengthen the macro economy and ease inflation in the country.
The Commission will be mandated with the task of suggesting an overhaul for reducing the food, fertiliser and oil subsidies and other ways of controlling India’s fiscal deficit. It is expected to submit its interim report before the presentation of the 2015-16 Budget next February. The final report is expected before the Budget of 2016-17. The Government will shortly issue the terms of reference for the Commission.
Former Reserve Bank Governor Bimal Jalan will head the Commission. Members include former Finance Secretary Sumit Bose and former Reserve Bank Deputy Governor Subir Gokarn, according to an official release issued here.
The Atal Bihari Vajpayee Government had twice extended Dr. Jalan’s tenure as the Reserve Bank Governor in 2000 and then again in 2002.
Mr. Jaitley had said in his Budget speech: “my Government is committed to the principle of Minimum Government Maximum Governance.” He had said that the time had come to review the allocative and operational efficiencies of Government expenditure in order to achieve this goal and achieve maximum output. The EMC, he had said, will be set up with this purpose and to look into the various aspects of expenditure reforms to be undertaken by the Government.
The Budget estimated that the subsidy bill on food, petroleum and fertilisers would be Rs 2,51,397.25 crore for 2014-15 or 2.47 percent more than that in the previous fiscal.
