Fiscal Council is an important institution needed to complement the rule-based fiscal policy in the country. Explain (200 Words)
Refer - The Hindu
Enrich the answer from other sources, if the question demands.
IAS Parliament 4 years
KEY POINTS
· The fiscal deficit of the Centre in 2019-20 as estimated by the Controller General of Accounts (CGA) was 4.6%, 0.8 percentage point higher than the revised estimate.
· The practice of repeated postponement of targets, timely non-settlement of bill payments and off Budget financing to show lower deficits has been common. The report of the Comptroller and Auditor General (CAG) of India in 2018 on the compliance of the Fiscal Responsibility and Budget Management (FRBM) Act for 2016-17, highlights various obfuscations done to keep the liabilities hidden.
· The FRBM Review Committee made a recommendation underlining the need for an independent review by the Finance Ministry appointing the Council.
· A Fiscal Council is an independent fiscal institution (IFI) with a mandate to promote stable and sustainable public finances. These institutions assist in calibrating sustainable fiscal policy by making an objective and scientific analysis.
· The OECD (2013) has documented the important principles needed for successful fiscal councils under nine broad heads and these are: local ownership; independence and non-partisanship; mandate; resources; relationship with legislature; access to information; transparency; communication and external evaluation.
· These principles are important, ensure autonomy, being unbiased, transparency, and effective and accountable Councils.
· In Belgium, the government is legally required to adopt the macroeconomic forecasts of the Federal Planning Bureau and this has significantly helped to reduce bias in these estimates.
· Fiscal Council is an important institution needed to complement the rule-based fiscal policy. Of course, it is not a ‘silver bullet’; if there is no political will, the institution would be less effective, and if there is political will, there is no need for such an institution.
· That is also true of the FRBM Act. While we cannot state that the FRBM Act has been an unqualified success, it has also not been an abject failure either.
· The counterfactual will show that things would have been much worse without it, and it has helped to raise the awareness of government, legislators and the public at large. Similarly, the Fiscal Council will help in improving comprehensiveness, transparency and accountability.
santhosh kumar 4 years
Pls review
IAS Parliament 4 years
Avoid writing generalized points, try to explain them, and underline the key points. Keep Writing.
K. V. A 4 years
Pls review
IAS Parliament 4 years
Good attempt. Keep Writing.
nandhini 4 years
kindly review my answer
IAS Parliament 4 years
Good attempt. Try to underline key points. Keep Writing.
Abhishek kumar 4 years
please give suggestion
IAS Parliament 4 years
Avoid putting dots in between the words, try to include about FRBM committee recommendation, and improve the presentation. Keep Writing.
