In the Budget Speech the Finance Minister Shri Pranab Mukherjee said the rollback of fiscal stimulus which was implemented over 2008-09 and 2009-10 to mitigate the impact of global financial crisis on economic slowdown in India will continue this year as well, to build economic resilience. He said a counter cyclical fiscal policy is required for insurance against external shocks and localized domestic factors. Aiming towards fiscal consolidation, the Government would introduce an amendment to the Fiscal Responsibility and Budget Management (FRBM) Act 2003 laying down the fiscal road map for the next five years.

The Finance Minister also proposed to introduce Public Debt Management Agency of India Bill in the next financial year. The States are required to amend or enact their FRBM Acts to confirm to a combined States’ debt target of 24.3 per cent of GDP to be reached latest by 2014-15.

Fiscal consolidation framework to continue rollback of stimulus, amend FRBM Act and establish debt management agency. Rollback of the fiscal stimulus will continue as part of a fiscal consolidation strategy, using a countercyclical approach. The central government intends to amend the Fiscal Responsibility and Budget Management Act to set a five year fiscal roadmap and to introduce a Public Debt Management Agency Bill to reform public debt management. States must amend or enact FRBM laws to align their debt positions with the combined States' debt objective and the national consolidation path.