Press Information Bureau

Government of India

Ministry of Finance

28-September-2012 19:01 IST

On August 6, 2012, the Union Finance Minister Shri P.Chidambaram had made a statement on the economic situation and on the policy measures that were under consideration of the Government. Referring to the fiscal situation, the Finance Minister had said:

“We intend to unveil, shortly, a path of fiscal consolidation. I would like to make it clear  that the burden of fiscal correction must be shared, fairly and equitably, by different classes of stakeholders. The poor must be protected and others must bear their fair share of the burden. Obviously, adjustments must be made both on the revenue side and on the expenditure side. We have asked Dr. Vijay Kelkar, Dr. Indira Rajaraman and Dr. Sanjiv Misra to assist the Government in formulating the path of fiscal consolidation and we expect that the work will be completed in a few weeks.”

The aforesaid Kelkar Committee submitted its report on September 3, 2012.

The Committee has reached certain conclusions and has made a number of recommendations.

The main conclusion of the report is that “We cannot over-emphasize the need and the urgency of fiscal consolidation.”

The report is under consideration of the Government and the Government has not yet taken a view on the report or on any of the recommendations.

The Secretary, Department of Economic Affairs, Shri Arvind Mayaram said that some recommendations appear contrary to the declared objective of the Government of ‘sustained and inclusive growth’. He said that the Government is of the view that in a developing country where a significant proportion of the population is poor, a certain level of subsidies is necessary and unavoidable, and measures must be taken to protect the poor and vulnerable sections of the society. It is in this view that the Government has reiterated its intention to implement the promise of food security for all, he added. The Secretary Shri Mayaram further said while taking a final view on the various recommendations of the report, the Government will bear in mind that the goal is to achieve high growth, inclusive development, and economic and social justice for all.

The Secretary, Department of Economic Affairs, Shri Arvind  Mayaram said that the Government welcomes an informed debate on the report submitted by the Kelkar Committee. Hence, this report is being uploaded on the website of the Ministry of Finance at www.finmin.nic.in, he informed. Shri Mayaram said that the Government invites all sections of the people to send their comments to the email address: [email protected].

DSM/RS/ka

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Fiscal consolidation: Kelkar report uploaded and opened for public comment while protecting social safety nets. The document announces publication of the Kelkar Committee report and invites public comments after uploading it to the Ministry of Finance website. The Committee stresses the urgency of fiscal consolidation with reforms on revenue and expenditure, but the Government has not adopted any recommendations. The Government emphasises that decisions will balance fiscal correction with sustained, inclusive growth and protection for the poor, noting some recommendations may conflict with social protection and food security commitments.