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The 15th budget consolidation panel of the Finance Committee will meet on Thursday

NEW DELHI : A committee reporting to the 15th Finance Committee will discuss Thursday the fiscal consolidation roadmap for central and state governments.

The commission under the chairmanship of NK Singh was mandated to develop the government’s fiscal consolidation roadmap for the period 2021-2022 to 2025-2026.

“This task has been complicated by the extraordinary situation caused by the spread of the pandemic and the concomitant fiscal constraints imposed on central and state governments,” said an official statement.

The central government has already increased the state borrowing limit by 2 percentage points of the GSDP (State Gross Domestic Product) from 3% which was already available.

The committee will make recommendations on the fiscal consolidation roadmap of central and state governments, taking into account their responsibility to meet appropriate levels of debt and deficit, while fostering higher inclusive growth, guided by the principles of equity, efficiency and transparency.

With this in mind, the 15th Finance Committee set up a panel on March 18 to review the roadmap for fiscal consolidation of public administrations.

“In order to take stock of emerging fiscal scenarios and chart the way forward, an online meeting of the said committee is scheduled for tomorrow,” the statement said.

The meeting is expected to be attended by NK Singh (chairman), Ajay Jha and Anoop Singh, members of the 15th Finance Commission, Chief Economic Advisor Krishnamurthy Subramanian, Comptroller General Soma Roy Burman, Rajat Kumar Mishra, Deputy Secretary at the Ministry of Finances.

In addition, S Krishnan, Additional Chief Secretary of the Government of Tamil Nadu, Anirudh Tiwari, Chief Secretary of Punjab and Sajjid Z Chinoy and Prachi Mishra, eminent analysts, will also participate in the meeting.

On May 17, the Center raised the state borrowing limit from 3 percent of the state’s gross domestic product (GDP) to 5 percent in 2020-2021, which will make an additional amount available. ??4.28 lakh crore.

However, part of the increase in the borrowing limit would be linked to specific reforms – the universalization of the One Nation One ration card, the ease of doing business, the distribution of electricity and the income of organizations. urban premises.

With that, a 0.5 percent increase in government borrowing, that is, from 3 to 3.5 percent, would be unconditional.

The next 1 percent, which can go up to 4.5 percent, will be released in 4 0.25 percent increments and each tranche will be linked to measurable and achievable reform.

The final 0.5 percent will be granted once milestones have been reached under at least three of the four reform conditions.

Currently, states have a net borrowing limit of ??6.41 lakh crore based on 3% of GSDP and various states have written to the Center to increase the borrowing limit to improve their resources during the COVID-19 crisis.

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