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Govt should issue white paper on medium-term fiscal framework: EAC-PM member
Jul-23-2019

The Economic Advisory Council to The Prime Minister’s (EAC-PM) member Rathin Roy has said the government should issue a white paper on its medium-term targets in the backdrop of a shortfall in tax revenue targets. He said it would be difficult to meet the budgetary tax collection target for current financial year (FY20).

He further said that according to the Budget document, the government aims to collect $370 billion as taxes in the current fiscal. He said ‘in my professional judgment, you will not able to tax as much as has been forecast in FY20 Budget. Therefore either you will have to borrow more or you will have to spend less.  He added ‘If you borrow more then it has implications for the overall economy, or you spend less then it also have implications.’

Besides, he also expressed his reservations over the government's decision to start raising a part of its gross borrowing programme from external markets in foreign currencies. Talking about government’s decision to go for overseas sovereign borrowing, he said that he thinks there are serious issues regarding loss of sovereignty. He mentioned ‘I don't simple argument that something which is cheaper is a good one. I pay very careful attention to the former RBI Governor Y V Reddy's opinion that these are sovereign liabilities to perpetuity’.

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