The proposal for a fiscal policy council has gained currency after the Fiscal Responsibility and Budget Management (FRBM) Committee recently recommended it, though not unanimously, as an autonomous body under the finance ministry. The 14th Finance Commission had also recommended the council, but the government did not implement it, and rightly so. I am writing to say that such a council will not only be superfluous but also pernicious. The proposal has no merit.
The FRBM panel wants the council to be tasked with the monitoring of the government’s fiscal announcements for any year, providing its own forecasts and analysis, and to advise the ministry. It has said there will be three set of functions — empirical, analytical and advisory. The idea is to create an institution that works with the government to deliver better fiscal outcomes and makes the analytical basis for fiscal decisions clear.
via Proposed fiscal council superfluous, pernicious | Business Standard Column
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