Finance Commission chairman cautions against fiscal slippage; says will impact macroeconomic stability

New Delhi: Finance Commission Chairman N K Singh on Saturday sounded a note of caution against fiscal slippage, saying it would adversely impact the country’s macroeconomic stability as well as investment climate.

The remarks come in the backdrop of several states, including Madhya Pradesh and Rajasthan, which witnessed a change of government, announcing farm loan waivers.

Singh expressed apprehension that some states are not according priority to fiscal discipline, which was not the case earlier.

He also emphasised on strengthening the Centre-state relationship through institutional mechanisms.

Addressing the ‘Skoch Summit’ in New Delhi, he said the government should look at ways to further accelerate the reforms process pertaining to the factors of production—labour, land, capital.

Speaking at the event, Bibek Debroy, Chairman, Economic Advisory Council to the Prime Minister, said there is a need to re-examine all institutional structures to push the country’s growth.

He said India’s per capita income is approaching the $2,000 mark and it would increase further, but there will still be challenges.

“Yes, India’s per capita income will go up, yes India will be transformed by 2030 or 2040, but all said and done India will still remain relatively poor,” he said.