Fiscal Responsibility and Budget Management (FRBM) Committee

 Introduction 

• The Government had constituted a Committee in May, 2016 to review the Fiscal Responsibility and Budget Management (FRBM) Act under the Chairmanship of Shri N.K. Singh, former Revenue and Expenditure Secretary and former Member of Parliament. 

Term of Reference 

• To comprehensively review the existing FRBM Act in the light of contemporary changes, past outcomes, global economic developments, best international practices and to recommend the future fiscal framework and roadmap for the country. 

• It was also tasked to examine the need and feasibility of having a ‘fiscal deficit range’ as the target in place of the existing fixed numbers (percentage of GDP) as fiscal deficit target. 

• Subsequently, the Terms of Reference were enlarged to seek the Committee’s views on certain recommendations of the Fourteenth Finance Commission and the Expenditure Management Commission. These primarily related to strengthening the institutional framework on fiscal matters as well as certain issues connected with new capital expenditures in the budget. 

Recommendations 

• The N K Singh-headed panel submitted its four-volume report on modifying the 13-year old Fiscal Responsibility and Budget Management (FRBM). 

• The first volume of the report addresses the issue of the fiscal policy, fiscal roadmap, international experience and recommendations therein. 

• The second volume refers to international experience especially from a lot of international organisations particularly OECD, the World Bank, ILO.
  
• The third volume deals with Centre-State issues. The fourth volume deals with views of domain experts both from national and international appropriate for fiscal policy.
  
• Volume four incorporates paper by lot of experts both national and international. It deals with their own views — what they believe the appropriate fiscal policy would be