The government tabled both the Economic Survey and the 13th Finance Commission report in Parliament on Thursday. But it’s the UPA government’s acceptance of the recommendations of the 13th Finance Commission that could set the stage for future economic reforms. Among other things, the report lays down a roadmap for India’s fiscal deficit. It says the fiscal deficit should be brought down to5.7% on 2010-11 from the current figure of about 6.8%. And it’s recommending the fiscal deficit be cut down to 3% by 2013-14. The 13th Finance Commission’s report also calls for the revenue deficit to be eliminated by 2013-14 from today’s level of 4.8%.
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The report from the 13th Finance Commission has also argued for disinvestment in all public sector companies. It says this disinvestment could raise money equal to as much as 0.88% of GDP in the next five years. According to the report, the money raised from the stake sales should go into a consolidated fund that will provide money for critical projects.
And the finance ministry’s Economic Survey for 2009-10 struck an optimistic note on growth. It said India’s economy will grow at 8.25-8.75% in 2010-11 provided the global economy continues to recover and monsoons are normal. But the Economic Survey also urged a withdrawal from stimulus measures.