Budget 2010 to reflect finance panel suggestions: FM

Budget 2010 to reflect finance panel suggestions: FM

New Delhi: India’s 2010 budget will factor in suggestions made by a panelon various fiscal measures including sharing of tax revenues between theUnion government and states in the five-year period ending March 2015.

The finance ministry said in a statement the government would first table the report of the 13th Finance Commission in Parliament in due course.

The panel’s chairman, Vijay Kelkar, did not elaborate on the details of the report after he submitted it to the President.

“The recommendations (of the panel) will be reflected in the Budget," finance minister Pranab Mukherjee told reporters, but did not give details.

Apart from suggesting a formula for sharing tax revenues, the finance panel was asked to look into the impact of the proposed Goods and Services Tax scheduled to be introduced in April 2010.

The panel was also asked to study the impact of including bonds issued to oil and fertiliser firms, and Food Corp of India in the Union budget. Such bonds are now kept off-balance sheet, and are not counted as part of government expenditure.

It also looked into the need for ensuring the commercial viability of irrigation projects, power projects, state-run firms through various means including levy of user charges.

It also recommended ways of managing ecology, environment and climate change consistent with sustainable development.

The finance minister said India needs to strike a balance between economic growth and cutting fiscal deficit.

India’s fiscal deficit is estimated at 6.8% of gross domestic product for 2009-10 (April-March), higher than 6.2% in the previous year as the government cut tax rates and boosted spending.

The economy grew 6.7% in 2008-09, slower than 9% or more in the previous three years.