External shocks could throw budget estimates out of gear: FM

By Staff
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Google Oneindia News

New Delhi, June 10 (UNI) Finance Minister P Chidambaram today highlighted the threat of exogenous shocks to Budget estimates, saying that hardening of interest rates worldwide and the relentless rise of global crude prices could put these out of gear.

"The hardening of interest rates worldwide could have an impact on Budget estimates, because more money would need to be provided during the course of the year for meeting interest payments", Mr Chidambaram said in his address to the meeting of Finance Ministers of G-8, being being held at St Petersuburg.

A copy of the Finance Minister's speech at the Breakfast meeting was made available here.

The session in which Mr Chidambaram spoke had two items on the agenda-- key issues in good governance and public finance and the role of emerging donors in the global development community.

Mr Chidambaram said the Indian Government has taken a number of initiatives to ensure sound governance of the management of public finances.

"The Fiscal Responsibility and Budget Management Act obliges the Central Government to wipe out the revenue deficit by 2008-09 and limit the fiscal deficit to 3 per cent by 2008-09. India is also a subscriber to the Special Data Dissemination Standards (SDSS), prescribed by the International Monetary Fund (IMF)", he said.

The Finance Minister said an IMF Mission, which made an assessment of the Indian economy in 2001, found that there was high degree of compliance to the IMF Code on Fiscal Transparency.

Besides, the Indian Finance Minister is obliged to place before Parliament the Quarterly Reports on the Fiscal and Economic Situation.

The other initiative is pertaining to good goverance relating to the enactment of the Right to Information Act enabling any citizen to call upon the Government to make available information on any subject.

Another key initiative in this regard is the 'Outcome Budget,' and said it was a powerful institutional mechanism to focus attention on the goals or targets to be achieved by spending the money allocated to the respective Departments.

"By putting crucial data and information on expected outcomes in the public domain, there will be more informed public scrutiny that could help ensure better value for money." UNI GS MP KN1837

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