Minister for Finance and Ladakh Affairs, Abdul Rahim Rather Sunday allayed the apprehensions of many legislative members that the State has plunged into a debt trap and the fiscal deficit of the State is on rise.
Replying to the supplementary on a question regarding fiscal deficit raised by Sofi Abdul Gaffar in the House, the Minister said fiscal deficit of the State is on continuous decline and as per the targeted 4.2%, it stood at 3.37% for the previous year. Similarly, he said, the debt percentage of GSDP for the State stood at 49.67%, well below the target of 53.6% for 2012-13. He said the targets are fixed as per the provisions of Financial Regulation and Budget Management Act.
Replying to the main question, the Minister said that the State has performed well and has been achieving the financial targets from 2010-11 onwards. He said the Government has initiated a number of measures to institutionalize the path of fiscal correction and consolidation. He said measures like rationalization of tax structure, introduction of new pension scheme, stipendiary mode of recruitment, VAT reforms, etc have been taken to streamline fiscal management.
The Minister said that on the recommendation of 12th and 13th Finance Commissions, the State passed the Financial Regulation and Budget Management Act in 2009 which determines the targets for fiscal deficit and other budgetary provisions.