Fiscal Responsibility : Not a Straitjacket

Even as evidence mounts of the government’s fiscal position in the current year slipping out of control, the fiscal responsibility bill has been in the news, thanks to the recommendations on the bill of parliament’s standing committee on finance. The government’s initial reaction to the committee’s recommendations was that they virtually dispensed with the notion of fiscal responsibility. This would appear to be a rather extreme view. The notable feature of the debate on fiscal responsibility has been the widespread appreciation that it has revealed of the importance of fiscal prudence. The government should build on this broad consensus rather than press for passage of the original bill without any modifications.