ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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FRBM Act and Eleventh Plan Approach Paper

This article argues that the time phasing problem highlighted in the approach paper to the Eleventh Plan is the outcome of specific assumptions used in the projections, which are not always justified. Following the fiscal correction path releases resources for the revenue plan through falling interest payments and increases capital expenditure by allowing the permissible fiscal deficit to be fully used for that purpose. It gives the required balance in resources available for the revenue plan and capital plan. The profiles of saving and investment make a growth rate of 8.5 to 9 per cent achievable within the plan period. These would be possible by adhering to the fiscal responsibility targets and not by compromising on them.

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