A government appointed committee to devise a roadmap for fiscal consolidation is likely to submit its report by next month and is expected to call for a new law and fresh targets for the deficit.

“The report is almost ready. It is likely to be submitted over the next few weeks,” said a senior government official.

The NK Singh-led committee to review the FRBM roadmap was set up by the Finance Ministry in May and was originally expected to submit its report by October 31. Its term was later extended to November 20. The five-member committee is likely to call for a new law to replace the Fiscal Responsibility and Budget Management Act, 2003 and will also suggest new goalposts for the Centre and States’ fiscal deficits.

“The FRBM Act is more than a decade old and the entire global economic situation has changed since then,” said the official, adding that the committee is also likely to suggest some flexibility in the targets in sync with the economy.

The suggestions of the committee are likely to be reflected in the Union Budget 2017-18. Officials said that a delay in the submission of the report will not have much of an impact as the Finance Ministry would still have close to two months to examine its recommendations.

The Ministry is also hopeful that a review of the fiscal consolidation roadmap will give more comfort to rating agencies and foreign investors that have been concerned over the government’s high debt burden. The committee had been asked “to examine the need and feasibility of aligning the fiscal expansion or contraction with credit contraction or expansion respectively in the economy”. It was also tasked with examining the need for a range based target for the fiscal deficit instead of the current practice of pegging it as a fixed percentage of the GDP.

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