New Delhi: The Kelkar Committee on Friday recommended that the government cut subsidies in the three significant F's - food, fuel and fertiliser - in order to narrow down its fiscal deficit. The committee warned that India was on the edge of a 'fiscal precipice' and if measures were not taken soon, it would have a big impact on the Indian economy.
The government, however, refused to implement any of the panel's suggestions saying that certain subsidies were unavoidable. The Congress-led United Progressive Alliance (UPA) is already facing flak for its recent economic policy decisions allowing 51 per cent foreign direct investment in multi-brand retail, hike in diesel price and a cap on subsidised LPG cylinders.
The Kelkar report further said that the current deficit level of 5.1 per cent could balloon up to 6.1 per cent if no measures were taken, and that would hit the economy.
The final view on the recommendations of the committee, set up by Finance Minister P Chidambaram to suggest fiscal consolidation road map, will be taken by the government after receiving feedback from stake holders.
(With additional information from PTI)
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