“Parliamentary illiteracy on fiscal issues is proverbial. So how does one overcome (and bring about) parliamentary literacy on this entire issue of macroeconomic stability and fiscal policies. In my six years (of being a Rajya Sabha member) I could not get the house to debate on India’s five-year plan and fiscal policy for even one hour,” Singh said during a discussion on his new book ‘Recalibrate: Changing Paradigms’.
Responding to a question of whether existing institutions are enough, Singh said there is a need to have fiscal institutions in place, particularly after the abolition of the Planning Commission.
Singh said he was the third Finance Commission chairman, after the 13th and 14th, to recommend a fiscal council. “And we were not outlier–54 countries in the world have set up independent fiscal councils,” he said. Singh chaired the 15th Finance Commission, which gave recommendations on centre-state devolution of funds and other measures for 2021-22 to 2025-26.
Singh said the issue is how to inculcate greater Parliamentary engagement on fiscal issues.
“This also is an area where the states are also involved since each state raises debt on the security of the consolidated fund of that state. What the world, for instance rating agencies, are interested in is not just the Centre’s debt, but that of the general government which is the Centre and the states,” he said.
He said states have enacted FRBM Acts, but the recommendation that they enact revised ones is still under consideration.
On former deputy RBI governor Rakesh Mohan’s suggestion that Parliament’s standing and select committees be filled with experts to fill this space, Singh said there has to be a mechanism whereby these panels need to recalibrate their functioning to address new challenges, such as interface with the new world of growing regulators.
“For instance, the Federal Reserve Chairman is routinely called to the Senate and the Congress, I do not recall any occasion, perhaps except one, when the RBI governor deposed before the parliamentary system, not just parliament. So you have to alter the interface between huge species of independent regulators that have come up of which the RBI governor is the principal regulator,” he said.
Singh’s new book, in which P K Mishra, principal secretary to the prime minister, has written select insights, again raised the issue of setting up a fiscal council.
Last month, Finance Minister Nirmala Sitharaman: “We have not had the GST Council having its full-fledged, well developed, it-is-all-settled-and-its-running kind of situation yet. After all, (it has) only (been) five years. But we again find N K Singh speaking on the need for the GST Council and the Finance Commission to have better coordination through another institution.” Sitharaman.