Unfolding solutions to creased issues..! Finance Commission meets RBI centering shift in composition of finances

News Bharati    08-May-2019
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Mumbai, May 8: Stressing at the need to set up State Finance Commission for the respective state governments, the 15th Finance Commission headed by Chairman N.K. Singh held a detailed discussion with the Governor and Deputy Governors of RBI at Mumbai today.

 
The conference, also headed by RBI Governor Das viewed at fiscal management requirements of the States along with the Public Sector Borrowing. It further made a detailed presentation to the Finance Commission on State Government Finances for the financial year underway.
 
Discussing the increased importance of states in the economy, the discourse reviewed the shift in composition of government finances. “Fiscal deficit of states is budgeted to be lower in 2019-20 Budget Estimates, but Revised Estimates and actuals deviate significantly reflecting poor fiscal marksmanship”, the statement reported.
 
The RBI made another presentation on the issues and challenges of market borrowings of state governments including major aspects like increasing orientation of state governments borrowing to markets, improving secondary market liquidity, cash management, risk asymmetry and disclosures.
 
Focussing at the issue of contingent liabilities, RBI said that there was a need for standardization in compilation and reporting under FRBM and to enforce uniform ceiling for issue of guarantees.
 
After fruitful conversation with RBI, the Finance Commission, ahead in its two day Mumbai meet is slated to have dialogue with banks, financial institutions and economists.