WikiNow lets you discover the news you care about, follow the topics that matter to you and share your favourite stories with your friends.

© WikiNow

The constitution of Expenditure Management Commission was announced in the Budget Speech by Honorable Finance Minister of India Shri Arun Jaitley in the budget of 2014-15. The Commission will be a recommendation body with the primary responsibility of suggesting major expenditure reforms that will enable the government to reduce and manage its fiscal deficit at more sustainable levels.

The constitution of Expenditure Management Commission (EMC) was announced in the Budget Speech by Honorable Finance Minister of India Shri Arun Jaitley in the budget of 2014-15. The Commission will be a recommendation body with the primary responsibility of suggesting major expenditure reforms that will enable the government to reduce and manage its fiscal deficit at more sustainable levels.

EMC is a five-member body composed of the former Reserve Bank Of India (RBI) Governor Bimal Jalan, who has been appointed to Head the Commission, former Finance Secretary Sumit Bose, former Deputy RBI Governor Subir Gokarn and two other members.

Despite the legal mandate intended to lower the Fiscal Deficit to 3% within the stipulated time Fiscal Responsibility and Budgetary Management Act, 2003, India has witnessed a persistent high fiscal deficit. Subsidies, public services, underpricing and arbitrary natural resource allocation are government activities that have led to expenditures greater than revenue.

The commission is mandated to evaluate proposals for reducing the three major subsidies (i.e. food, fertilizer and oil).

The commission was to submit an interim report before the presentation of the Budget for 2015-16. The final report was to be submitted before the 2016-17 budget.