New Delhi, August 24:
India sees major financial constraints in this fiscal due to various welfare schemes, but stable macro-economic environment in areas like inflation and growth is reassuring, an official report said today.
â€œMajor fiscal challenges lie ahead in management of subsidies, finding resources for funding the food for work and employment guarantee programmes,â€ said minister of state for finance S S Palanimanickam.
â€œThese are likely to strain the fiscal situation in coming months,â€ said the quarterly review of the trends in receipts and expenditure in relation to the national budget at the end of the first quarter of 2005-06. But the review noted that the efforts at fiscal consolidation by improved tax administration and expenditure control, as well as neutralising the decline in receipts due to higher devolution to the states were continuing. â€œThe current favourable macro-economic environment of low inflation, low interest rates, and widespread growth momentum are providing an added impetus in the efforts.â€