Answer: Fiscal discipline is an important aspect of economic governance that enables governments to maintain macroeconomic stability and ensure sustained economic growth. Governments adopt various measures to promote fiscal discipline and ensure that they meet their fiscal targets.

Measures adopted by the government:

• Public expenditure management: Effective public expenditure management is key to fiscal discipline, achieved through transparent budgeting, clear fiscal rules, and expenditure monitoring.
• For example, the FRBM Act, 2003, sets targets for the government to establish financial discipline, improve the management of public funds, strengthen fiscal prudence, and reduce its fiscal deficits.
• Debt management: Governments need to manage their debt levels to avoid default and maintain macroeconomic stability. This can be achieved by managing debt maturity, diversifying borrowing sources, and currency composition.
• For example, issuing G-Secs in foreign markets will enable governments to borrow at lower rates.
• Rationalization of subsidies: Government should rationalize subsidies to ensure that only the vulnerable sections get its benefits and not those who are ineligible.
• For example, Give it up campaign to encourage domestic LPG consumers, who can afford to pay the non-subsidized price for LPG, to voluntarily surrender their LPG subsidy.
• Procurement reforms: Government should move towards the Electronic Government Procurement (e-GP) system by strengthening the policy and regulatory framework to save public resources by discovering fair prices.
• For example, the Government has launched e-marketplace portal for this.
• Public financial management reforms: Reforms like expenditure frameworks, accounting changes, and financial management systems enhance transparency, accountability, and efficiency in public finances, improving fiscal discipline.

Fiscal discipline is crucial for India to achieve sustainable economic growth, maintain macroeconomic stability, and reduce vulnerabilities. The government has taken several measures to promote fiscal discipline, but there is still a need to establish a Fiscal Council to ensure greater transparency and accountability in fiscal policy. By doing so, India can improve its long-term fiscal sustainability and ensure that it has the fiscal space to respond to economic shocks.