Some of the major components of India's fiscal sector reforms include expenditure reforms, tax reform measures, public sector restructuring and systematic reforms in the government's borrowing process.
The Union Budget for 2010-11 was widely anticipated to signal a return to fiscal consolidation, while also making some announcements on the much awaited structural reforms in areas like implementation of Goods and Services Tax (GST), Direct Tax Code (DTC), and other subsidies. The Budget subsequently announced a roadmap for fiscal consolidation, including reduction of government debt, timelines for implementation of DTC and GST, and partial rollback of Excise Duty.
The focus of expenditure remains on promoting growth and infrastructure development, with 46% of the allocations being devoted to infrastructure while revenue expenditure growth has been budgeted at 6% for 2009-10. The higher target of Rs.400 billion set for disinvestment proceeds creates fiscal space for the budgeted 30% growth in capital expenditure, including expenditure on roads, recapitalization of public sector banks to the extent of Rs.150 billion, and a considerable increase in the defense sectors.