he Kelkar Committee set up by the Government to suggest measures for fiscal consolidation has recommended phased elimination of subsidies.

The Committee report, which has been uploaded by the Union Finance Ministry on its website for informed debate, suggests elimination of subsidies in diesel, Kerosene, cooking gas, petrol and foodgrains supplied through ration shops to deal with the deteriorating fiscal situation.

Secretary in the Department of Economic Affairs Arvind Mayaram said in New Delhi that the Committee report was under consideration of the Government and it had not taken a view on it so far. He said some recommendations appeared contrary to the declared objective of the government.

AIR correspondent reports that Finance Minister P Chidambaram has constituted the panel to assist the Centre in formulating the path of fiscal consolidation. Headed by former finance secretary Vijay Kelkar, the Committee has submitted its report on September 3.

The report has suggested that half of diesel subsidy should be eliminated by March 2013 and the rest by fiscal 2014. It recommended that kerosene price should be raised by Rs 2 rupees per litre and subsidy on it needed to be reduced by one-third by fiscal 2015. It also suggested phased elimination of subsidy on LPG in the next four years.

The panel has also warned that High fiscal deficits tend to heighten inflation, reduce room for monetary policy stimulus, increase the risk of external sector imbalances and dampen private investment, growth and employment.

The Seventh G-20 summit concludes today with leaders of the top industrialised nations and emerging economies all set to agree on a coordinated Los Cabos Growth and Jobs Action Plan to prioritize boosting growth and job creation, hit hard by slowing global economy.

In its strongest signal in three years that it would act to strengthen the recovery, the G20 said in their draft communique that countries without heavy debts problems were ready to act together to spur growth, if the economy slows a lot more.

The draft communique urged Europe to take all necessary measures to safeguard the integrity and stability of the euro zone area.Among the commitments in a draft communique was a pledge to consider concrete steps towards a more integrated financial architecture in Europe that would include common banking supervision and firm guarantees to repay bank depositors.

At various sessions of the summit in Los Cabos, leaders from the G20 countries representing more than 80 percent of world output committing to additional money to the IMF to help countries struggling with debt.

India was the first country in the grouping to commit an additional 10 billion dollars to the IMF to promote adequate funds among creditors and prevent further economic crisis. At the summit , the BRICS grouping has pledged additional 73 billions to IMFto boost its reserves

Earlier addressing the plenary session of the summit, Prime Minister Dr Manmohan Singh the Prime Minister said the G 20 Summit needs to send a strong signal to the markets that the Eurozone countries will make every effort to protect the banking systems andglobal community will back a credible Eurozone effort and response.

Pointing out that less developed and developing countries were facing serious problems because ofthe global crisis, the Prime Minister said investment in infrastructure in developing countries will lay the foundation for rapid growth in the longer term besides providing an immediate stimulus for their economies.

On the slowdown in emerging economies including India, the Prime Minister said the government is taking steps to revive investor sentiment and determined to create an environment that would boost investor sentiment and promote an atmosphere conducive to enterprise and creativity

On the rising fiscal deficit in India, the Prime Minister said the fiscal deficit was allowed to expand after 2008 to impart a stimulus and the now the government is focusing on reversing the expansion. He said the government is determined to take some tough decisions including controlling subsidies to contain fiscal deficit.

The Centre today launched an austerity drive to contain expenditure in Government Departments. The Finance Ministry has asked all ministries and departments to reduce non-Plan expenditure by 10 per cent in the current financial year. It has banned creation of new posts in government departments, holding of meetings and conferences in five-star hotels, purchase of vehicles besides imposing curbs on foreign travel by the officials. The office memorandum on 'Expenditure Management -Economy Measures and Rationalisation of Expenditure' also said that holding of exhibitions, seminars and conferences abroad is strongly discouraged. It said, foreign visits should be so regulated as to ensure that each ministry remains within the allocated budget , after 10 per cent cut, for the same. Re-appropriation proposals on this would not be approved. The Ministry further said, no amount should be released to any entity, including state governments, which has defaulted in furnishing utilisation certificates for grants-in-aid released by the central government without prior approval of the Finance Ministry. The Finance Ministry's order further said that rush of expenditure on procurement should be avoided during the last quarter of the fiscal and, in particular, the last month of the year so as to ensure that all procedures are complied with and there is no infructuous or wasteful expenditure. The memorandum said, Secretaries of the ministries and departments will be fully charged with the responsibility of ensuring compliance of the measures. AIR correspondent reports, the austerity measures have been announced in the context of current fiscal situation where there is a tremendous pressure on government's resources. Finance Minister Pranab Mukherjee had earlier said in the Rajya Sabha that his Ministry would come out with austerity measures to check fiscal deficit. The government's fiscal deficit during 2011-12 was 5.7 per cent of the GDP. The Centre is aiming to bring it down to 5.1 per cent in the current fiscal. It is targeting to cut the subsidy bill to below 2 per cent of GDP this fiscal and 1.75 per cent in the subsequent years.