New Delhi: The Union Budget for 2004-05, which is being viewed as a "litmus test" for the Congress-led Government, may unveil the roadmap for wiping out revenue deficit well in advance by 2007 and a subsequent reduction in fiscal deficit to manageable limits.

The Finance Ministry, which has started the Budget making process, is expected to take valuable inputs from the committee on Fiscal Responsibility and Budget Management Act headed by Finance Minister's advisor Vijay Kelkar, official sources told reporters.

The Kelkar panel is expected to spell out far-reaching reform measures to reduce fiscal deficit by widening of tax-payers base through phasing out exemptions, extension of service tax to more services, rationalising excise and customs duty rates, reduction in transaction costs and improvement in tax administration.

The Kelkar panel may also suggest better ways of targeting of subsidies.

Finance Minister P Chidambaram is understood to be working out a timetable to hasten fiscal consolidation and reduce revenue deficit by 2006-07, which would be well in advance of the 2009-deadline set by the United Progressive Alliance in its Common Minimum Programme.

When revenue deficit is wiped out, the Centre's fiscal deficit would be manageable, sources said. While Fiscal Deficit is estimated at Rs 1,32,103 crore or 4.8 per cent of GDP in 2003-04, revenue deficit is slated to be Rs 99,860 crore or 3.6 per cent of GDP (Gross Domestic Product).