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SSC CHSL 2025 PYQ — Question 98

SSC CHSL - 18 Nov 2025 - Shift 2 • General Awareness • Q98

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As per the Fiscal Responsibility and Budget Management Act-2003, the actual deficits may exceed the targets only on which of the following ground?
I. National security
II. National calamity

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Correct answer: C

Explanation

The correct answer is Option 3: Both I and II.

  • Explanation:
  • Under the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, it is mandatory for the government to keep the fiscal deficit within a specified limit. However, the Act includes a provision for an 'Escape Clause,' which permits the government to exceed the prescribed target deficit under special circumstances.
  • According to the Act, the actual deficit may exceed the target on the following grounds:
  • National Security: In the event of war or grave threats related to security.
  • National Calamity: During severe droughts, earthquakes, or other natural disasters.
  • Decline in Agriculture: If there is an unexpected shortfall in agricultural production.
  • Structural Reforms in the Economy: During major economic reforms (such as the implementation of GST).
  • Therefore, both National Security and National Calamity constitute valid grounds.

Key Points Related to the FRBM Act (Quick Revision):

  • Objective: To ensure fiscal discipline, reduce government debt, and bring the fiscal deficit down to 3% of GDP in the long run.
  • N.K. Singh Committee (2016): This committee reviewed the FRBM Act and recommended making the fiscal deficit targets more flexible.
  • Transparency: Under this Act, the government is required to present three documents to Parliament:
  • Medium-term Fiscal Policy Statement.
  • Fiscal Policy Strategy Statement.
  • Macro-economic Framework Statement.

Important Questions for Upcoming Examinations:
Question: In which year was the FRBM Act passed?
Answer: 2003.
Question: On the recommendation of which committee were changes to the FRBM Act's targets suggested?
Answer: N.K. Singh Committee.
Question: What is meant by 'Fiscal Deficit'? Answer: The difference between the government's total expenditure and its total receipts, excluding borrowings.