In India, how many policy statements are mandated by the Fiscal responsibility and budget management act along with the budget?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is Option 2: Three.
Explanation:
- Under the Fiscal Responsibility and Budget Management Act, 2003 (FRBM Act) in India, it is mandatory for the government to present three (3) policy statements to both Houses of Parliament along with the Budget.
- The three mandatory statements are as follows:
- Medium-term Fiscal Policy Statement: This sets targets for fiscal indicators (such as deficits and debt) for the next three years.
- Fiscal Policy Strategy Statement: This statement outlines the government's priorities and fiscal policy objectives for the current year.
- Macro-economic Framework Statement: This details the current state of the economy and provides future projections regarding GDP growth rates, inflation, etc.
Key Facts about the FRBM Act:
- Objective: To reduce the fiscal deficit, instill discipline in government expenditure, and ensure inter-generational equity.
- Key Target: Initially, its objective was to bring the fiscal deficit down to 3% of the Gross Domestic Product (GDP).
- Amendments: Significant amendments were made to this Act in 2012 and 2015, and the N.K. Singh Committee (2016) provided new recommendations regarding it.
Important Questions for Upcoming Examinations:
Question: In which year was the FRBM Act passed?
Answer: 2003.
Question: Who was the Chairman of the committee constituted to review the FRBM Act?
Answer: N.K. Singh.
Question: Which statement presented along with the Budget provides projections regarding the GDP growth rate?
Answer: Macro-economic Framework Statement.