Along with the budget, the Finance Minister also places other documents before the parliament which include “The Macro Economic Framework Statement” The aforesaid document is presented because this is mandated by

1. Long-standing parliamentary convention
2. Article 112 and Article 110(1) of the constitution of India
3. Article 113 of the Constitution of India
4. Provisions of the Fiscal Responsibility and Budget Management Act, 2003

Explanation

Option (d) is correct

• The fiscal Responsibility and Budget Management Act, 2003 (FRBM Act), aims to ensure a balance between Government revenue and government expenditure.
• The objectives of the act are:
  • Fiscal discipline.
  • Efficient management of expenditure, revenue and debt.
  • Macroeconomic stability.
  • Better coordination between fiscal and monetary policy.
  • Transparency in the fiscal operation of the Government.
• It set deficit targets for the Union and the States to control their deficits.
• The target and parameter changed along with amendments in 2012, 2012, 2015 and 2018.
• The documents that the government is required to present along with the budget as per FRBM Act are:
  • Macroeconomic Framework Statement: This statement provides an overview of the economy, including GDP growth, inflation, receipts and expenditure.
  • Medium-Term Fiscal Policy Statement: This statement sets out the government’s fiscal policy goals for the medium term.
  • Fiscal Policy Strategy Statement: This statement explains how the government plans for fiscal policy goals.
  • Medium-Term Expenditure Framework: This framework sets out the government’s spending plans for the medium term.

Answer: (d) Provisions of the Fiscal Responsibility and Budget Management Act, 2003; Difficulty Level: Medium