UPSC Prelims PYQ 2006: FRBM Act concerns fiscal and revenue deficit

Which one of the following statements is correct regarding the Fiscal Responsibility and Budget Management Act (FRBM Act)?

1. It concerns fiscal deficit only
2. It concerns revenue deficit only
3. It concerns both fiscal and revenue deficit
4. It concerns neither fiscal deficit nor revenue deficit

Explanation

Option (c) is correct

• The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 is a landmark Indian legislation aimed at institutionalizing financial discipline, reducing the fiscal deficit, eliminating the revenue deficit, and managing public debt. It compels the government to adopt transparent budgetary practices to ensure long-term macroeconomic stability and inter-generational equity.

Answer: (c) It concerns both fiscal and revenue deficit