Q. Fiscal Responsibility and Budget Management Act (FRBMA) was passed to keep a check on which of the following?
1. Fiscal deficit
2. Revenue deficit
Select the correct answer using the codes given below:
Answer: C
Notes:
Fiscal Responsibility and Budget Management Act (FRBMA)
The FRBM Act 2003 in its amended form was passed by the government to bring fiscal discipline and to implement a prudent fiscal policy High fiscal deficit was the one major macroeconomic problem faced by the Indian economy around 2000 It was argued that high deficits lead to inflation, reduces consumption, result in a crowding out of the private sector investment, rising unemployment and falling living standards of the people Thus arose a need to institutionalize a new fiscal discipline framework
Source: Ramesh Singh
