Q. With reference to the Fiscal Responsibility and Budget Management (FRBM) Act, 2003, consider the following statements:
1.It mandates a fiscal deficit target of 3% of GDP by 2008-09, with provisions for annual reductions.
2.Amendments in 2018 introduced a medium-term debt sustainability framework, targeting central government debt at 40% of GDP.
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation:
Statement 1: Correct. The original Act aimed for fiscal discipline through phased deficit reduction to 3% within five years.
Statement 2: Correct. The 2018 amendments shifted focus to debt anchors, setting glide paths for both deficit and overall liabilities.
