Recent Amendments to FRBM Act

The following are the sub topics without any description for Recent Amendments to FRBM Act:

Fiscal Responsibility and Budget Management (FRBM) Act, 2003
Amendments to FRBM Act, 2012
Amendments to FRBM Act, 2017
Amendments to FRBM Act, 2019
Amendments to FRBM Act, 2021

The FRBM Act was enacted in 2003 with the objective of ensuring fiscal discipline and macroeconomic stability. The Act sets out a medium-term fiscal framework for the government and limits the Fiscal Deficit and the Public Debt. The Act has been amended several times since its enactment, most recently in 2021. The amendments to the FRBM Act have been aimed at strengthening the fiscal framework and improving the government’s fiscal management.

The following are the key provisions of the FRBM Act:

The government shall ensure that the fiscal deficit does not exceed 3% of GDP.
The government shall ensure that the public debt does not exceed 60% of GDP.
The government shall present a medium-term fiscal framework in the annual budget.
The government shall set up a Fiscal Responsibility Council to monitor the implementation of the FRBM Act.

The FRBM Act has been successful in achieving its objectives of ensuring fiscal discipline and macroeconomic stability. The fiscal deficit and the public debt have been brought under control, and the economy has been growing at a healthy rate. However, there are some challenges that need to be addressed in order to further strengthen the fiscal framework. These challenges include the need to improve the government’s revenue collection and expenditure management, and the need to address the issue of contingent liabilities.
The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 was enacted with the objective of ensuring fiscal discipline and macroeconomic stability. The Act sets out a medium-term fiscal framework for the government and limits the fiscal deficit and the public debt. The Act has been amended several times since its enactment, most recently in 2021. The amendments to the FRBM Act have been aimed at strengthening the fiscal framework and improving the government’s fiscal management.

The key provisions of the FRBM Act are as follows:

The government shall ensure that the fiscal deficit does not exceed 3% of GDP.
The government shall ensure that the public debt does not exceed 60% of GDP.
The government shall present a medium-term fiscal framework in the annual budget.
The government shall set up a Fiscal Responsibility Council to monitor the implementation of the FRBM Act.

The government has taken some steps to address these challenges. For example, the government has increased the tax rates and introduced new taxes. The government has also taken steps to improve expenditure management. For example, the government has introduced the Public Expenditure Management System (PEMS) to improve the efficiency of government spending.

However, more needs to be done to address the challenges facing the fiscal framework. The government needs to continue to improve its revenue collection and expenditure management. The government also needs to address the issue of contingent liabilities. Contingent liabilities are liabilities that the government may have to pay in the future, but which are not currently recorded in the government’s accounts. These liabilities can arise from a variety of sources, such as guarantees, insurance contracts, and pension obligations.

The government needs to take steps to estimate and disclose its contingent liabilities. The government also needs to develop a plan to manage its contingent liabilities. This plan should include measures to reduce the government’s exposure to contingent liabilities, and to ensure that the government is able to meet its obligations when they arise.

The government’s fiscal framework is important for ensuring macroeconomic stability and economic growth. The government needs to continue to take steps to strengthen the fiscal framework and address the challenges facing it.
Fiscal Responsibility and Budget Management (FRBM) Act, 2003

Amendments to FRBM Act, 2012

The FRBM Act was amended in 2012 to allow for a higher fiscal deficit target of 3.5% of GDP for the year 2012-13. The amendment was made in view of the economic slowdown and the need to provide Fiscal Stimulus.

Amendments to FRBM Act, 2017

The FRBM Act was amended again in 2017 to allow for a higher fiscal deficit target of 3.3% of GDP for the year 2017-18. The amendment was made in view of the implementation of the Goods and Services Tax (GST) and the need to provide fiscal stimulus.

Amendments to FRBM Act, 2019

The FRBM Act was amended again in 2019 to allow for a higher fiscal deficit target of 3.4% of GDP for the year 2019-20. The amendment was made in view of the economic slowdown and the need to provide fiscal stimulus.

Amendments to FRBM Act, 2021

The FRBM Act was amended again in 2021 to allow for a higher fiscal deficit target of 6.8% of GDP for the year 2020-21. The amendment was made in view of the COVID-19 pandemic and the need to provide fiscal stimulus.

Frequently Asked Questions

What is the FRBM Act?

The FRBM Act is a law that was enacted in 2003 with the objective of ensuring fiscal discipline and macroeconomic stability. The Act sets out a medium-term fiscal framework for the government and limits the fiscal deficit and the public debt.

What are the key provisions of the FRBM Act?

The key provisions of the FRBM Act are as follows:

The government shall ensure that the fiscal deficit does not exceed 3% of GDP.
The government shall ensure that the public debt does not exceed 60% of GDP.
The government shall present a medium-term fiscal framework in the annual budget.
The government shall set up a Fiscal Responsibility Council to monitor the implementation of the FRBM Act.

What are the challenges that need to be addressed in order to further strengthen the fiscal framework?

The challenges that need to be addressed in order to further strengthen the fiscal framework include the need to improve the government’s revenue collection and expenditure management, and the need to address the issue of contingent liabilities.

What is the impact of the FRBM Act on the Indian economy?

The FRBM Act has had a positive impact on the Indian economy. The fiscal deficit and the public debt have been brought under control, and the economy has been growing at a healthy rate. However, there are some challenges that need to be addressed in order to further strengthen the fiscal framework.
Question 1

The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in:

(A) 2003
(B) 2012
(CC) 2017
(D) 2019
(E) 2021

Answer
(A)

Question 2

The FRBM Act sets out a medium-term fiscal framework for the government and limits the:

(A) fiscal deficit
(B) public debt
(C) both fiscal deficit and public debt
(D) neither fiscal deficit nor public debt

Answer
(C)

Question 3

The FRBM Act has been amended several times since its enactment, most recently in:

(A) 2003
(B) 2012
(C) 2017
(D) 2019
(E) 2021

Answer
(E)

Question 4

The amendments to the FRBM Act have been aimed at:

(A) strengthening the fiscal framework
(B) improving the government’s fiscal management
(C) both strengthening the fiscal framework and improving the government’s fiscal management
(D) neither strengthening the fiscal framework nor improving the government’s fiscal management

Answer
(C)

Question 5

The following are the key provisions of the FRBM Act:

(A) The government shall ensure that the fiscal deficit does not exceed 3% of GDP.
(B) The government shall ensure that the public debt does not exceed 60% of GDP.
(C) The government shall present a medium-term fiscal framework in the annual budget.
(D) The government shall set up a Fiscal Responsibility Council to monitor the implementation of the FRBM Act.
(E) All of the above

Answer
(E)

Question 6

The FRBM Act has been successful in achieving its objectives of ensuring fiscal discipline and macroeconomic stability.

(A) True
(B) False

Answer
(A)

Question 7

There are some challenges that need to be addressed in order to further strengthen the fiscal framework. These challenges include the need to improve the government’s revenue collection and expenditure management, and the need to address the issue of contingent liabilities.

(A) True
(B) False

Answer
(A)