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What is the full form of FRBM? By 2003, the continuous government borrowing and the resultant debt had severely impacted the health of the Indian economy. The committee will also propose alterations for the time ahead. A country is just like a house; if the expenditure is too much and if there is no revenue to balance the high expenditure, the country will eventually fall into a debt trap, which may finally result in its collapse. A trusted mentor and pioneer in online training, Alex's guidance, strategies, study-materials, and mock-exams have helped thousands of aspirants to become IAS, IPS, and IFS officers. The minimum annual reduction target was 0.5% of GDP. This ratio was 70% in 2017. The FRBM is an act of the parliament that set targets for the Government of India to establish financial discipline, improve the management of public funds, strengthen fiscal prudence and reduce its fiscal deficits. This is because when there are high borrowings today, it should be repaid by the future generation. 35.6% increase in allocation for welfare of SCs, 28% for STs. The FRBM Act, enacted in 2003 by Parliament aims to reduce Indias fiscal deficit and improve macroeconomic management. UPSC: Latest News, IAS, IPS, UPSC Online Preparation, Last updated on August 29, 2020 by Alex Andrews George. The FRBM rules mandate four fiscal indicators to be projected in the medium-term fiscal policy statement. FRBM act UPSC On 1 February 2017, the finance minister offered the union budget in the parliament revealing that a committee would be started for the reconsideration of application of the Fiscal Responsibility and Budget Management Act (FRBM Act). The clause allows the govt to relax the fiscal deficit target for up to 50 basis points or 0.5 per cent. Revenue Deficit Target revenue deficit should be completely eliminated by March 31, 2018. The Fiscal Responsibility and Budget Management (FRBM) Bill was introduced in the parliament of India in the year 2000 by Atal Bihari Vajpayee Government for providing legal backing to the fiscal discipline to be institutionalized in the country. Disinvestment target of Rs. The global financial crisis (2007-08) led the government to infuse resources in the economy as the fiscal stimulus in 2008. frbm act - Budget 2018-19 has proposed amending the FRBM Act again, which will shift the target of 3% fiscal deficit-GDP ratio to end-March 2021.The FRBM Act is a fiscal sector legislation enacted by the government of India in 2003. In its report submitted in January 2017, titled, The Committee in its Responsible Growth: A Debt and Fiscal Framework for 21st Century India, the Committee suggested that a rule based fiscal policy by limiting government debt, fiscal The Committee suggested using debt as the primary target for fiscal policy. 90,000 Crore set for 2019-20 (Learn about, Difference Between Economics, Economy, Economic and Economical, Difference Between Economic Survey and the Union Budget, Difference Between Microeconomics and Macroeconomics, Important Economic Terms Related to Union Budget. Escape clause refers to the situation under which the central government can flexibly follow fiscal deficit target during special circumstances. Revenue Deficit, Primary Deficit, Effective Revenue Deficit. Total Debt to be reduced to 9% of the GDP (a target increased from the original 6% requirement in 200405). Fiscal Deficit Target fiscal deficit should be reduced to 2.5% of GDP by March 31, 2023. What is FRBM Act? 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