The Fiscal Responsibility and Budget Management (FRBM) Bill was tabled in India’s parliament in 2000 by the Atal Bihari Vajpayee government to provide the legislative underpinning for the country’s fiscal discipline to be institutionalized. Following that, in 2003, the FRBM Act was enacted. It is a parliamentary act that establishes aims for the Government of India to promote financial discipline, enhance public fund management, strengthen fiscal prudence, and minimize fiscal drag or fiscal deficits.
It is a relevant topic for the UPSC 2021 and falls under the General Studies Paper 3 topic “Indian Economy and challenges relating to planning, mobilization of resources, growth, development, and employment.” Continue reading newspaper editorials and stories about this subject because it might come up in the IAS exam, either directly or indirectly. Candidates should take note of all the points and data they have on this subject properly organized because there is a plethora of knowledge on this subject.
On that note, let’s take a detailed overview of the act which will be useful for preparing Fiscal Responsibility and Budget Management Act UPSC notes.
On February 1, 2019, the interim budget for the 2019–20 fiscal year was unveiled before the parliament.
According to the most recent information, the following modifications have been made:
The major goal was to eliminate the revenue deficit and reduce the budgetary deficit.
The other important objectives include:
The act also aimed to provide the Central Bank with the necessary freedom for managing inflation in India.
The most recent FRBM Act target is as follows:
The government established the NK Singh committee in 2016 to evaluate the FRBM Act. The tasks at hand were to evaluate the FRBM Act’s effectiveness and make recommendations for changes to the act’s provisions. According to the committee’s recommendations, the government should aim for a fiscal deficit of 3% of GDP in the years leading up to March 31, 2020, then reduce it to 2.8 % in 2020–21 and 2.5 % by 2023.🔥20
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