The FRBM (Fiscal Responsibility and Budget Management Act) rules mandate how many fiscal indicators to be projected in the medium-term fiscal policy statement?
Understanding the FRBM Act and Fiscal Indicators
The Fiscal Responsibility and Budget Management (FRBM) Act is a crucial piece of legislation in India aimed at bringing fiscal discipline. Its primary goal is to ensure responsible fiscal management and reduce the government's fiscal deficit.
The Act requires the government to present certain documents to Parliament to explain its fiscal policy. One such important document is the 'Medium-term Fiscal Policy Statement'. This statement outlines the government's fiscal targets and projections over a medium-term horizon.
Mandated Fiscal Indicators in the Medium-Term Fiscal Policy Statement
As per the FRBM Act rules, the Medium-term Fiscal Policy Statement is required to project specific fiscal indicators. The number of key fiscal indicators mandated for projection in this statement is four.
These key fiscal indicators are essential for assessing the government's fiscal health and its commitment to fiscal consolidation. They provide a clear picture of the financial performance and targets.
The four mandated fiscal indicators typically include:
- Revenue Deficit
- Effective Revenue Deficit
- Fiscal Deficit
- Primary Deficit
Projecting these indicators helps in evaluating the government's fiscal performance against the set targets and ensures transparency in fiscal management.
Important Questions from Money and Banking
Which one of the following is likely to be the most inflationary in its effects?
Which one of the following effects of creation of black money in India has been the main cause of worry to the Government of India?
Consider the following statements :
The effect of devaluation of a currency is that it necessarily
1. improves the competitiveness of the domestic exports in the foreign markets
2. increase the foreign value of domestic currency
3. improves the trade balance
Which of the above statements is/are correct?
Indian Government Bond Yields are influenced by which of the following?
1. Actions of the United States Federal Reserve
2. Actions of the Reserve Bank of India
3. Inflation and short-term interest rates
Select the correct answer using the code given below.
With reference to “Urban Cooperative Banks" in India, consider the following statements :
1. They are supervised and regulated by local boards set up by the State Governments.
2. They can issue equity shares and preference shares.
3. They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966
Which of the statements given above is/are correct?
