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What is the primary objective of the 'Fiscal Responsibility and Budget Management (FRBM) Act' in India?
To increase exports
To control fiscal deficit
To promote foreign investment
To reduce bank interest rates
To control fiscal deficit
The primary objective of the Fiscal Responsibility and Budget Management (FRBM) Act, enacted in 2003, is to institutionalize financial discipline, reduce India's fiscal deficit, and macroeconomic stability. It aims to eliminate revenue deficit and bring down fiscal deficit to manageable levels over a specified timeframe.
The primary objective of the Fiscal Responsibility and Budget Management (FRBM) Act, enacted in 2003, is to institutionalize financial discipline, reduce India's fiscal deficit, and macroeconomic stability. It aims to eliminate revenue deficit and bring down fiscal deficit to manageable levels over a specified timeframe.
The FRBM Act was enacted by the Parliament of India in 2003 under the leadership of then Finance Minister Yashwant Sinha, following the recommendations of the N.K. Singh Committee and Vijay Kelkar Task Force.
Enacted in the year 2003 to ensure fiscal discipline in India.
Targeted elimination of revenue deficit and a gradual reduction of fiscal deficit.
Mandates the central government to lay three policy statements before Parliament annually: Macroeconomic Framework Statement, Fiscal Policy Strategy Statement, and Medium-Term Fiscal Policy Statement.
Option A is incorrect because increasing exports is promoted via trade policies like Foreign Trade Policy, not the FRBM Act.
Option C is incorrect as foreign investment policies fall under FEMA and direct investment guidelines rather than fiscal deficit management.
Option D is incorrect since interest rates are regulated by the Reserve Bank of India (RBI) through monetary policy, whereas the FRBM Act governs fiscal policy.
B is correct тАФ The primary objective of the FRBM Act is to control fiscal deficit and ensure long-term macroeconomic stability.
In Indian Economy questions, always distinguish between Fiscal Policy (handled by the Ministry of Finance through budget and FRBM Act) and Monetary Policy (handled by the RBI through repo rate and CRR).
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