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Saturday, March 18

TNPSC Indian Economy Study Materials - FRBM Act - Fiscal Responsibility and Budget Management Act, 2003

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TNPSC Indian Economy Study Materials - FRBM Act - Fiscal Responsibility and Budget Management Act, 2003

TNPSC Guru - This FRBM act can be asked in TNPSC Group 1 Mains

FRBM Act
FRBM enacted in 2003, to ensure fiscal discipline and to reduce fiscal deficit by moving towards a balanced budget.
Received President's Assent - August 26, 2003
Came to an effect from - June 5, 2004
Chairman of the review committee of the FRBM Act - N K Singh 
Rules / Features of the Act 2003.
  • Revenue Deficit
    • Eliminated by - March 31, 2009
    • Minimum Annual reduction - 0.5% of GDP in each financial year
  • Fiscal Deficit
    • Minimum Annual reduction - 0.3% of GDP in each financial year
    • To reach 3% of fiscal deficit by - 2008-2009 Financial year 
  • Debt
    • Minimum Annual reduction - 1% of GDP in each financial year
    • To reach total debt within - 6% by 2007-2008
  • Finance minister to review the trends in receipts and expenditure quarterly.
  • RBI not to subscibe the government bond from - April 1, 2006 
  • Four indicators to be projected in the medium term fiscal policy statement
    1. Revenue Deficit as a % of GDP.
    2. Fiscal Deficit as a % of GDP
    3. Tax Revenue as a % of GDP
    4. Total outstanding liabilities as a % of GDP


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