What is Fiscal Responsibility and Budget Management (FRBM Act) ?

What is Fiscal Responsibility and Budget Management (FRBM Act) ?

Understanding FRBM act The Fiscal Responsibility and Budget Management (FRBM) Act was enacted by the Parliament in 2003. Its objective is to provide a mechanism to ensure fiscal discipline, reduce fiscal deficit and improve macro economic management. This law aims at ensuring  fiscal stability for the country on a long-term basis. The FRBM act stresses importance on a transparent fiscal management system for the government.It promotes a more equitable distribution of debts thus reaching a situation of controlled or zero debt over the years. This law also gives flexibility to the Reserve Bank of India to undertake monetary policy to control inflation. Government needs…

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Fiscal Consolidation Initiatives in India

Fiscal Consolidation Initiatives in India

What is fiscal deficit ? It is total expenditure minus total revenue plus non debt creating capital assets.Thus it is nothing but the borrowings. Every government strives to contain the fiscal deficit as it brings out a picture of how strong are the macroeconomic fundamentals of the economy of the country.The government of India has enacted Fiscal Responsibility and Budget management act.This act sets out the targets to be achieved by government for containing Fiscal and revenue deficit. The government is required to run programmes and policies like MGNREGA for the…

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