FM Arun Jaitley has proposed acceptance of key recommendations of the Fiscal Reform and Budget Management Committee to bring down Central Governments Debt to GDP ratio to

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

FM Arun Jaitley has proposed acceptance of key recommendations of the Fiscal Reform and Budget Management Committee to bring down Central Government’s Debt to GDP ratio to

A	20%
B	30%
C	50%
D	40%

Explanation:

Detailed explanation-1: -The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the General (Combined) Government by 2023, comprising 40% for the Central Government and 20% for the State Government.

Detailed explanation-2: -The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments. As per the Constitution of India, it is mandatory for a State to take the Central Government’s consent for raising any loan if the former owes any outstanding liabilities to the latter.

Detailed explanation-3: -The amendments made to FRBM in 2018, introduced new targets of – Central Government Debt not to cross 40% of GDP and General Government Debt not to cross 60% of GDP by 2024-25.

Detailed explanation-4: -Fiscal Responsibility and Budget Management (FRBM) Act was enacted in 2003. The objective of the Act is to ensure inter-generational equity in fiscal management, long-run macroeconomic stability, better coordination between fiscal and monetary policy, and transparency in the fiscal operations of the Government.

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