Q. As per the Fiscal Responsibility and Budget Management (FRBM Act), 2003, the RBI does not participate in which of the following activities with effect from April 1, 2006?
Answer: Primary issuance of Government securities
Notes: The correct answer is "Primary issuance of Government securities." The FRBM Act, 2003, aimed to ensure fiscal discipline in India. As of April 1, 2006, the Reserve Bank of India (RBI) ceased to directly participate in the primary issuance of government securities, transferring this responsibility to the government. This shift was part of a broader move towards market-driven mechanisms in public finance, enhancing transparency and efficiency in government borrowing.