Consider the following statements with respect to the Fiscal Responsibility and Budget Management Act, 2003:

It ensures inter-generational equity in fiscal management.

It aims to set a limit on the Central and state government’s debt and deficits.

On the states, it sets 5% of Gross State Domestic Product (GSDP) cap on their annual budget deficits.

Which of the statements given above is/are correct?

Question

Fiscal Responsibility and Budget Management Act (2003) aims to make the Central government responsible for ensuring inter-generational equity in fiscal management and long-term macroeconomic stability.
The Act envisages the setting of limits on the Central and state government’s debt and deficits.
The States have since enacted their own respective Financial Responsibility Legislation, which sets the same 3% of Gross State Domestic Product (GSDP) cap on their annual budget deficits.

GKToday Admin · Accepted Answer

Only 1 & 2

Fiscal Responsibility and Budget Management Act (2003) aims to make the Central government responsible for ensuring inter-generational equity in fiscal management and long-term macroeconomic stability.
The Act envisages the setting of limits on the Central and state government’s debt and deficits.
The States have since enacted their own respective Financial Responsibility Legislation, which sets the same 3% of Gross State Domestic Product (GSDP) cap on their annual budget deficits.

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