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International Relations·Easy

Consider the following statements about the targets prescribed under the Fiscal Responsibility and Budget Management Act, 2003: 1. The Central Government to reduce the fiscal deficit to 3% of GDP. 2. The Central Government to reduce its debt to the level of 40% of the GDP. 3. General Government Debt to be reduced to the level of 60% of the GDP. 4. The Central Government not to give additional guarantees with respect to any loan on security of the Consolidated Fund of India in excess of 0.5% of the GDP in any financial year. Which of the statements given above are correct?

Consider the following statements about the targets prescribed under the Fiscal Responsibility and Budget Management Act, 2003:

1. The Central Government to reduce the fiscal deficit to 3% of GDP.

2. The Central Government to reduce its debt to the level of 40% of the GDP.

3. General Government Debt to be reduced to the level of 60% of the GDP.

4. The Central Government not to give additional guarantees with respect to any loan on security of the Consolidated Fund of India in excess of 0.5% of the GDP in any financial year.

Which of the statements given above are correct?

Options

  1. a.

    1 and 2 only

  2. b.

    2 and 3 only

  3. c.

    2, 3 and 4 only

  4. d.

    1, 2, 3 and 4

    Correct answer

Explanation

• According to the Fiscal Responsibility and Budget Management Act, the Central Government shall:

o take appropriate measures to limit the fiscal deficit upto 3% of the GDP by 31st March 2021.

o endeavour to ensure that the General Government Debt does not exceed 60% of the GDP by the end of the financial year 2024-2025.

o the Central Government debt does not exceed 40% of the GDP by the end of the financial year 2024-2025.

o not give additional guarantees with respect to any loan on security of the Consolidated Fund of India in excess of 0.5% of the GDP in any financial year.

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