Consider the following statements about Fiscal Policy statements mandated under FRBM Act.

1. Macroeconomic Framework Statement contains an assessment of the growth prospects of the economy along with the statement of specific underlying assumptions.

2. It contains an assessment of the fiscal balance of the Central Government.

3. The Medium term Fiscal Policy cum Fiscal Policy Strategy Statement sets out three year rolling targets for fiscal deficit, revenue deficit, primary deficit, tax revenue, non-tax revenue and debt of the Central government.

Which of the above statements are correct

Solution

Fiscal Policy Statements mandated under FRBM Act.   1)    Macro-Economic Framework Statement The Macro-economic Framework Statement is presented to Parliament under Section 3 of the Fiscal Responsibility and Budget Management Act, 2003 and the rules made thereunder. It contains an assessment of the growth prospects of the economy along with the statement of specific underlying assumptions. It also contains an assessment regarding the GDP growth rate, the domestic economy and the stability of the external sector of the economy, fiscal balance of the Central Government and the external sector balance of the economy. 2)    Medium-Term Fiscal Policy cum Fiscal Policy Strategy Statement The Medium-Term Fiscal Policy cum Fiscal Policy Strategy Statement is presented to Parliament under Section 3 of the Fiscal Responsibility and Budget Management Act, 2003. It sets out the three-year rolling targets for specific fiscal indicators in relation to GDP at market prices, namely (i) Fiscal Deficit, (ii) Revenue Deficit, (iii) Primary Deficit (iv) Tax Revenue (v) Non-tax Revenue and (vi) Central Government Debt. The Statement includes the underlying assumptions, an assessment of the balance between revenue receipts and revenue expenditure and the use of capital receipts including market borrowings for the creation of productive assets.   It also outlines for the existing financial year, the strategic priorities of the Government relating to taxation, expenditure, borrowings, guarantees etc. The Statement explains how the current fiscal policies are in conformity with sound fiscal management principles and gives the rationale for any major deviation in key fiscal measures.