With reference to the Fiscal Responsibility and Budget Management (FRBM) Act, consider the following statements:
1. The FRBM Act prohibits the borrowings by the government from the RBI.
2. The Government cannot move away from the path of fiscal consolidation mandated under the Act.
3. Effective revenue deficit has now become a new fiscal parameter due to the Act.
Which of the statements given above is/are incorrect?
Statement 1 is correct: The Act prohibits borrowing by the government from the Reserve Bank of India, thereby, making monetary policy independent of fiscal policy. The Act bans the purchase of primary issues of the Central Government securities by the RBI after 2006, preventing monetization of government deficit. Statement 2 is incorrect: FRBM Act provides a legal institutional framework for fiscal consolidation. It is now mandatory for the Central government to take measures to reduce the fiscal deficit, eliminate revenue deficit and generate revenue surplus in the subsequent years. Statement 3 is correct: The concepts of the “Effective Revenue Deficit” and “Medium Term Expenditure Framework” statement are the two important features of the amendment to the FRBM Act in the direction of expenditure reforms.
Nilgiri khapli is the variety of
Which of the following disease is not caused by nematode?
What is the objective of the MAHARISHI initiative?
Sowing depths for maize and semi dwarf wheat seeds are
Which was the first plant bacterial disease reported?
The first 'true' allopolyploid triticale according to today's definition was bred in 1888 by the famous German plant breeder W. Rimpau who managed to c...
Which of the following does not represent the use of rice husk?
What is the main cause of the physiological disorder known as "Tirak" or "bad boll opening" in cotton?
The Coffee plant is a small, broadleaf evergreen shrub or small tree with an upright habit. Coffee belongs to which family group?
The Indian council of Agricultural Research (ICAR) set up an All India Soil Survey Committee in 1953 which divided the Indian soils into …….. major ...