The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer?

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The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given India's track record.

Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.

In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to 'limit the government's borrowing authority' under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Act's deficit target is now only likely to be met next year.

Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committee's proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the 'extraordinary and unanticipated domestic development' of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.

Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.
Based on the inference drawn, what should be the author's stand on escape clause?

a)
Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.
b)
No, it would not be valid, since the escape clause can only be used in the extreme circumstances.
c)
Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.
d)
No, it would not be valid, since the FRBM Act doesn't provided for an escape clause. It is only a proposed rule.

Correct answer is option 'D'. Can you explain this answer?

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The advice of the expert committee to review the Fiscal Responsibility...

Correct Answer is (d)

Author in the entire passage tried to justify the concept of fiscal rectitude and conservative spending. Passage says in the last line that "Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework." Thus, only option (d) aligns with the author's reasoning.

Incorrect Answers None of the other options sets out views that are consistent with those of the author in the passage above.

Option (a) can be a correct answer provided there was sufficient reason given with respect to escape clause.
Choice (b) is incorrect and cannot be taken as a justification. It also misses out upon the reasons on escape clause.
Option (c) also does not provide any strong explanation on Escape Clause.

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The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. Recently, FRBM is amended to remove the bar of 3% of Fiscal Deficit. In such a situation, based only on the authors reasoning in the given passage, would the removal of bar from the FRBM be held valid?

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The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. Which of the following is the plausible inference, in determining the causes of fiscal irresponsibility, can be attributed to the author of the above passage? Opening up of the market and liberalisation of the Indian economy in the 1990s. Destruction of jobs and employment. Spike in the Deflation. Currency Stabilisation.Select the correct answer from the code given below

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The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. According to the above passage which of the following is true regarding the FRBM Act? Demonetisation may have negatively affected the future course of fiscal deficit targets under the act. The 2009 targets of the act were not met as the fiscal stimulus reversed the gains made towards the target. It was enacted due to excessive deficit due to irrational borrowing in the seventies and eighties.Select the correct answer from the code given below

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The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. Based on the authors arguments in the passage above, which of the following would be most correct: The largesse towards voters in the political economy can lead to fiscal imprudence which affects the fiscal deficit and the FRBM targets. Intergenerational parity and private investments in the country are negatively affected by excessive government borrowings.Select the correct answer using the code given below

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_______cannot be delegated.

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The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer?

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The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer?.

Solutions for The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Class 12. Download more important topics, notes, lectures and mock test series for Class 12 Exam by signing up for free.

Here you can find the meaning of The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice The advice of the expert committee to review the Fiscal Responsibility and Budget Management (FRBM) Act of 2003 requires attention, given Indias track record.Excessive and unsustainable borrowing by the government is obviously perverse as it entails a cost on future generations while crowding out private investment.In the past, fiscal irresponsibility has cost jobs, spiked inflation, put the currency in a tailspin and even brought the country to the brink of a default. The possibility of default may have resulted in the liberalisation of the economy in 1991, but the key trigger was irrational public spending on borrowed money in the late-1980s. Less than a decade later, with fiscal discipline faltering and the deficit shooting up to 10% of GDP, the FRBM law was enacted to limit the governments borrowing authority under Article 268 of the Constitution. But the target to limit the fiscal deficit to 3% of GDP (by 2009) was breached after the 2008 global financial crisis as a liberal stimulus reversed the gains in the fiscal space, creating fresh macro-level instability. The FRBM Acts deficit target is now only likely to be met next year.Such damage transmissions from the political economy to the real economy need to be checked forthwith. The committees proposal to maintain the 3% target till 2019-20 before aiming for further reduction is pragmatic, as the extraordinary and unanticipated domestic development of demonetisation happened during its tenure. Such an event, the committee has said, could trigger an escape clause from fixed fiscal targets in its proposed rule-based framework.Q. In Budget 2017, Finance Minister deferred the fiscal deficit target of 3% of the GDP and chose a target of 3.2%, citing the NK Singh committee report. In the upcoming Budget, the government is not likely to meet its fiscal deficit target of 3.2% due to several factors such as low GST collections, spike in oil prices and pressure to spend more due to upcoming elections. Considering, Government is trying to trigger an escape clause from fixed fiscal target.Based on the inference drawn, what should be the authors stand on escape clause?a)Yes, it would be valid, since government is in a constrained position with respect to uncontrollable factors.b)No, it would not be valid, since the escape clause can only be used in the extreme circumstances.c)Yes, it would be valid, due to upcoming elections, FRBM targets cannot be adhered like a fixed northern star.d)No, it would not be valid, since the FRBM Act doesnt provided for an escape clause. It is only a proposed rule.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice Class 12 tests.

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