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In 2003, the _______ was passed to reduce the gross fiscal deficit by 0.5% of the GDP in each financial year.
- a)FRBM Act
- b)FERA
- c)FEMA
- d)FEPA
Correct answer is 'A'. Can you explain this answer?
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In 2003, the _______ was passed to reduce the gross fiscal deficit by ...
The answer to this question is the FRBM Act (Fiscal Responsibility and Budget Management Act) passed in 2003. Let's break down the explanation:
- **FRBM Act**:
- The Fiscal Responsibility and Budget Management Act was enacted in 2003 with the aim of reducing the gross fiscal deficit by 0.5% of the GDP in each financial year.
- **Objective**:
- The main objective of the FRBM Act was to bring about fiscal discipline and reduce the fiscal deficit over time. This was seen as crucial for sustainable economic growth and stability.
- **Provisions**:
- The FRBM Act introduced provisions such as setting targets for reducing fiscal deficit, revenue deficit, and effective management of public funds.
- **Compliance**:
- The Act required the government to comply with the set targets and take necessary measures to achieve them. It also mandated transparency and accountability in fiscal operations.
- **Impact**:
- The implementation of the FRBM Act helped in improving the fiscal health of the country by reducing the fiscal deficit gradually. It also led to better management of public finances and increased investor confidence.
- **Challenges**:
- While the FRBM Act had its benefits, there were challenges in meeting the targets, especially during economic downturns or times of crisis. Flexibility in the Act was needed to address such situations.
In conclusion, the FRBM Act played a significant role in promoting fiscal discipline and responsible budget management in India. It continues to be an important framework for ensuring sustainable economic growth and stability.
- **FRBM Act**:
- The Fiscal Responsibility and Budget Management Act was enacted in 2003 with the aim of reducing the gross fiscal deficit by 0.5% of the GDP in each financial year.
- **Objective**:
- The main objective of the FRBM Act was to bring about fiscal discipline and reduce the fiscal deficit over time. This was seen as crucial for sustainable economic growth and stability.
- **Provisions**:
- The FRBM Act introduced provisions such as setting targets for reducing fiscal deficit, revenue deficit, and effective management of public funds.
- **Compliance**:
- The Act required the government to comply with the set targets and take necessary measures to achieve them. It also mandated transparency and accountability in fiscal operations.
- **Impact**:
- The implementation of the FRBM Act helped in improving the fiscal health of the country by reducing the fiscal deficit gradually. It also led to better management of public finances and increased investor confidence.
- **Challenges**:
- While the FRBM Act had its benefits, there were challenges in meeting the targets, especially during economic downturns or times of crisis. Flexibility in the Act was needed to address such situations.
In conclusion, the FRBM Act played a significant role in promoting fiscal discipline and responsible budget management in India. It continues to be an important framework for ensuring sustainable economic growth and stability.
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In 2003, the _______ was passed to reduce the gross fiscal deficit by 0.5% of the GDP in each financial year.a)FRBM Actb)FERAc)FEMAd)FEPACorrect answer is 'A'. Can you explain this answer?
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