The FFBM Act stands for the Fiscal Responsibility and Budget Management Act, which was enacted in India in 2003. The main objective of this act is to reduce the gross fiscal deficit in the country. The correct answer to the given question is option 'C', which states that the FFBM Act aims at reducing the gross fiscal deficit by 0.5%.

The gross fiscal deficit is the excess of total expenditure over total revenue of the government. It represents the borrowing requirements of the government to meet its expenditure commitments. A high fiscal deficit can have negative consequences on the economy, such as inflation, higher interest rates, and a decrease in private investment.

The FFBM Act aims to bring discipline and accountability in fiscal management by setting targets for fiscal deficit reduction. It lays down certain rules and guidelines that the government needs to follow in order to achieve fiscal consolidation. These rules include:

1. Fiscal Responsibility: The act mandates the government to bring down the fiscal deficit to a certain level over a period of time. It sets a target for reducing the fiscal deficit as a percentage of GDP.

2. Medium-Term Fiscal Policy Statement: The government is required to present a medium-term fiscal policy statement to Parliament, which outlines its fiscal policy objectives and the strategies to achieve them. This statement provides a roadmap for fiscal consolidation.

3. Fiscal Policy Strategy: The act requires the government to prepare a fiscal policy strategy statement, which lays down the fiscal policy objectives and the measures to achieve them. This statement includes revenue and expenditure projections, as well as the policy measures to reduce the fiscal deficit.

4. Fiscal Responsibility and Budget Management Rules: The act also provides for the formulation of fiscal responsibility and budget management rules. These rules lay down the procedures and guidelines for budget preparation, expenditure control, and fiscal reporting.

By implementing these measures, the FFBM Act aims to reduce the gross fiscal deficit by 0.5%. This reduction in the fiscal deficit will help in achieving fiscal consolidation and maintaining macroeconomic stability. It will also create an environment conducive for sustainable economic growth and development.