Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act (FRBMA) concerns
A
fiscal deficit only
B
revenue deficit only
C
both fiscal and revenue deficit
D
neither fiscal deficit nor revenue deficit.
Correct Answer: Option C
Explanation
1. The Fiscal Responsibility and Budget Management Act (FRBMA), enacted in 2003 in India, aimed to institutionalize financial discipline, reduce India's fiscal deficit, improve macroeconomic management, and ensure long-term fiscal stability.
2. The Act sets targets for the government to reduce key deficit indicators.
3. Specifically, it mandates reduction targets for both the fiscal deficit (the difference between total expenditure and total revenue, including borrowings) and the revenue deficit (the difference between revenue expenditure and revenue receipts).
4. Therefore, the FRBMA concerns both fiscal and revenue deficit.