What is the FRBM limit?

For FY 2020, the fiscal deficit limit was relaxed to 3.5% by the Central Government. As per FRBM Act, the fiscal deficit limit should be 3% of the GDP, but there have been requests from state governments to increase the limit to either 4% or 5% due to increased borrowings, expenditures, and reduced revenue generation due to Covid-19 pandemic. You can read about the Fiscal Responsibility & Budget Management (FRBM) Act in the given link.

Further readings:

  1. Previous Years Economic Mains Questions for UPSC GS-3
  2. Indian Economy Notes For UPSC

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