Consider the following statements about the Medium Term Fiscal Policy Statement:
1. It provides 3-year rolling targets for fiscal indicators in relation to GDP at market prices.
2. The fiscal indicators included under this statement are revenue deficit, fiscal deficit, effective revenue deficit, tax to GDP ratio and outstanding central government liabilities.
Which of the above statements is/are correct?

1 only

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2 only

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1 and 2

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Neither 1 nor 2

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Solution

The correct option is C 1 and 2
The medium term fiscal policy is presented to Parliament under Section 3(2) of the Fiscal Responsibility and Budget Management Act, 2003. It sets out the three-year rolling targets for five specific fiscal indicators in relation to GDP at market prices, namely (i) Revenue Deficit, (ii) Fiscal Deficit, (iii) Effective Revenue Deficit (iv) Tax to GDP ratio and (v) Total outstanding Central Government Liabilities at the end of the year.

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