Which of the following statements is/are correct pertaining to the fiscal targeting framework announced in the budget?
1. It has been decided to do away with revenue deficit and effective revenue deficit targets.
2. Bring down central governments debt to GDP ratio to $40 %$ by 2024-25
Select the correct answer using the codes given below:

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 A 1 and 2
The key operational parameter from in the new fiscal targeting framework will be the Fiscal Deficit. Also, from 2018-19, it has been decided to do away with the Revenue Deficit and Effective Revenue Deficit targets. Also, the recommendations of the FRBM (Fiscal Responsibility and Budget Management) Committee relating to the adoption of debt rule will be accepted to bring down Central Government’s debt to GDP ratio to 40% by FY 2024-25.

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