Question

Which one of the following was not stipulated in the Fiscal Responsibility and Budget Management Act?

• A. Elimination of revenue deficit by the end of the fiscal year 2007-08
• B. Non-borrowing the Central Government from Reserve Bank of India except under certain circumstances
• C. Elimination of primary deficit by the end of the fiscal year 2008-09
• D. None of the above

Answer 1

The correct option is C Elimination of primary deficit by the end of the fiscal year 2008-09

The FRBM Act 2003 in its amended form was passed by the government to bring fiscal discipline and to implement a prudent fiscal policy. As per FRBM Act 2003, the revenue deficit should be reduced to an amount equivalent by 0.5% or more of GDP every year, beginning with the financial year 2004-05 and eliminate revenue deficit by March, 2009. Thus Option A is the answer.