economics medium MCQ

The Fiscal Responsibility and Budget Management (FRBM) Act, 2003, was primarily enacted to:

  1. Ensure equitable distribution of taxes between the Centre and States
  2. Institutionalize financial discipline, reduce fiscal deficits, and manage public debt
  3. Regulate the stock market and prevent insider trading
  4. Establish a national pension system for government employees

Answer: Institutionalize financial discipline, reduce fiscal deficits, and manage public debt

The FRBM Act mandates the government to lay out a roadmap for reducing fiscal and revenue deficits, ensuring inter-generational equity in debt management. It aims to bring transparency and accountability to the fiscal management process, though its rigid targets have occasionally been relaxed during severe macroeconomic shocks or pandemics.

Topic Public Finance - Institutions
Exam Relevance UPSC Prelims, SSC CGL, Banking
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