Full formGovernment & Exams
FRAstands forFiscal Responsibility Act
Full Form of FRA
What is FRA?
The Fiscal Responsibility Act (FRA) in India refers to the legislative framework aimed at ensuring fiscal discipline and prudent financial management by the government. Enacted as the Fiscal Responsibility and Budget Management (FRBM) Act in 2003, it mandates the government to reduce fiscal deficit, control public debt, and maintain transparency in fiscal operations. The FRA sets annual targets for revenue deficit, fiscal deficit, and borrowing limits, which the central government must adhere to while presenting the Union Budget. State governments have also adopted similar acts under the recommendations of the Finance Commission. The Act is crucial in the Indian context as it promotes macroeconomic stability, curbs inflationary pressures, and enhances investor confidence. It is frequently referenced in economic surveys, budget documents, and parliamentary discussions. For students preparing for UPSC, RBI Grade B, or other competitive exams, understanding the FRA's provisions, amendments (like the escape clause during COVID-19), and its impact on India's fiscal health is essential. The Act has been instrumental in reducing India's fiscal deficit over the years, though challenges like adhering to targets during economic slowdowns persist.
FRA का फुल फॉर्म
राजकोषीय उत्तरदायित्व अधिनियम
Example
The Finance Minister assured the Parliament that the government would meet the FRA target of reducing the fiscal deficit to 3% of GDP by the next financial year.
FRA — frequently asked questions
What is the full form of FRA?
The full form of FRA is Fiscal Responsibility Act, also known as the Fiscal Responsibility and Budget Management (FRBM) Act in India.
Why was the Fiscal Responsibility Act introduced in India?
It was introduced in 2003 to bring fiscal discipline, reduce fiscal deficit and public debt, and ensure transparency in the government's financial management.
What are the key targets under the FRA in India?
Key targets include reducing the fiscal deficit to 3% of GDP and revenue deficit to zero, along with limiting government guarantees and debt-to-GDP ratio.