Full formGovernment & Exams
FRBMstands forFiscal Responsibility and Budget Management
Full Form of FRBM
What is FRBM?
The Fiscal Responsibility and Budget Management (FRBM) Act is a landmark Indian legislation enacted in 2003 to institutionalize fiscal discipline. It mandates the central government to reduce fiscal deficits and revenue deficits, and to ensure prudent debt management. The Act sets annual targets for these deficits, aiming to bring them down to sustainable levels over a specified period. Under FRBM, the government is required to present a Medium-Term Fiscal Policy Statement, a Fiscal Policy Strategy Statement, and a Macroeconomic Framework Statement in Parliament along with the annual budget. The Act also prohibits borrowing from the Reserve Bank of India (RBI) except in exceptional circumstances. Over the years, the targets have been revised, especially during economic slowdowns or crises like the COVID-19 pandemic, when the government relaxed the deficit targets to support growth. In 2016, a review committee under N.K. Singh recommended a new fiscal roadmap, leading to amendments that allowed more flexibility. The FRBM Act is crucial for maintaining macroeconomic stability, controlling inflation, and ensuring intergenerational equity. For UPSC and other competitive exams, understanding FRBM is essential because it directly impacts fiscal policy, budget-making, and India's economic health. It is frequently asked in the Indian Economy section of examinations.
FRBM का फुल फॉर्म
राजकोषीय उत्तरदायित्व एवं बजट प्रबंधन
Example
The Finance Minister announced that the government will adhere to the FRBM Act target of fiscal deficit at 3% of GDP for the upcoming financial year.
FRBM — frequently asked questions
What is the full form of FRBM?
The full form of FRBM is Fiscal Responsibility and Budget Management.
What is the FRBM Act in India?
The FRBM Act is a law enacted in 2003 to ensure fiscal discipline by setting targets for government deficit and debt, and mandating transparent budget statements.
What are the current FRBM targets for India?
As per the latest roadmap, the central government aims to bring the fiscal deficit below 3% of GDP and the revenue deficit to near zero, with flexibility allowed during economic shocks.