Economics • Indian EconomyHard
Examine the recommendations of the NK Singh Committee appointed in 2016. What major fiscal architecture did the committee propose for India?
A. Transitioning to a debt-to-gross domestic product ratio target rather than focusing solely on fiscal deficit percentages✓ Correct Answer
B. Abolishing all central government subsidies on food and fertilizers to achieve immediate fiscal balance
C. Creating a unified federal tax authority independent of both Parliament and state legislatures
D. Indexing all public sector wages directly to international consumer price indices
💡 Solution & Explanation
The FRBM Review Committee chaired by NK Singh recommended replacing the fiscal deficit target with a comprehensive debt-to-gross domestic product ratio target of forty percent for the central government and twenty percent for states by specified timelines. It also proposed an independent Fiscal Council to evaluate budget forecasts and compliance. This shift prioritized broader macroeconomic debt sustainability over annual borrowing caps.
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