Economics • Indian EconomyHard
What was the primary recommendation of the 'FRBM Review Committee' chaired by N.K. Singh regarding fiscal management targets?
A. Abandoning fiscal deficit targets entirely in favor of currency devaluation
B. Targeting a debt-to-GDP ratio of 60 percent combined for central and state governments✓ Correct Answer
C. Eliminating all capital expenditure allocations to achieve immediate revenue surpluses
D. Delegating budgetary borrowing powers directly to commercial banking syndicates
💡 Solution & Explanation
The FRBM Review Committee recommended establishing a target debt-to-GDP ratio of 60 percent, comprising 40 percent for the central government and 20 percent for state governments combined, to ensure long-term macroeconomic stability. Abandoning targets contradicts the statutory framework of fiscal responsibility. Capital expenditure is vital for long-term growth and was not recommended for elimination. Borrowing authority remains anchored within sovereign legislative oversight.
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