In which year was the Madhya Pradesh Rajkoshiya Uttardayitva Evam Budget Prabandhan Adhiniyam passed?

Question

UnlockIAS · Accepted Answer

Correct — C, 2005. The Madhya Pradesh Rajkoshiya Uttardayitva Evam Budget Prabandhan Adhiniyam (the state's Fiscal Responsibility and Budget Management Act) was enacted in 2005. Like most Indian states, Madhya Pradesh legislated its own FRBM law after the Twelfth Finance Commission (2005-10) offered debt relief to states that adopted binding fiscal-discipline targets. The Act commits the state to capping its fiscal deficit and eliminating its revenue deficit along a defined path.

Why the other options are wrong — (a) This is the year Parliament enacted the CENTRAL FRBM Act — the classic Centre-vs-State date trap; Madhya Pradesh's own Act came two years later, in 2005.  (b) Madhya Pradesh did not pass its fiscal-responsibility statute in 2004; the state law followed the Twelfth Finance Commission's incentive, in 2005.  (d) Too late — MP's FRBM Act was already enacted in 2005.

Concept: Fiscal Responsibility and Budget Management (FRBM) laws bind a government to numerical fiscal targets — chiefly capping the fiscal deficit (fresh borrowing) and eliminating the revenue deficit — and to greater budget transparency. The Union enacted its FRBM Act in 2003; the states enacted their own versions, mostly around 2005, after the Twelfth Finance Commission tied debt relief to such legislation.

State PCS 2018 Q16 — Madhya Pradesh GK PYQ with Answer

State PCS 2018 Q16 — Madhya Pradesh GK PYQ with Answer