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UPSC 2018: Consider the following statements: 1. The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments. 2. The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments. 3. As per the Constitution of India, it is mandatory for a State to take the Central Government’s consent for raising any loan if the former owes any outstanding liabilities to the latter. Which of the statements given above is/are correct?
(a)1 only
(b)2 and 3 only
(c)1 and 3 only
(d)1, 2 and 3
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Not attemptedCorrect Answer: (c) 1 and 3 only
The N.K. Singh FRBM Review Committee recommended that by FY 2022-23 the combined (general) government debt-to-GDP ratio should be capped at 60 %, split 40 % for the Centre and 20 % for the States, so Statement 1 is correct. Current data show the Centre’s domestic debt (~49 % of GDP) far exceeds that of the States (~21 %), so Statement 2 is incorrect. Article 293(3) of the Constitution requires a State to obtain the Centre’s consent for new borrowings if it has outstanding loans from the Centre, making Statement 3 correct. Therefore only Statements 1 and 3 are right. ([drishtiias.com](https://www.drishtiias.com/daily-updates/daily-news-analysis/cag-review-of-the-frbm-act?utm_source=openai))
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What is the correct answer to this UPSC 2018 Indian Economy question?▼
The correct answer is option (c): 1 and 3 only. Watch the detailed video explanation in our Sherlocking Prelims course on UnlockIAS.
Which year was this Fiscal Policy & Budget question asked in UPSC Prelims?▼
This question was asked in UPSC CSE Prelims 2018, GS Paper 1, as Question 9. It falls under Indian Economy > Fiscal Policy & Budget.
What is the difficulty level of this UPSC question?▼
This question is rated "difficult". It is a challenging question that demands deep subject knowledge and analytical thinking.
How many UPSC Prelims questions have been asked from Fiscal Policy & Budget?▼
UPSC has asked 44 questions from Fiscal Policy & Budget (under Indian Economy) across multiple years. Visit the topic page to see the full list and year-wise trends.