FRBM Act
Fiscal Responsibility and Budget Management Act, 2003 aims to ensure fiscal discipline by:
• Reducing fiscal deficit, revenue deficit and public debt
• Increasing transparency in fiscal operations
• Promoting long-term macroeconomic stability
Escape Clause (FRBM)
Allows temporary deviation from fiscal targets during severe shocks such as:
• National calamity
• National security threats
• Large structural reforms
• Sharp economic slowdown
During COVID-19
• Government invoked the escape clause
• Significant deviation from FRBM targets due to extraordinary conditions
Documents presented with the Budget (FRBM)
- Medium-Term Fiscal Policy (MTFP) Statement
- Fiscal Policy Strategy (FPS) Statement
- Macro-Economic Framework (MEF) Statement
- Medium-Term Expenditure Framework (MTEF) Statement (tabled later)
