CAG Tables FRBM Act Compliance Report 2023-24
Why focus: FRBM Act debt-to-GDP targets—GS3 Economy, highly prone to Assertion-Reason questions on macroeconomic indicators.
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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BEFORE: The fiscal deficit targets were strictly bound by pre-pandemic FRBM rules aiming for a steady 3 percent of GDP. NOW: The government is operating on a revised post-pandemic glide path aiming for a fiscal deficit of below 4.5 percent by FY 2025-26.
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BEFORE: Absolute central government debt was lower in FY 2022-23. NOW: Absolute debt increased by Rs. 15.58 lakh crore in FY 2023-24, driven heavily by reliance on internal borrowings.
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BEFORE: Higher debt-to-GDP ratios were recorded during the pandemic peak years due to massive stimulus and GDP contraction. NOW: The Central Government debt as a percentage of GDP has moderated to 57.00 percent in FY 2023-24 due to denominator (GDP) growth outpacing absolute debt growth.
Prelims Angle
NCERT Connection
Practice Questions
Q1
Correct Statement(s)Which of the following statements is/are correct regarding the FRBM Act and its compliance? 1. The N.K. Singh Committee recommended a central government debt-to-GDP ratio target of 40 percent. 2. An increase in absolute debt always results in a higher debt-to-GDP ratio, regardless of the economic growth rate.