1. Q.-The FRBM Act contain an ‘escape clause’ under which Centre can exceed the annual fiscal deficit target on which of the following grounds?
1. National calamity
2. Collapse of agriculture
3. National security
4. Decline in real output growth of a quarter by at least three percentage points below the average of the previous four quarters.
Select the correct answer code:
Solution: c
● How does a relaxation of the FRBM work?
● The law does contain what is commonly referred to as an ‘escape clause’. Under Section 4(2) of the Act, the Centre can exceed the annual fiscal deficit target citing grounds that include national security, war, national calamity, collapse of agriculture, structural reforms and decline in real output growth of a quarter by at least three percentage points below the average of the previous four quarters.