PREVIOUS
✖
FRBM Act and Kerala
April 1 , 2020
1479 days
983
0
- The Chief Minister of Kerala has urged the Centre to provide Kerala with flexibility under the Fiscal Responsibility and Budget Management (FRBM) Act.
- It is to ensure that the State’s finances are not adversely impacted in the rest of the financial year starting on April 1.
- To help fund the emergency relief package, Kerala proposes to borrow as much as Rs 12,500 crore from the market in April itself.
- The law does contain what is commonly referred to as an ‘escape clause’.
About FRBM
- The Fiscal Responsibility and Budget Management Act (FRBM Act), 2003, establish financial discipline to reduce fiscal deficit.
- The Act’s long-term objective is for India to achieve fiscal stability and to give the Reserve Bank of India (RBI) flexibility to deal with inflation in India.
- Under the Act, the Centre can exceed the annual fiscal deficit target citing grounds.
- The reasons 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.
Leave a Reply
Your Comment is awaiting moderation.