Which of the following statements about the FRBM Review Committee is NOT correct?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → The committee was asked to give up the 2003 framework and return to discretion.
India kept its faith in fiscal rules. The FRBM Review Committee was asked to retain the 2003 framework and revamp it for the changing scenario.
Option (1) Since the FRBM was enacted, the advanced countries have moved away from the view that fiscal rules are better than discretion. — True. The advanced countries have moved away from that view.
Option (2) The committee was asked to give up the 2003 framework and return to discretion. — False. Its task was to keep the basic framework and update it.
Option (3) In India, the government has affirmed its faith in the fiscal policy principles set out in the FRBM. — True. India kept the FRBM principles.
Option (4) At the time the FRBM was enacted, there was a general thinking that fiscal rules were better than discretion. — True. This was the thinking in 2003.
NCERT (2026-27): “FRBM Review Committee … At the time of enactment of the FRBM, there was a general thinking that fiscal rules were better than discretion. However, since then the advanced countries have moved away from this but in India, the government has affirmed its faith in the fiscal policy principles set out in the FRBM. Therefore, there is support for retaining the basic operational framework designed in 2003 but to revamp it to incorporate the changing scenario in India and also with an eye for the future path of growth – the task that has been handed to the FRBM Review Committee.” |