The FRBM Act contain an lsquo escape clause rsquo under which Centre can exceed the annual fiscal de...........

Indian Economic System(CSC) Budgeting and Fiscal policy

The FRBM Act contain an ‘escape clause’ under which Centre can exceed the annual fiscal deficit target on how many of the following grounds?

1.Collapse of agriculture

2.National security

3.Structural reforms

4.Decline in real output growth of a quarter by at least three percentage points below the average of the previous four quarters.

Only One

Only Two

Only Three

All Four

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Explanation:

All Options are correct

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.