MCQ- Fiscal Responsibility and Budget Management ACT 2003 (FRBMA)

Objective type Questions and Answers (Highlighted)  Fiscal Responsibility and Budget Management ACT 2003 (FRBMA)

Q-1	The Fiscal Responsibility and Budget Management Act, 2003 (FRBMA) is an Act of the Parliament of India have the objectives to:-
(a)	institutionalize financial discipline, reduce India's fiscal deficit, improve macroeconomic management
(b)	overall management of the public funds by moving towards a balanced budget
(c)	Both (a) and (b)
(d)	None of the above
Q-2	The main purpose of this enactment was to eliminate revenue deficit of the country (building revenue surplus thereafter) and bring down the fiscal deficit to a manageable
(a)	3% of the GDP by March 2008.
(b)	2% of the GDP by March 2008.
(c)	3% of the GDP by March 2013.
(d)	1% of the GDP by March 2008.
Q-3	The FRBM bill was introduced with the broad objective of
(a)	eliminating revenue deficit
(b)	prohibiting government borrowings from the Reserve Bank of India three years after enactment of the bill
(c)	reducing the fiscal deficit to 2% of GDP and to reduce liabilities to 50% of the estimated GDP by year 2011.
(d)	All of the above
Q-4	The main objectives of the act were:
(a)	to introduce transparent fiscal management systems in the country
(b)	to introduce a more equitable and manageable distribution of the country's debts over the years
(c)	to aim for fiscal stability for India in the long run
(d)	All of the above
Q-5	This act was comprises of following three statements to be tabled in the Parliament along with the Annual Financial Statement and demands for grants
(a)	Annual Fiscal Policy Statement, Fiscal Policy Strategy Statement  and Macro-economic Framework Statement
(b)	Medium-term Fiscal Policy Statement, Fiscal Policy Strategy Statement  and Macro-economic Framework Statement
(c)	Annual Fiscal Policy Statement, Fiscal Compliance Statement  and Macro-economic Framework Statement
(d)	Annual-term Fiscal Policy Statement, Fiscal Policy Strategy Statement  and Micro-economic Framework Statement
Q-6	This act was comprises of following three statements to be tabled in the Parliament along with the Annual Financial Statement and demands for grants. These three statement served the specific purpose and objective. Match the specific objective against each statement A Medium-term Fiscal Policy Statement  A This report was to contain forecasts enumerating the growth prospects of the country. GDP growth, revenue balance, B Fiscal Policy Strategy Statement  B assessment of sustainability with regards to revenue deficit and the use of capital receipts of the Government (including market borrowings) for generating productive assets. C Macro-economic Framework Statement  C tactical report enumerating strategies and policies for the upcoming Financial Year including strategic fiscal priorities, taxation policies, key fiscal measures
(a)	A-B, B-C, C-A
(b)	A-C, B-A, C-B
(c)	A-A,B-C,C-B
(d)	A-B,B-A,C-C
Q-7	The Central Government, by rules made by it, specified the following principles for Fiscal Management
(a)	setting annual targets for reduction of deficit,
(b)	setting targets for reduction of annual fiscal deficit of the country
(c)	setting targets for reducing contingent liabilities
(d)	All of the above
Q-8	The Act provided that the Central Government shall not borrow from the RBI except under exceptional circumstances where there is temporary shortage of cash in particular financial year. The exceptional circumstances are
(a)	National security, natural calamity or other exceptional grounds that the Central Government may specify
(b)	The Act also prevent RBI from trading of Government securities in the primary market secondary market n the for Government securities.
(c)	provided they were approved by both the Houses of the Parliament as soon as possible, once these targets had been exceeded
(d)	All of the above
Q-9	As per this Act, the Finance Minister of India require to conduct quarterly reviews of the receipts and expenditures of the Government and place these reports
(a)	before Cabinet of Ministers
(b)	before the Parliament.
(c)	before the Parliament during Budget review
(d)	None of the above
Q-10	The minimum annual reduction of GDP to be reported to Parliament is
(a)	-0.5% of GDP
(b)	-0.3% of GDP
(c)	-0.1% of GDP
(d)	-0.7% of GDP
Q-11	The Ceiling of fiscal deficit to be reported to Parliament under this act is
(a)	-0.1% of GDP
(b)	-0.5% of GDP
(c)	-0.7% of GDP
(d)	-0.3% of GDP
Q-12	The Ceiling of annual reduction in Total Debt to be reported to Parliament under this act is
(a)	-0.3% of GDP
(b)	-0.5% of GDP
(c)	-0.7% of GDP
(d)	-0.1% of GDP
Q-13	Four fiscal indicators to be projected in the medium term fiscal policy statement were proposed. These are…..
(a)	revenue deficit as a percentage of GDP
(b)	fiscal deficit as a percentage of GDP
(c)	tax revenue as percentage of GDP and total outstanding liabilities as percentage of GDP
(d)	All of the above
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