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The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 primarily aims to:
The FRBM Act, 2003 aims to institutionalise fiscal discipline and reduce the fiscal deficit. It requires the government to follow medium-term fiscal policy statements and deficit targets, with transparency to Parliament. It does not deal with repo rates, FDI or crop support prices.
- AInstitutionalise fiscal discipline and reduce the fiscal deficit through medium-term fiscal policy statementsCorrect
- BFix the repo rate for commercial banks
- CRegulate foreign direct investment inflows
- DSet minimum support prices for crops
Explanation
The FRBM Act was enacted to bring in fiscal discipline, transparency and medium-term fiscal planning by setting targets for deficits and requiring policy statements to be placed before Parliament. The other options relate to monetary policy, FDI policy and agricultural pricing, which are outside its purpose.
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