UPSC Prelims 2020 Question:

Along with the Budget, the Finance Minister also places other documents before the Parliament which include ‘The Macro Economic Framework Statement’. The aforesaid document is presented because this is mandated by

Explanation:

• The Section 3(5) of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 mandates the presentation of a Macro-Economic Framework Statement before the Parliament at the time of the presentation of the Union Budget .
  
  
• The Act also requires government to present Medium Term Fiscal Policy Statement and Fiscal Policy Strategy Statement.
  
  
• The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in 2003 which set targets for the government to reduce fiscal deficits. The objective of the Act is to ensure inter-generational equity in fiscal management, long-run macroeconomic stability, better coordination between fiscal and monetary policy, and transparency in the fiscal operation of the Government. It provides a legal institutional framework for fiscal consolidation.
  
  

Therefore, option (4) is the correct answer.

Subject: Economics | Public Finance