Government released fine print of the FRBM Report: Angel Broking

"The Fiscal Responsibility and Budget Management (FRBM) report was submitted by Mr. N K Singh to the prime minister in late January 2017. The Government of India released highlights of this FRBM report on April 12th.

The key recommendations of the FRBM report has been to scrap the FRBM Act 2003 altogether and replace it with a new Act. Additionally, the FRBM Report has suggested a clear downward trajectory for the fiscal deficit on a progressive basis. The Fiscal deficit is to be brought down to 3% for the period 2018-2020. Further, the fiscal deficit is to be reduced to 2.8% by 2021, 2.6% by 2022 and finally to stabilize at 2.5% of GDP from 2023 onwards. Additionally, the FRBM Report has also suggested that the FRBM Committee be given regulatory and operational powers beyond mere advisory powers so as to make it more effective.

The lower fiscal deficit trajectory is positive from the point of view of India's sovereign credit rating and the external value of the rupee and will also have a salutary effect on FPI flows into India."

Source : Equity Bulls

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