Question Details

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

Options

A

Long standing parliamentary convention

B

Article 112 and Article 110(1) of the Constitution of India

C

Article 113 of the Constitution of India

D

Provisions of the Fiscal Responsibility and Budget Management Act, 2003

Show Answer

Correct Answer :

Option D

Provisions of the Fiscal Responsibility and Budget Management Act, 2003

Solution :

The correct option is Provisions of the Fiscal Responsibility and Budget Management Act, 2003.

Detailed Explanation:
The presentation of the 'Macro Economic Framework Statement' before the Parliament is a statutory mandate under the Fiscal Responsibility and Budget Management (FRBM) Act, 2003. This Act was enacted to institutionalize financial discipline, reduce India's fiscal deficit, improve macroeconomic management, and ensure overall balanced public funds management.

Under Section 3 of the FRBM Act, the Central Government is required to lay three key policy statements before both Houses of Parliament along with the Annual Financial Statement (Budget):
1. Macro-economic Framework Statement: This document provides an assessment of the growth prospects of the economy with specific underlying assumptions. It contains an assessment of the growth rate of GDP, the fiscal balance of the Central Government, and the external sector balance.
2. Medium-term Fiscal Policy Statement: This statement sets three-year rolling targets for key fiscal indicators.
3. Fiscal Policy Strategy Statement: This statement outlines the strategic priorities of the government in the fiscal area.

Why other options are incorrect:
- Article 112: Deals with the 'Annual Financial Statement' (commonly known as the Budget) but does not mandate the macroeconomic framework statement.
- Article 110(1): Defines 'Money Bills' in the Constitution of India.
- Article 113: Lays down the procedure in Parliament with respect to estimates (Demands for Grants).
- Long standing parliamentary convention: Although many aspects of budget presentation are guided by conventions, the Macro Economic Framework Statement is specifically mandated by the statutory provisions of the FRBM Act, 2003.

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