Consider the following statements:

1. The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments.

2. The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments.

3. As per the Constitution of India, it is mandatory for a State to take the Central Government’s consent for raising any loan if the former owes any outstanding liabilities to the latter.

Which of the statements given above is/are correct?

The correct option is 1 and 3 only.

Analysis of Statement 1:

The Fiscal Responsibility and Budget Management (FRBM) Review Committee, chaired by N.K. Singh, submitted its report in January 2017. The committee recommended a target total debt-to-GDP ratio of 60% for the general (combined) government to be achieved by the financial year 2022–23. This target comprised 40% for the Central Government and 20% for the State Governments. Therefore, Statement 1 is correct.

Analysis of Statement 2:

In reality, the Central Government accounts for a significantly higher proportion of domestic liabilities compared to the State Governments. Around the time of the report, the Central Government's domestic liabilities were around 49% of GDP, while the State Governments' liabilities were around 21% of GDP (the percentages given in the statement are reversed). Therefore, Statement 2 is incorrect.

Analysis of Statement 3:

According to Article 293(3) of the Constitution of India, a State Government cannot raise any loan without the consent of the Government of India if there is still outstanding any part of a loan which has been made to the State by the Government of India, or in respect of which a guarantee has been given by the Government of India. Hence, obtaining the Central Government's consent is mandatory under such circumstances. Therefore, Statement 3 is correct.

Since Statements 1 and 3 are correct while Statement 2 is incorrect, the correct option is 1 and 3 only.