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6

Question 6

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

AOptions

A
A) Long standing parliamentary convention
B
B) Article 112 and Article 110(1) of the Constitution of India
C
C) Article 113 of the Constitution of India
D
D) Provisions of the Fiscal Responsibility and Budget Management Act, 2003

BSolution

The 'Macro-Economic Framework Statement' is one of the key documents presented to the Parliament along with the Union Budget. Its presentation is mandated by the Fiscal Responsibility and Budget Management (FRBM) Act, 2003.

The FRBM Act was enacted to institutionalize financial discipline, reduce fiscal deficit, and improve macro-economic management. To achieve these objectives, the Act requires the government to present three statements along with the Budget annually:

  • Medium Term Fiscal Policy Statement: Sets out the fiscal policy of the Central Government for the medium-term, including fiscal projections.
  • Fiscal Policy Strategy Statement: Lays down the fiscal policy of the Central Government for the current financial year and assesses its sustainability.
  • Macro-Economic Framework Statement: Contains the macro-economic forecasts for the economy, including the GDP growth rate, fiscal balance, and current account deficit. This statement facilitates parliamentary scrutiny of the government's macro-economic policies and their impact.

The other options are incorrect because:

  • A) Long standing parliamentary convention: While some practices are conventions, this specific statement's presentation is legally mandated by an Act.
  • B) Article 112 and Article 110(1) of the Constitution of India: Article 112 deals with the Annual Financial Statement (Budget) and Article 110 defines Money Bills. Neither explicitly mandates the Macro-Economic Framework Statement.
  • C) Article 113 of the Constitution of India: Article 113 deals with the procedure in Parliament with respect to estimates (demands for grants). It does not mandate this specific document.

Therefore, the correct answer is that its presentation is mandated by the provisions of the Fiscal Responsibility and Budget Management Act, 2003.

Diagram for Q6

CStrategy

When questions relate to specific documents presented with the Budget or other economic policies, consider whether they are constitutional mandates, statutory mandates (from specific acts of Parliament), or mere conventions. Knowledge of major economic legislation like the FRBM Act is crucial for such questions.

DSyllabus Analysis

This question falls under the Indian Economy section, specifically public finance, budgetary processes, and fiscal policy, including relevant legislation.

EQuestion Analysis

Medium. While the Budget process is well-known, recalling the specific acts that mandate accompanying documents like the Macro-Economic Framework Statement requires detailed knowledge of economic legislation.