The NK Singh Committee, which was formed in 2016, was associated with which of the following?

Correct option is C

The correct answer is (c) Reviewing the FRBM Act, 2003.

• The NK Singh Committee was formed by the Government of India in 2016 to review the Fiscal Responsibility and Budget Management (FRBM) Act, 2003.

• The committee was tasked with recommending changes to the existing fiscal framework, especially in the context of India's evolving macroeconomic situation and fiscal requirements.

• The committee's key recommendations included:

  • A more flexible fiscal deficit target with an escape clause to allow for short-term deviations in case of emergencies.

  • Setting the fiscal deficit target at 3% of GDP as the medium-term goal, with specific time frames and clear targets for the next few years.

  • Consideration of debt-to-GDP ratio as an additional measure for fiscal discipline.

  • Addressing structural reforms and measures to improve transparency in government budgeting.

Information Booster:

• FRBM Act, 2003: This act was introduced in India to set targets for the government to eliminate fiscal deficit, reduce public debt, and ensure sustainable fiscal management.

• Fiscal Deficit Target: The NK Singh Committee emphasized the need to bring down India's fiscal deficit but suggested allowing some flexibility for the government during economic disruptions, such as natural disasters or economic crises.

• The committee was headed by NK Singh, a former bureaucrat and economic expert, who provided crucial insights into India's fiscal management.

Additional Information:

• Trade Deficit: While the committee did not focus on the trade deficit, India's trade deficit has been a separate concern for policymakers, usually managed by the Ministry of Commerce and RBI.

• Standing Deposit Facility: This was introduced by the Reserve Bank of India in 2018 as a liquidity tool but was not the focus of the NK Singh Committee.

• Monetary Policy Committee (MPC): The MPC, established in 2016, is responsible for setting India’s monetary policy, including interest rates, but was not related to the NK Singh Committee’s objectives.