UPSC CSE Prelims
Question 79
Consider the following statements :
- 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.
- The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments.
- 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 ?
View correct answer and explanation
Correct answer: C
Correct Option: C
Explanation: The N. K. Singh FRBM Review Committee recommended a combined public debt target of 60% of GDP by 2023 (40% Centre/20% states). The asserted 21% versus 49% liability figures are reversed/inaccurate, and Article 293(3) addresses state borrowing when Central loans are outstanding.
Statement/Pair-wise Analysis:
Statement/Item 1: Correct - The review recommended 60% combined debt–GDP, with 40% for Centre and 20% for states.
Statement/Item 2: Incorrect - Central debt was substantially higher than the cited 21% and the state number 49% is inaccurate for the period.
Statement/Item 3: Correct - Under Article 293(3), a state with outstanding Central-government loans or guarantees requires Central consent for further borrowing.
Option-wise Analysis:
A: Incorrect - omits correct statement/item 3.
B: Incorrect - includes incorrect statement/item 2; omits correct statement/item 1.
C: Correct - includes all and only the true statements/items.
D: Incorrect - includes incorrect statement/item 2.