Fiscal Responsibility and Budget Management (FRBM) Act, 2003
The FRBM Act, 2003, is the statutory framework governing India's fiscal discipline. It mandates the central government to pursue fiscal consolidation by reducing the fiscal deficit and eliminating the revenue deficit. The Act requires the government to present a Medium-Term Fiscal Policy Statement (MTFPS), a Fiscal Policy Strategy Statement (FPSS), and a Macroeconomic Framework Statement alongside the budget. These documents set out the government's fiscal targets and the rationale for any deviation.
- Enacted: 2003; Rules notified: 2004
- Original targets: Eliminate revenue deficit; reduce fiscal deficit to 3% of GDP by FY09
- 2008 financial crisis caused suspension of targets; reactivated and revised subsequently
- Finance Act, 2018 amendment added an "escape clause" allowing deviation of up to 0.5% of GDP under specified conditions (national security, natural disasters, economic downturns)
- Targets are now presented via the Medium-Term Fiscal Policy cum Strategy Statement
● Tracked since February 01, 2026 · last seen July 05, 2026 · updates as the daily brief publishes
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