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?
Answer & explanation
Answer: (c) 1 and 3 only
The N.K. Singh FRBM Review Committee (report made public in 2017) proposed a 60 per cent general-government debt anchor, with the Centre brought down to 40 per cent by FY23 and the States at about 20 per cent. Statement 2 swaps the numbers: it is the Centre whose debt was about 49 per cent of GDP. Article 293(3) makes statement 3 correct.
- ✓ 1. The committee recommended a glide path that brings the Centre's debt to 40 per cent of GDP by FY23 within a general-government anchor of about 60 per cent, leaving roughly 20 per cent for the States together.
- ✗ 2. The figures are reversed. The report puts the Union government's debt at 49.4 per cent of GDP and the States' collective debt at only about 19–21 per cent.
- ✓ 3. Article 293(3) says a State may not raise a loan without the Government of India's consent if any part of a loan made or guaranteed by the Centre is still outstanding.
Remember · FRBM Review (N.K. Singh) Committee: debt anchor 60% of GDP (Centre 40%, States 20%); fiscal deficit 2.5% by FY23. Article 293(3): indebted States need the Centre's consent to borrow.
Sources
- FRBM Review Committee Report, Volume I: Responsible Growth, Department of Economic Affairs ↗ “the Committee recommends a path of medium-term consolidation, where the fiscal deficit is envisaged to be on a glide path, to be reduced to 2.5% of GDP, consistent with reducing the centre's debt to 40% by FY23. … This is the case because the Union government, which has a large debt stock of 49.4 percent of GDP, enjoys a greater downward pressure on its debt due to a favourable r-g.”
- Constitution of India, Article 293(3) (Legislative Department, Government of India) ↗ “A State may not without the consent of the Government of India raise any loan if there is still outstanding any part of a loan which has been made to the State by the Government of India”
Question and answer: UPSC's official GS Paper I (2018, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·