CAG Review of FRBM Act 2023-24: Key Highlights and Fiscal Insights

The recent CAG Review of the FRBM Act for FY 2023-24 highlights a significant decrease in the Central Government Debt to 57% of GDP. This review is crucial for UPSC aspirants, particularly for GS Paper 3, as it delves into fiscal policies and economic stability. Last Updated: 2025-08-22

Key Facts About CAG Review of FRBM Act 2023-24

• Central Government Debt: Declined to 57% of GDP as of March 2024.
• General Government Debt: Slightly declined to 81.3% of GDP, still above the 60% target.
• Debt Sustainability Analysis: Indicates a decline in the debt-to-GDP ratio, assessing government's debt servicing ability.
• Unrealised Taxes: Increased to Rs 31.11 lakh crore by the end of FY 2023-24.
• FRBM Act, 2003: Enacted to reduce fiscal deficits and promote macroeconomic stability.
• Fiscal Responsibility: Finance Minister reviews fiscal trends bi-annually.
• Medium-Term Fiscal Policy: Sets three-year targets for fiscal indicators.
• Implementation: CAG conducts annual compliance reviews to ensure adherence.

India's Fiscal Responsibility and Economic Stability

The FRBM Act plays a pivotal role in India's macroeconomic framework, aiming to ensure fiscal discipline and long-term economic stability. By reducing the debt-to-GDP ratio, India aligns with its strategic goal of sustainable economic growth. The country's fiscal deficit target of 4.8% of GDP, achieved in June 2025, reflects its commitment to fiscal prudence, positioning India favorably in international economic rankings.

Related Government Schemes/Policies

• FRBM Act, 2003: Aims to reduce fiscal deficits and ensure fiscal responsibility.
• Medium-Term Fiscal Policy: Provides a framework for fiscal targets over a three-year period.

UPSC Relevance

• GS Paper 3: Economic Development - Government Budgeting, Fiscal Policy.
• Prelims Angle: Questions on fiscal deficit targets, debt-to-GDP ratios, and the FRBM Act's provisions.
• Mains Angle: Analytical themes on fiscal responsibility, economic stability, and debt management strategies.
• Essay Paper: Topics on fiscal discipline and economic reforms.

FAQ Section

• What is the CAG Review of the FRBM Act? The CAG Review assesses the compliance of the Fiscal Responsibility and Budget Management (FRBM) Act, focusing on fiscal deficit and debt management targets.
• Why is the FRBM Act important? It is crucial for maintaining fiscal discipline, reducing fiscal deficits, and ensuring long-term economic stability, with a target to reduce General Government Debt to 60% of GDP.
• What are the key features of the FRBM Act? The Act includes fiscal deficit targets, debt-to-GDP ratio goals, and mandates bi-annual fiscal reviews by the Finance Minister, with CAG conducting compliance checks.