Previous Year Question
Along with the Budget, the Finance Minister also places other documents before the Parliament which include “The Macroeconomic Framework Statement”. The aforesaid document is presented because this is mandated by:
Long-standing parliamentary convention
Article 112 and Article 110(1) of the Constitution of India
Article 113 of the Constitution of India
Provisions of the Fiscal Responsibility and Budget Management Act, 2003
Correct Answer: D
Detailed Solution
The Macroeconomic Framework Statement is a statutory Budget document mandated by the Fiscal Responsibility and Budget Management Act, 2003—FRBM Act.
Section 3 of the FRBM Act requires the Central Government to place fiscal-policy statements before both Houses of Parliament along with the Annual Financial Statement and Demands for Grants. These principally include:
Medium-term Fiscal Policy Statement
Fiscal Policy Strategy Statement
Macroeconomic Framework Statement
The Macroeconomic Framework Statement evaluates the overall condition and prospects of the economy. It ordinarily covers:
GDP growth and the performance of major sectors
The Central Government’s fiscal balance
The economy’s external-sector balance
Current Account Balance and Balance of Payments
Important macroeconomic assumptions, prospects and risks
Article 112 mandates the presentation of the Annual Financial Statement, while Article 110(1) defines a Money Bill. Article 113 deals with estimates and Demands for Grants. None of these provisions specifically mandates the Macroeconomic Framework Statement.
Therefore, the statutory basis for presenting this document is the FRBM Act, 2003.