The Fiscal Responsibility And Budget Management (FRBM) Act

Consider the following statements:

  1. The Fiscal Responsibility and Budget Management (FRBM) Act is a law enacted by the Government of India in 2003 to ensure fiscal discipline – by setting targets including reduction of fiscal deficits and elimination of revenue deficit.
  2. Under the Act, Escape clauses provide flexibility to governments to overshoot fiscal deficit targets in times of need, enabling them to respond to economic shocks.
Which of the statements given above is/are correct?
A
Only 1
B
Only 2
C
Both 1 and 2
D
Neither 1 nor 2
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