Debt Sustainability — Policy Reforms

Entry	Year	Description	Impact
FRBM Act, 2003 (Initial Enactment)	2003	The Fiscal Responsibility and Budget Management (FRBM) Act was enacted to institutionalize financial discipline, reduce fiscal deficit, improve macroeconomic management, and ensure long-term fiscal stability. It mandated targets for revenue deficit and fiscal deficit.	Provided a statutory framework for fiscal prudence, though initial targets were often missed. Laid the groundwork for a more disciplined approach to public debt management.
FRBM Rules, 2004 (and subsequent notifications)	2004 onwards	These rules operationalized the FRBM Act, setting out specific targets and timelines for fiscal indicators. Subsequent notifications and amendments adjusted these targets based on economic realities.	Provided the detailed roadmap for achieving the FRBM Act's objectives, though flexibility was often introduced to respond to economic cycles and crises.
FRBM Act Review Committee (N.K. Singh Committee)	2017	Though not an amendment to the Act itself, the N.K. Singh Committee's recommendations led to significant policy shifts and proposed amendments to the FRBM Act. It suggested replacing the revenue deficit target with a debt-to-GDP target as the primary fiscal anchor and introduced an 'escape clause'.	Influenced the government's medium-term fiscal strategy, shifting focus to debt-to-GDP as a key sustainability metric and providing flexibility during extraordinary circumstances. Many of its recommendations have been adopted in spirit, if not fully through formal legislative amendments.