Fiscal deficit and the FRBM framework

Off-budget borrowing and public-enterprise liabilities sit outside the headline figures, which is where the Fiscal Responsibility and Budget Management Act, 2003 binds only as far as the accounting reaches. That Act sets a statutory deficit path for the Union, with medium-term fiscal policy statements laid alongside the Budget and an escape clause permitting departure on specified grounds. A 2018 amendment, following the 2017 review committee, shifted the primary anchor from the fiscal deficit to the debt-to-GDP ratio while keeping the deficit as an operational target. Three measures are distinct: fiscal deficit is total borrowing; revenue deficit finances current spending; primary deficit is fiscal deficit less interest payments.