Consider the following statements: 1. The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt to GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments. 2. The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments. 3. As per the Constitution of India, it is mandatory for a State to take the Central Government's consent for raising any loan if the former owes any outstanding liabilities to the latter. Which of the statements given above is/are correct? Correct Answer 1 and 3 only The correct answer is 1 and 3 only. The Fiscal Responsibility and Budget Management (FRBM) Review Committee chaired by Mr. N.K. Singh submitted its report in January 2017. The Committee suggested using debt as the primary target for fiscal policy. Debt to GDP ratio of 60% should be targeted with a 40% limit for the center and 20% limit for the states. The targeted debt to GDP ratio should be achieved by 2023. Hence, statement 1 is correct. The Central Government has domestic liabilities of 46.1% of GDP (2016-17) and as a percent of GDP, whereas States’ Government liabilities increased to 23.2 % at end-March 2016. Hence, statement 2 is not correct. Article 293(1) empowers State Governments to borrow only from domestic sources. Further, according to Article 293(3) as long as a State has outstanding borrowings from the Central Government, it is required to obtain Central Government's prior approval before incurring debt. Hence, statement 3 is correct.