ASSESING THE ENFORCEABILITY AND REFORM OF THE FRBM ACT IN THE CONTEXT OF FISCAL DISCIPLINE IN INDIAN STATES
AUTHOR – HRADYESH CHATURVEDI* & DR. SANJAY KULSHRESTHA**
* SCHOLAR AT INSTITUTE OF LAW, JIWAJI UNIVERSITY GWALIOR
** PROFESSOR AT INSTITUTE OF LAW, JIWAJI UNIVERSITY GWALIOR
BEST CITATION – HRADYESH CHATURVEDI & DR. SANJAY KULSHRESTHA, ASSESING THE ENFORCEABILITY AND REFORM OF THE FRBM ACT IN THE CONTEXT OF FISCAL DISCIPLINE IN INDIAN STATES, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (9) OF 2026, PG. 608-615, APIS – 3920 – 0001 & ISSN – 2583-2344. DOI – https://doi.org/10.65393/IJLRV6I965
ABSTRACT
Can a legislation truly enforce fiscal discipline if it carries no mechanism to punish its violation? Can a statutory framework designed to bind government to financial prudence remain credible when its targets are routinely revised, suspended, and abandoned without the consequence? Can a federal nation like India afford to impose fiscal responsibility obligations asymmetrically, holding it’s stated to standards that the union itself is not genuinely compelled to observe?
This paper delves into these fundamental questions. The Fiscal Responsibility and Budget Management Act, 2003 was enacted with the ambitious objective of institutionalizing fiscal discipline across all levels of government in India. Two decades since its enactment, however, the Act stands exposed as a largely symbolic instrument, one that articulates fiscal ideals without providing the institutional machinery to enforce them. The Act’s broadly worded escape clauses, the absence of an independent oversight body, and the pattern of repeated target revision have collectively reduced it to a statement of intent rather than a binding legal commitment.
This paper critically examines the structural Infirmities of the FRBM Act by analysing the gap between its stated objectives and actual fiscal outcomes at both the Union and the State levels. It interrogates that asymmetric burden placed on states vis-s-vis the Centre, and evaluates the NK Singh Committee recommendations of 2017 for their adequacy and the reasons for their non-implementation. Drawing upon comparative models from Australia’s Charter of Budget Honesty, the United Kingdom’s Office for Budget Responsibility, and Canada’s Parliamentary Budget Officer, the paper argues that meaningful fiscal reform in India demands not merely statutory revision but the creation of a genuinely independent fiscal council with constitutional backing. Without such reforms, fiscal discipline in India will remain aspirational rather tha enforceable and the promise of the FRBM Act will continue to fall short of its foundational purpose.
Keywords: Fiscal Responsibility, Budget Management, FRBM Act, Fiscal Discipline, Fiscal Deficit, Fiscal Federalism, Enforceability, Escape Clauses, Fiscal Council, NK Singh Committee, State Finances