Escape Clause in the FRBM Act ।।

Escape clause refers to the situation under which the central government can flexibly follow fiscal deficit target during special circumstances. 

This terminology was innovated by the NK Singh Committee on FRBM.

The government has utilised 'escape clause' under the Fiscal Responsibility and Budget Management (FRBM) Act which provides it leeway for relaxation of fiscal deficit roadmap during time of stress.

"Section 4 (2) of the FRBM Act provides for a trigger mechanism for a deviation from the estimated fiscal deficit on account of structural reforms in the economy with unanticipated fiscal implications. 

Therefore taken a deviation of 0.5 percent, consistent with Section 4(3) of FRBM Act, both for RE 2019-20 and BE 2020-21,"

The government raised fiscal deficit target to 3.8 percent of the GDP from 3.3 percent pegged earlier for 2019-20 due to revenue shortage.

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