What is Escape Clause?

The Escape Clause is mentioned under Section 4(2) of the Fiscal Responsibility and Budget Management(FRBM) Act.

The Escape Clause allows the Center to breach its fiscal deficit target by 0.5 percentage points in exceptional circumstances. 

These exceptional circumstances include: 

a) National security 

b) war 

c) National calamity 

d) Collapse of agriculture 

e) Structural reforms and 

f) Decline in real output growth of a quarter by at least three percentage points below the average of the previous four quarters.