The correct answer is 2003. Explanation & Key Takeaways: • The Fiscal Responsibility and Budget Management (FRBM) Act was enacted in 2003 by the Government of India. • The FRBM Act was aimed at introducing financial discipline and reducing India's fiscal deficit. • It set targets for the government to reduce fiscal deficit and revenue deficit over a period of time. • The legislation mandated the government to achieve a fiscal deficit of 3% of GDP and eliminate revenue deficit by March 2008. • The Act was implemented under the leadership of then Finance Minister Jaswant Singh. Related Concepts: • Key Objectives of FRBM Act: • To ensure intergenerational equity in fiscal management. • To improve the transparency and accountability in India's fiscal operations. • To eliminate revenue deficit and reduce fiscal deficit. • Amendments to FRBM Act: • In 2018, the FRBM Act was amended to replace revenue deficit targets with effective revenue deficit targets. • The amendment introduced a new medium-term fiscal framework. • It aimed to align fiscal policy with long-term economic goals. • Challenges in Implementation: • Economic slowdown and external shocks have made achieving fiscal targets difficult. • High subsidies and expenditure on social welfare schemes pose challenges to fiscal consolidation. • Related Terminology: • Fiscal Deficit: The difference between total revenue and total expenditure of the government, excluding borrowing. • Revenue Deficit: The shortfall in government's current income compared to its current expenses. • Primary Deficit: Fiscal deficit minus interest payments.