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?

Statement 1 is correct. The N.K. Singh committee (FRBM Review Committee, 2017) proposed a combined general government debt target of 60% of GDP by 2023, split as 40% for the Centre and 20% for the States.

Statement 2 is wrong because the figures are reversed. The Centre carries the larger domestic debt, around half of GDP, while the States' liabilities are much smaller, roughly a fifth. Aspirants often memorise the numbers without tracking which tier owns which share.

Statement 3 is correct. Article 293(3) bars a State from raising a loan without the Union's consent if the State still owes the Union an outstanding loan or if the Union has guaranteed one. The consent requirement is mandatory, and it ties into the Centre-State fiscal relations that come up in Mains GS-III and GS-II.

• Statement 1: correct, as above.
• Statement 2: incorrect, since the Centre's domestic liabilities exceed the States'.
• Statement 3: correct under Article 293(3).

Trap: Statement 2 looks plausible because the States' debt is often discussed, so aspirants accept the numbers without checking who holds the larger share.