Q. With reference to Independent Fiscal institutions (IFIs) consider the following statements::
1.These institutions functions as the source of additional revenues to the government.
2.These institutions are usually financed by public funds and are functionally independent.
3.These institutions increase accountability and improved fiscal transparency by providing positive analysis and recommendations in the area of fiscal policy..
Which of the statements given above is/are correct?
Answer: C
Notes:
Explanation –
Statement 1 is incorrect. The work of IFIs is to act as a fiscal watchdog of the government. They are aimed at promoting sustainable public finances through various functions, including monitoring compliance with fiscal rules, production or endorsement of macroeconomic forecasts for the budget, and advising the government on fiscal policy matters.
Statement 2 and 3 are correct. IFIs are usually financed by public funds and are functionally independent. These institutions increase accountability and improved fiscal transparency by providing positive analysis and recommendations in the area of fiscal policy.
Source: ORF
