However, due to the 2007 international financial crisis, the deadlines for the implementation of the targets in the act was initially postponed and subsequently suspended in 2009.
In 2011, given the process of ongoing recovery, Economic Advisory Council publicly advised the Government of India to reconsider reinstating the provisions of the FRBMA.
Several revisions later, it resulted in a much relaxed and watered-down version of the initial bill[4] (including postponing the date for elimination of revenue deficit to 31 March 2008) with some experts, like Dr Saumitra Chaudhuri of ICRA Ltd.[Note 2][5](and now a member of Prime Ministers' Economic Advisory Council) commenting, "all teeth of the Fiscal Responsibility Bill have been pulled out and in the current form it will not be able to deliver the anticipated results.
[11] Since the act was primarily for the management of the governments' behaviour, it provided for certain documents to be tabled in the parliament annually with regards to the country's fiscal policy.
It restricted them to the trading of Government securities in the secondary market after an April, 2005, barring situations highlighted in exceptions paragraph.
It required the Finance Minister of India to only conduct quarterly reviews of the receipts and expenditures of the Government and place these reports before the Parliament.
[13] The residuary powers to make rules with respect to this act were with the Central Government[8] with subsequent presentation before the Parliament for ratification.
Some quarters, including the subsequent Finance Minister Mr. P. Chidambaram, criticised the act and its rules as adverse since it might require the government to cut back on social expenditure necessary to create productive assets and general upliftment of rural poor of India.
[9] The vagaries of monsoon in India, the social dependence on agriculture and over-optimistic projections of the task force in-charge of developing the targets were highlighted as some of the potential failure points of the Act.
However, other viewpoints insisted that the act would benefit the country by maintaining stable inflation rates which in turn would promote social progress.
[19] In August 2009, IMF had opined that India should implement fiscal reform at the soonest possible, enacting a successor to the current act.
More recently, in February 2011, the PMEAC recommended the need for reinstatement of fiscal discipline of the Government of India, starting 2011–12 financial year.
The committee had wide-ranging terms of reference (ToR) to comprehensively review the existing FRBM Act in the light of contemporary changes, past outcomes, global economic developments, best international practices and to recommend the future fiscal framework and roadmap for the country.
These primarily related to strengthening the institutional framework on fiscal matters as well as certain issues connected with new capital expenditures in the budget.
[35] Chief Economic Advisor Arvind Subramanian, who was also a member of the FRBM Review Committee, has published his own dissent note in Annexure 5 of the report submitted to the Government of India.