Detailed Explanation:

Answer: Option 3 — 1 and 3 only

This question tests knowledge of fiscal federalism, the FRBM Review Committee recommendations, and constitutional provisions regarding state borrowings. Statement 1 correctly reflects the FRBM Committee's debt-to-GDP targets, and Statement 3 accurately describes Article 293 provisions, while Statement 2 provides incorrect figures for domestic liabilities.

✅ Statement 1 – Correct: The FRBM Review Committee (N.K. Singh Committee, 2017) recommended a combined debt-to-GDP ratio of 60% by 2023, with 40% for the Centre and 20% for States, to ensure fiscal sustainability.

❌ Statement 2 – Incorrect: The Central Government's domestic liabilities were approximately 46.1% of GDP (2016-17), not 21%, while State Governments' liabilities were around 23.2% of GDP, not 49% — the figures are reversed and incorrect.

✅ Statement 3 – Correct: Article 293(3) of the Constitution mandates that a State must obtain Central Government consent for raising any loan if it has outstanding liabilities to the Centre.

📝 Short Notes: Fiscal Responsibility and State Borrowings

• FRBM Act, 2003: Enacted to ensure fiscal discipline and reduce fiscal deficit through institutional mechanisms.
• FRBM Review Committee (2017): Chaired by N.K. Singh; recommended a debt-to-GDP ratio of 60% for general government (40% Centre + 20% States) by 2023, and introduced an escape clause for deviation during structural reforms, recession, or national calamity.
• Article 293(1): Empowers State Governments to borrow within India upon the security of the Consolidated Fund of the State, subject to limits prescribed by the State Legislature.
• Article 293(3): Requires a State to obtain Central Government consent before raising any loan if it has outstanding liabilities to the Centre, ensuring coordination in fiscal management.
• Article 292: Empowers the Central Government to borrow upon the security of the Consolidated Fund of India, subject to limits prescribed by Parliament.
• Fiscal Deficit: Difference between total revenue and total expenditure of the government; FRBM targets aimed at 3% of GDP for the Centre.