Arunachal Pradesh Fiscal Responsibility (and Budget Management) Act, 2006
No: 4 Dated: Dec, 06 2006
THE ARUNACHAL PRADESH FISCAL RESPONSIBILITY ACT, 2006
(ACT N0.4 OF 2006)
An Act to provide for the responsibility of the State Government to ensure fiscal stability and sustainability, and to enhance the scope for improving social and physical infrastructure and human development by achieving sufficient revenue surplus, reducing fiscal deficit and removing impediments to the effective conduct of fiscal policy and prudent debt management through limits on State Government borrowings, debt and deficits, greater transparency in fiscal operations of the State Government and use of a medium-term fiscal framework and for matters connected therewith or incidental thereto.
Be it enacted by the Arunachal Pradesh Legislature in the Fifty-seventh Year of the Republic of India as follows :-
1. Short title, extent and commencement. - (1) This Act may be called the Arunachal Pradesh Fiscal Responsibility [and Budget Management] Act, 2006.
(2) It shall extend to the whole of Arunachal Pradesh.
(3) It shall be deemed to have come into force with effect from 1st April, 2005.
2. Definitions. - In this Act, unless the context otherwise requires:-
(a) "Annual Budget" means the annual financial statement laid before the House of State Legislature under Article 202 of the Constitution;
(b) "Current Year" means the year preceding the year for which budget and Medium Term Fiscal Plan (MTFP) are being presented;
(c) "Fiscal Deficit" means the excess of-
(i) total disbursements from the Consolidated Fund of the State (excluding repayment of debt) over total receipts into the Fund (excluding the debt receipts), during a financial year; or
(ii) total expenditure from the Consolidated Fund of the State (including loans but excluding repayment of debt) over own tax and non-tax revenue receipts, devolution and other grants from Government of India to the State, and non-debt capital receipts during a financial year which represents the borrowing requirements, net of repayment of debt of the State Government during financial year;
Explanation. - For the purpose of calculation of fiscal deficit, borrowings by Public Sector Undertakings and Special Purpose Vehicles and other equivalent instruments where liability for repayment is on the State Government are to be treated as borrowings of the Government.
(d) "Fiscal Indicators" means the such as numerical ceilings and proportions to gross state domestic product, as may be prescribed, for evaluation of the fiscal position of the State Government;
(e) "Previous Year" means the year preceding the current year;
(f) "Revenue Deficit" means the difference between revenue expenditure and revenue receipts; and
Explanation. - For the purpose, of this clause interest payment by Government towards borrowings by Public Sector Undertakings and Special Purpose Vehicles and other equivalent instruments where liability for repayment is on Government, shall be treated as revenue expenditure.
(g) "Total Liabilities" means the liabilities under the Consolidated Fund of the State and the public account of the State.
3. Medium Term Fiscal Plan to be laid before the Legislature. - (1) The State Government shall in each financial year lay before the State Legislature a Medium term Fiscal Plan along with the annual budget.
(2) The Medium Term Fiscal Plan shall set forth a four-year rolling target for the prescribed fiscal indicators with specification of underlying assumptions.
(3) In particular and without prejudice to the provisions contained in sub-section (2). the Medium Term Fiscal Plan shall include an assessment of sustainability relating to,-
(i) the balance between revenue receipts and revenue expenditures;
(ii) the use of capital receipts including borrowings for productive assets.
(4) The Medium Term Fiscal Plan shall, inter alia, contain,-
(a) the medium term fiscal objectives of the State Government;
(b) an evaluation of the performance of the prescribed fiscal indicators in the previous year vis-a-vis the targets set out earlier, and the likely performance in the current year as per revised estimates;
(c) a statement on recent economic trends and future prospects for growth and development affecting fiscal position of the State Government;
(d) the strategic priorities of the State Government in the Fiscal areas for the ensuing financial year;
(e) the policies of the State Government for the ensuing financial year relating to taxation, expenditure, borrowings (including borrowings by Public Sector Undertakings and Special Purpose Vehicles and other equivalent instruments where liability for repayment is on the State Government, with ceiling fixed for each agency) and other liabilities, lending and investments, pricing of administered goods and services and description of other activities, such as guarantees and activities of Public Sector Undertakings which have potential budgetary implications; and the key fiscal measures and targets pertaining to each of these;
(f) an evaluation as to how the current policies of the State Government are in conformity with the fiscal management principles set out in section 4 and the fiscal objectives set out in the Medium Term Fiscal Plan.
(5) The Medium Term Fiscal Plan shall be in such form as may be prescribed.