Karnataka Local Fund Authorities Fiscal Responsibility Act, 2003

No: 41 Dated: Sep, 06 2003

Karnataka Local Fund Authorities Fiscal Responsibility Act, 2003

An Act to provide for the responsibility of Local Fund Authorities to ensure best practice of financial management of local funds and to enhance the scope for improving social and physical infrastructure and human development by achieving sufficient revenue surplus, ensuring prudent management of public fiscal operations of the Local Funds and use of a medium term fiscal frame work, and for matters connected therewith or incidental thereto.

Whereas it is expedient to provide for the responsibility of Local Fund Authorities to ensure fiscal stability and sustainability and to enhance scope for improving social and physical infrastructure and human development by achieving sufficient revenue surplus, performance enhancement, citizen participation and transparency while removing impediments to the effective conduct of fiscal policy and enabling prudent financial management through appropriate modern systems and with greater transparency in fiscal operations of the Local Funds with the use of a medium-term fiscal frame work, and for matters connected therewith or incidental thereto.

Be it enacted by the Karnataka State Legislature in the fifty-fourth year of the Republic of the India as follows:-

1. Short title, extent and commencement.- (1) This Act may be called the Karnataka Local Fund Authorities Fiscal Responsibility Act, 2003.

(2) It extends to such Local Fund Authorities as may be notified by the State Government from time to time.

(3) It shall come into force on such date as the State Government may, by notification, appoint.

2. Definitions.- In this Act, unless the context otherwise requires,-

(a) “local fund” means the revenue administered by bodies which by any law or rule having the force of law are under the control of State Government whether in regard to the proceeding generally or to specific matters such as sanctioning of their budget, sanction to the creation or filling up of post or particular appointments or encashment of leave, pension or similar matters;

(b) "local fund authority" means any body which administers the local fund;

(c) “accounting standard” means such accounting standards in respect of local fund authorities, as may be prescribed;

(d) “annual budget” means the budget placed before the concerned local fund authority as per the relevant Acts or the rules made thereunder;

(e) “budget variance” means the difference between the budgeted amount and the actuals for the financial year;

(f) “Controlling Authority” means any officer appointed as controlling authority by the State Government for the purpose of this Act and different controlling authorities may be appointed in respect of different local fund authorities;

(g) “Current Year” means the year preceding the year for which budget and Medium Term Fiscal Plan (MTFP) are being presented;

(h) “fiscal indicators” means such measures as may be prescribed, for evaluation of fiscal position of local fund authority;

(i) “Previous Year” means the year preceding the current year.