The Chhattisgarh Fiscal Responsibility and Budget Management Act, 2005

Short TiUe, ertcnt I.

1. (1) lhis ACI may be called the Chbartisgarh fiscal Responsibility md Budget I andCor~ncnmL Maegement AcL 2005. (2) Ir ex~ds to the wbole of Stale of Chhattisgah. (3)

Definitions (a) "Budgetn mwm the annual fmancid statemen1 laid before he House of theSlate legislahue under Article 202 oi he Consrituuon. (b) "Current ym" means the fecial year preceding thc ensuing year; (c) "Enswing year" means h froancia1 yea for whicfi be budget is king presenred; (d) "Finankid year" means the beginning on he 1 st April and ending on 3 1st Mqh nest following; (e) "C.SI=P" mu Grnss Srak ~ornestic Wuc t a1 curreat market prices. (f) "FM deficit' means rhc excess oi aggregate disbursements (net of debt yy- meots) over revenue receiprs. recovery of loans and non-debt capilal receipts, during a fmancid year; (g) "Fid indicators" means such indicators as may bc prescribed for evaluation of he fiscal position OF the Srate govern men^; (h) "Fiscal targers" means he numerid ceilings and pmprtions to total revenue, reaeipts

1. (TRR) or GSDP for he Tical indicamrs: (i) "Prescribedw means prescribed by the rules made under lhis Acr: (j) "Previous year" means the year preccdjng the currcnl ycar; (k) "Revenue deficit" means he difference berween rcvenus expendirure and told Jcvznue rzceiprs (TRR); Explanatioa :-"Total revenue receipls'
2. (TRR) includes Srale's own rcvenuc receipts Mrh tax and non-tax) and current transfers horn Ihe Cenlre (comprising granls and Slale's share of Cenlral lax&); (l) "Toral liabilities" means the liabilities under he Consolidared ~ur;d of he Slare and the Public Account of be Stare and includes borrowings by thcpublic scclor undertakings and he Special purpose iehic~es and other equivalent inslruments including guarantees where the principal or inleresl are to be serviced our of the

Fiscal management principles

1. (1) The State Government shall take appropriate measures to reduce the fiscal deficit and revenue deficit so as to eliminate revenue deficit by the 31st March, 2009 and bring fiscal deficit down to 3% of the GSDP by the 31st March 2009.
2. (2) The State Government shall, by rules made by it, specify-
   • (a) the annual targets for the reduction of fiscal deficit and revenue deficit during the period beginning with the commencement of the Act and ending on 31st March, 2009.
3. (3) The annual targets of assuming contingent liabilities in the form of guarantees and the total liabilities as percentage of GSDP. Provided that revenue deficit and fiscal deficit may exceed the limits specified under this section on the ground or grounds of unforeseen demands on the finances of the State Government arising out of internal disturbance or natural calamity.

The State Government shall in each financial year lay before the State Legislature, the following statement of fiscal policy along with the annual financial statement and demands for grants, namely :-

1. (a) The Macroeconomic Framework Statement;
2. (b) The Medium Term Fiscal Policy Statement; and
3. (c) The Fiscal Policy Strategy Statement.

1. (2) The Macroeconomic Framework Statement shall contain an overview of the State economy, an analysis of growth and sectoral composition of GSDP, an assessment related to State Government finances and future prospects. In particular and without prejudice to the generality of the foregoing provisions the macroeconomic framework statement shall contain an assessment relating :
   • (i) The growth in the GSDP
   • (ii) The fiscal balance of the State Government as reflected in the revenue balance and gross fiscal balance. (3)
   • (i) The Medium Term Fiscal Policy Statement shall set forth in such form as may be prescribed the fiscal management objectives of the State Government and three-year rolling targets for the prescribed fiscal indicators with clear enunciation of the underlying assumptions.
   • (ii) In particular and without prejudice to the provisions contained in sub-section (1), the Medium Term Fiscal Policy Statement shall include the various assumptions behind the fiscal indicators and an assessment of sustainability relating to :-
   • (a) the balance between revenue receipts and revenue expenditure;
   • (b) the use of capital receipts including borrowings for generating productive assets;
2. (4) The Fiscal Policy Strategy Statement shall be in such form as may be prescribed and shall contain, inter alia :-
   • (i) the fiscal policies of the State Government for the ensuing year relating to taxation, expenditure, borrowings and other liabilities, lending, investments, other contingent liabilities, user charges on public goods/utilities and description of other activities, such as guarantees and activities of Public Sector Undertakings which have potential budgetary implications;
   • (ii) the strategic priorities of the State Government in the fiscal area for the ensuing year;
   • (iii) the key fiscal measures and the rational for any major deviation in fiscal measures pertaining to, taxation, subsidy, expenditure, borrowings and user charges on public goods/utilities; and
   • (iv) an evaluation of the current policies of the State Government vis-a-vis the fiscal management principles set out in Section 3 and the fiscal objectives set out in the Medium-Term Fiscal Policy Statement in sub-section 3
3. (1) of section 4.

1. (1) The State Government shall take suitable measures to ensure greater transparency in its fiscal operations in the public interest and minimise, as far as practicable, secrecy in the preparation of the annual financial statement and demands for grants.
2. (2) In particular, and without prejudice to the generality of the foregoing provision, the State Government shall, at the time of presentation of the budget, make disclosures on the following, along with detailed information in such forms, as may be prescribed :
   • (i) the significant changes in the accounting standards, policies and practices affecting or likely to affect the computation of fiscal indicators;
   • (ii) details of borrowings by way of Ways and Means advances/overdrafts availed of from the Reserve Bank of India.
3. (3) Whenever the State Government undertakes to unconditionally and substantially repay the principal amount and/or pay the interest of any separate legal entity, it has to reflect such liability as the borrowing of the State in such form as may be prescribed.
4. (4) The State Government shall, in each financial year, lay before the State Legislature the special statements along with the budget giving in detail the number of employees in Government, public sector and aided institutions and related salaries.

The Minister-in-Charge of the Department of Finance (hereinafter referred to as Minister of Finance) shall review, every quarter, the trends in receipts and expenditure in relation to the budget estimates and place before the State Legislature, the outcome of such reviews.

1. (2) Whenever there is either shortfall in revenue or excess of expenditure over the intra-year targets mentioned in the Fiscal policy Strategy Statement or the rules made under this Act, the State Government shall take appropriate measures for increasing revenue and/or for reducing the expenditure including curtailment of the sums authorised to be paid and applied for out of the Consolidated Fund of the State. Provided that nothing in this sub-section shall apply to the expenditure charged on the Consolidated Fund of the State under clause
2. (3) of Article 202 of the Constitution or any other expenditure, which is required to be incurred under any agreement or contract, which cannot be postponed or curtailed. (3)
   • (i) Except as provided under this Act, no deviation in meeting the obligations cast on the State Government under this Act, shall be permissible without approval of Legislature.
   • (ii) Where owing to unforeseen circumstances, any deviation is made in meeting the obligations cast on the State Government under this Act, the Minister of Finance shall make a statement in the State Legislature explaining :-
   • (a) such deviation in meeting the obligations cast on the State Government under this Act;
   • (b) whether such deviation is substantial and relates to the actual or the potential budgetary outcomes; and
   • (c) the remedial measures the State Government proposes to take.

Repeal.

1. (1) The Chhattisgarh Fiscal Responsibility and Budget Management Act, 2003 (No. 4 of 2003) is hereby repealed.
2. (2) Notwithstanding such repeal, anything done or any action taken under the Act so repealed shall be deemed to have been done or taken under the corresponding provisions of this Act.

1. (1) The State Government may, make rules for carrying out the provisions of the Act. In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :-
   • (a) the annual targets to be specified under sub-section
2. (2) of section 3;
   • (b) The fiscal indicators to be prescribed for the purpose of the subsection (3)(i) of section 4;
   • (c) The forms of the Macroeconomic Framework Statement, Medium-Term Fiscal Policy Statement and Fiscal Policy Strategy Statement under section 4;
   • (d) The forms for disclosure under sub-section
3. (2) and sub-section
4. (3) of section 5;

Protection of action taken in good faith. 9. No suit, prosecution or other legal proceeding shall lie against the State Government or any officer of the State Government or any other person exercising any power or discharging any function or performing any duty under this Act, for anything done in good faith or intended to be done under this Act or any rule made thereunder.

Bar of jurisdiction of Civil Courts. 10.

Act not in derogation of any other law The provisions of this Act shall be in addition to and not in derogation of any other law for the time being in force.

1. (1) If any difficulty arises in giving effect to the provisions of this Act, the State Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty. Provided that no order shall be made under this section after the expiry of three years from the commencement of this Act.