Fiscal Management Policy

(I) The State Government shall take appropriate measures to eliminate the revenue deficit and keep the fiscal deficit at a self-sustaining level and shall, through the measures specified below, provide for sufficient revenue surplus: (a) maintain government debt at a prudent level; (b) prudent management of guarantees and other contingent liabilities, specially with reference to the risk profile of such liabilities; (c) determination of the State Government's policy keeping in view the fiscal effects on future generations; (d) borrowing to be used for productive purposes and for the creation of capital assets and not for meeting current expenditure; (e) keeping a rational stability and estimation with reference to the tax burden; (f) avoiding special incentives, concessions and tax exemptions with the objective of maintaining the fairness and stability of the tax system; (g) implementation of tax policies keeping in view the economic capacity and compliance cost; (h) following non-tax revenue policies keeping in view cost recovery and equity; (i) following such expenditure policies as to encourage economic development and poverty alleviation; (j) creation of revenue surplus for capital formation and use for productive expenditure; (k) proper maintenance of the government's physical assets; (l) providing sufficient information on the purpose of fiscal policy and the state of public finance for public review; (m) using government resources in such a way as to provide the best value for money, as well as the best use of government assets; (n) minimizing fiscal risks in the operation of public undertakings and public services providing public assets and services; (o) maintaining expenditure at the level of generated revenue; (p) preparing realistic and objective budgets, giving due importance to the general economic scenario and the real revenue perspective, and minimizing deviations within the year; and (q) taking appropriate measures in the context of cash management system to keep the gap within the limits of resources so that situations of frequent overdrafts from the Reserve Bank of India do not arise and the cash deficit can be gradually reduced year after year.