Fiscal Management Principles to ensure fiscal discipline in the State

The fiscal management principles to ensure Fiscal Discipline in the State shall be as follows - (A)Expenditure Management: i) To rationalize and pursue expenditure policies that would provide impetus to economic growth, poverty reduction and improvement in human welfare; ii) Manage the expenditure of the State in relation to its receipts potential so as to prevent as far as possible deterioration in its fiscal position; specially on the revenue account; iii) To make effort to contain non plan expenditure with the sole objective of bringing down the deficit on the Balance from Current Revenue/Non Plan Gap; iv) To reduce the expenditure on salaries and wages of the Government through an objective analysis on the relevancy of the existing posts and to abolish any identified vacant redundant posts;

1. (B) Resource Management: Tax:- i) Undertake measures to improve the States own resources with an emphasis on cost recovery; ii) To ensure a reasonable degree of stability and predictability with regard to rates in taxes and revenue expected from them; iii) To pursue tax policy with due regard to economic efficiency, social equity and compliance cost; iv) To maintain the integrity of the tax system by minimizing special incentives, concessions and exemptions; Non-Tax:- Pursue non tax policies to increase revenues, with due regard to cost recovery and equity; (C)Debt Management: i) To ensure that the policy decisions of the Government have due regard to the financial implications on the future generations; ii) Maintain Government debt at sustainable level by bringing down the fiscal deficit in a phased manner to the level of 3 of GSDP; iii) Manage guarantees and other contingent liabilities prudently with particular reference to the quality and level of such liabilities; iv) To ensure that borrowing are used productive assets and accumulation of capital assets and are not used to finance revenue expenditures; (D)Management of Public Sector undertakings: Minimize the fiscal risk associated with management of public sector undertakings and utilities providing gods and services through a review of the performance of the State Public Sector Undertakings, including restructuring of those that are absolutely essential and closure of those no longer viable.;
2. (E) Budget Management: Formulate a realistic budget with due regard to general economic outlook and revenue prospects and minimize deviation during the course of the year;
3. (F) Transparency in Fiscal Management: Maintain transparency by disclosure of sufficient information to allow public scrutiny on the conduct of fiscal policy and the state of public finances.