Fiscal Management Principles

(1) The Government shall take appropriate measures to eliminate the revenue deficit and contain fiscal deficit and outstanding debt to sustainable levels. (2) The Government shall be guided by the following fiscal management principles, namely : - (a) to maintain State Government debt at prudent and sustainable level; (b) to manage guarantees and other contingent liabilities prudently, with particular reference to quality and level of such liabilities; (c) to ensure that borrowings are used for productive purposes and accumulation of capital assets, and are not applied to finance current expenditure; (d) to ensure that policy decisions of the Government have due regard to the financial implications on the future generations; (e) to ensure a total integrity of the tax system by minimizing special incentives, concessions and exemptions; (f) to pursue tax policies with due regard to economic efficiency and compliance costs; (g) to pursue non-tax policies with due regard to cost recovery and equity; (h) to pursue expenditure policies that would provide impetus to economic growth, poverty reduction and improvement in human welfare; (i) to build up a revenue surplus for use in capital formation and productive expenditure; (j) to ensure maintenance of the physical assets of the Government; (k) to maintain transparency of disclosing sufficient information to allow public to scrutinize the state of the public finances; (l) to minimize fiscal risk associated with management of public sector undertakings and the utilities providing public goods and services; (m) to manage the discharge of liabilities in accordance with the annual budget; (n) to formulate realistic and transparent revenue proposals and minimize deviations during the course of the year.