Fiscal Management Targets

(1) In particular and howsoever to the generality of the foregoing provisions, the Government shall, - (a) ensure revenue balance beginning from the year 2011-12; (b) reduce the fiscal deficit to 3.5 percent of the estimated Gross State Domestic Product in each of the financial year starting 2010-11 and reduce the fiscal deficit to not more than three percent of the estimated Gross State Domestic Product by 31st March 2014 and adhere to it thereafter, fiscal deficit targets thereafter shall be as follows, namely :- (i) Fiscal deficit be anchored to an annual limit of 3 percent of Gross State Domestic Product. The flexibility of 0.25 percent over and above this for any given year is permissible if debt-Gross State Domestic Product ratio is less than or equal to 25 percent in the second preceding year. (ii) An additional borrowing limit of 0.25 percent of Gross State Domestic Product in a given year is permissible if the interest payments are less than or equal to 10 percent of the revenue receipts in the second preceding year. (iii) The two options under these flexibility provisions can be availed either separately, if any of the above criteria is fulfilled, or simultaneously if both the above stated criteria are fulfilled. Thus, a maximum fiscal deficit up to 3.5 percent of Gross State Domestic Product limit is permissible in any given year. (iv) The flexibility in availing the additional limit under either of the two options or both will be available if there is no revenue deficit in the year in which borrowing limits are to be fixed and the immediate Preceding year. (v) If any sanctioned borrowing limit of 3 percent of Gross State Domestic Product in any particular year is un-utilised, then the un-utilised borrowing amount (calculated in rupees) can be availed in the following year but up to fiscal year 2019-20. (c) cap the total outstanding guarantees within the specified limit, under the Sikkim Government Guarantees Act, 2000 (21 of 2000); (d) reduce debt stock to 19.04 % of the Gross State Domestic Product (GSDP) within a period of (10) ten years commencing from the year 2010-2011 and ending on 2019-20, in the manner as mentioned below:- Maximum debt stock as per centum of Gross State Domestic Product (GSDP) 2010-11: 68.40 2011-12: 65.20 2012-13: 62.10 2013-14: 58.80 2014-15: 55.90 2015-16: 20.63 2016-17: 20.00 2017-18: 19.66 2018-19: 19.32 2019-20: 19.04 Provided that revenue deficit and fiscal deficit may exceed the limits specified under this section due to ground or grounds of unforeseen demands on the finances of the Government due to national security, calamity of national proportion and any other exceptional grounds as the Government may specify, subject to the condition that the excess beyond limits of fiscal responsibilities does not exceed the actual fiscal cost that can be attributed to the calamities; Provided further that the ground or grounds specified in the above proviso shall be placed before the Legislative Assembly as soon as may be after the same occur, in the course of the fiscal year in which such deficit may exceed the aforesaid limits, with an accompanying report stating the extent of excess and reasons thereof.