KERALA FISCAL RESPONSIBILITY (AMENDMENT) ACT, 2018

Preamble - KERALA FISCAL RESPONSIBILITY (AMENDMENT) ACT, 2018

THE KERALA FISCAL RESPONSIBILITY (AMENDMENT) ACT, 2018

[Act No. 07 of 2018]

PREAMBLE

An Act further to amend the Kerala Fiscal Responsibility Act, 2003.

Whereas, it is expedient further to amend the Kerala Fiscal Responsibility Act, 2003 for the purposes hereinafter appearing;

Be, it enacted in the Sixty-ninth Year of the Republic of India as follows:--

Section 1 - Short title and commencement

?(1) This Act may be called the Kerala Fiscal Responsibility (Amendment) Act, 2018.

(2) It shall be deemed to have come into force on the 1st day of April, 2017.

Section 2 - Amendment of Section 4

In section 4 of the Kerala Fiscal Responsibility Act, 2003 (29 of 2003) (hereinafter referred to as the principal Act), for sub-section (2), the following sub-section shall be substituted, namely:--

"(2) In particular and without prejudice to the generality of the foregoing provision, the Government shall eliminate the revenue deficit completely during the period from 2017-2018 to 2019-2020 and shall,--

(a)      build up surplus amount of revenue and utilise such amount for discharging liabilities in excess of assets;

 

(b)      maintain the fiscal deficit to 3 per cent of the Gross State Domestic Product during the period from 2017-2018 to 2019-2020;

Note:--

(i)       State shall be eligible for additional reduction of 0.25 per cent over and above this, for any given year for which the borrowing limits are to be fixed if the ratio between the Gross State Domestic Product and debt is less than or equal to 25 per cent in the preceding year;

 

(ii)      State may further be eligible for additional borrowing limit of 0.25 per cent of Gross State Domestic Product in a given year for which the borrowing limits are to be fixed if the interest payments are less than or equal to 10 per cent of the revenue receipts in the preceding year;

 

(iii)     If anyone of the above said criteria is fulfilled, the State may utilise the said concessions either separately or if both are fulfilled the said concessions together may be utilized by the State. The maximum ratio between the fiscal deficit and Gross State Domestic Product in a prescribed year may be up to 3.5 per cent to the State accordingly;

 

(iv)    The reductions in availing the additional limit under either of the two options or both will be available to the State only if there is no revenue deficit in the year in which borrowing limits are to be fixed and in the immediately preceding year.

The 'additional fiscal space' availing in such manner shall be utilised for the State share of the Centrally Sponsored Schemes.

(c)      reduce the total debt liabilities of the State in the years of 2017-2018. 2018-2019 and 2019-2020 in the order of 30.40 per cent, 30.01 per cent and 29.67 per cent respectively of the Gross State Domestic Product.".