UTTARAKHAND FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT (AMENDMENT) ACT, 2016

UTTARAKHAND FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT (AMENDMENT) ACT, 2016

Preamble - UTTARAKHAND FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT (AMENDMENT) ACT, 2016

THE UTTARAKHAND FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT (AMENDMENT) ACT, 2016

[Act No. 40 of 2016]

[15th December, 2016]

PREAMBLE

An Act Further to amend The Uttarakhand Fiscal Responsibility and Budget Management Act, 2005 to provide amendment in fiscal targets as recommended by the 14th Finance Commission for application revised roadmap for fiscal consolidation and to make fiscal responsibility and budget management process more transparent and comprehensive.

Be it enacted by the Legislative Assembly in the sixty seventh year of the republic of India as follows:-

Section 1 - Short title, Extent and Commencement and extension

(1)     This Act may be called the Uttarakhand Fiscal Responsibility and Budget Management (Amendment) Act, 2016.

(2)     It shall extend to the whole of the State of Uttarakhand.

(3)     It shall come into force on such data as the State Government may, by notification in the official Gazette, appoint in this behalf.

Section 2 - Amendment in Section 2 in the Principal Act

After sub-section (g) of section 2 a new, sub section (h) shall be inserted as follows; namely-

"(h) 'Interest Payment' means the amount Payable other than refund of principal amount on the internal debt of the State Government from the Central Government and on State provident funds and other liabilities in the public account."

Section 3 - Amendment of Section 4 in the Principal Act

Clause (c) of sub section (3) of section-4 in the Principal Act, shall be substituted as follows; namely-

"(b)    (1) The Fiscal deficit targets and annual borrowing limits for the State during the period 2016-17 to 2019-20 are enunciated as follows:-

(i)       Fiscal deficit of the State will be anchored to an annual limit of 3 percent of GSDP. The State, will be eligible for flexibility of 0.25 percent over and above this for any given year for which the borrowing limits are to be fixed if the debt-GSDP Ratio is less than or equal to 25 percent in the preceding year.

(ii)      The State will be further eligible for an additional borrowing limit of 0.25 percent of GSDP in a given year for which the borrowing limits are to be fixed if the interest payments are less than or equal to 10 percent of the revenue receipts in the preceding year.

(iii)     The two options under these flexibility provisions can be availed can be availed by the State either separately, if any of the above criterion is fulfilled, or simultaneously if both the above stated criterion are fulfilled . Thus, the State can have a maximum fiscal deficit GSDP limit of 3.5 percent in any given year.

(iv)    The flexibility for 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 me immediately preceding year.

(2) If the State is not able to fully utilize its sanctioned borrowing limit of 3 percent of GSDP in any particular year during the financial year between 2016-17 to 2018-19 it will have the option of availing this unutilized borrowing amount (calculated in Rs.) only in the following year within the Fourteenth Finance Commission award period of 2017-18 to 2019-20. The amount including unutilized borrowing amount will be limited to 3.5 of GSDP."