West Bengal Fiscal Responsibility And Budget Management Act, 2010

No: 14 Dated: Jul, 30 2010

THE WEST BENGAL FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT ACT, 2010.

West Bengal Act XIV of 2010

    An Act to provide for the responsibility of the State Government to ensure prudence in fiscal management and fiscal stability by progressive elimination of revenue deficit, reduction in fiscal deficit and prudent debt management consistent with fiscal sustainability, greater transparency in fiscal operations of the State Government and conduct of fiscal policy in a medium-term framework and for matters connected therewith or incidental thereto.

    WHEREAS it is expedient to provide for the responsibility of the State Government to ensure prudence in fiscal management and fiscal stability by progressive elimination of revenue deficit, reduction in fiscal deficit and prudent debt management consistent with fiscal sustainability, greater transparency in fiscal operations of the State Government and conduct of fiscal policy in a medium-term framework and for matters connected therewith or incidental thereto.

    It is hereby enacted in the Sixty-first Year of the Republic of India, by the Legislature of West Bengal, as follows:-

1. Short title and commencement:- (1) This Act may be called the West Bengal Fiscal Responsibility and Budget Management Act, 2010.

(2) It shall come into force on such date, or shall be deemed to have come into force on such date, as the State Government may, by notification in the Official Gazette, appoint.

2. Definitions:- In this Act, unless the context otherwise requires,—

(a) "budget" means the annual financial statement laid before the West Bengal Legislative Assembly under article 202 of the Constitution of India;

(b) "current year" means the financial year preceding the financial year for which the budget and medium term fiscal policy are being presented;

(c) "financial year" means the year commencing from the 1st day of April and ending on the 31st day of March next following;

(d) "fiscal deficit" means the excess of total disbursements (net of debt repayments) over total revenue receipts, recovery of loans and non-debt capital receipts, during a financial year;

(e) "fiscal indicators" means such indicators as may be prescribed for evaluation of the fiscal position of the State Government;

(f) "State Government" means the Government of West Bengal;

(g) "medium-term fiscal policy" means the policy drawn up by the State Government for a period of five years from the financial year on which this Act shall come into force with the objectives of progressively eliminating the revenue deficit;

(h) "prescribed" means prescribed by rules made under this Act;

(i) "previous year" means the year preceding the current year,

(j) "revenue deficit" means the difference between total revenue expenditure and total revenue receipts (TRR);

(k) "State" means the State of West Bengal;

(1) "total liabilities" means the liabilities under the Consolidated Fund of the State and the Public Account of the State and includes the borrowings by the public sector undertakings and the special purpose vehicles and other equivalent instruments including guarantees where the principal and/or interest are to be serviced out of the State budgets;

(m) "total revenue receipts (TRR)" includes State's own revenue receipts (both tax and non-tax) and current transfers from the Central (comprising grants and States' share of Central taxes);

(n) "triggers" means the intra-year bench marks on deficit;

(o) "Committee" means the Public Expenditure Review Committee constituted under sub-section (1) of section 6.

3. Fiscal policy statement to be laid before West Bengal Legislative Assembly:- (1) The State Government shall lay in every financial year before the West Bengal Legislative Assembly along with the budget, a medium-term fiscal policy statement and a fiscal policy strategy statement.

(2) The medium-term fiscal policy statement shall set forth in such form as may be prescribed, the fiscal management objectives of the State Government and three years' rolling targets for fiscal indicators with specification of underlying assumptions.

(3) In particular and without prejudice to the provisions contained in sub-section (2), the medium-term fiscal policy statement shall include assessment of sustainability relating to—

(a) the balance between revenue receipts and revenue expenditure;

(b) use of capital receipts including open market borrowing for generating productive assets.

(4) The fiscal policy strategy statement shall be in such form as may be prescribed and shall, inter alia, contain—

(a) policies of State Government for the ensuing financial year relating to taxation, expenditure;

(b) borrowings and other liabilities, lending and investment and such other activities like underwriting and guarantees and activities of Public Sector Undertakings which have potential budgetary implications;

(c) the strategic priorities of the State Government for the ensuing financial year in the fiscal area;

(d) evaluation as to how current policies of the State Government are in conformity with the fiscal management principles as set out in section 4 and the objectives set out in medium-term fiscal policy statement.