PUNJAB GOVT. GAZ. (EXTRA), AUGUST 28, 2020

(BHDR 6, 1942 SAKA)

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( 1039 )

Regd. No. NW/CH-22

Regd. No. CHD/0092/2018-2020

EXTRAORDINARY

Published by Authority

CHANDIGARH, FRIDAY, AUGUST 28, 2020

(BHADRA 6, 1942 SAKA)

PUNJAB VIDHAN SABHA SECRETARIAT

NOTIFICATION

The 28th August, 2020

No. 17-PLA-2020/58.- The Punjab Fiscal Responsibility And Budget

Management (Second Amendment) Bill, 2020 is hereby published for general

information under the proviso to rule 121 of the Rules of Procedure and

Conduct of Business in the Punjab Vidhan Sabha (Punjab Legislative

Assembly):-

Bill No.17-PLA-2020

THE PUNJAB FISCAL RESPONSIBILITY AND BUDGET

MANAGEMENT (SECOND AMENDMENT) BILL, 2020

BILL

further to amend the Punjab Fiscal Responsibility And Budget

Management Act, 2003.

BE it enacted by the Legislature of the State of Punjab in the Seventy-

first Year of the Republic of India as follows:-

(1) This Act may be called the Punjab Fiscal Responsibility And

Budget Management (Second Amendment) Act, 2020.

Short-title

And

Commencement

PUNJAB GOVT. GAZ. (EXTRA), AUGUST 28, 2020

(BHDR 6, 1942 SAKA)

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(2) It shall come into force at once.

2. In the Punjab Fiscal Responsibility and Budget Management Act,

2003, in section 4, in sub-section (2), for clause (a), the following clause shall

be substituted, namely:-

“(a) contain fiscal deficit as per cent of Gross State Domestic

Product (GSDP) at 3.5 per cent (three and a half per cent)

and an additional 1.5 per cent (one and a half per cent) in the

financial year 2020-2021, subject to reforms as laid hereunder,

and at 3.0 per cent (three per cent) in the financial year 2021-

2022 and maintain thereafter. The additional 1.5 per cent (one

and a half per cent) in the financial year 2020-2021 shall be

conditional to the following reforms:-

(i)

Implementation of One Nation One Ration Card System;

(ii)

Ease of doing business reform;

(iii)

Urban Local body/utility reforms; and

(iv)

Power Sector reforms.

The weightage of each reform is 0.25 per cent of GSDP

totaling to 1.0 per cent (one per cent). The remaining borrowing

limit of 0.50 per cent will be conditional on undertaking of at

least 3 out of the above-named reforms;”.

Amendment in

Section 4 of

Punjab Act 11

of 2003

PUNJAB GOVT. GAZ. (EXTRA), AUGUST 28, 2020

(BHDR 6, 1942 SAKA)

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STATEMENT OF OBJECTS AND REASONS

In view of the serious negative impact of the unprecedented COVID-19

pandemic on the resources of State Governments, to strengthen resources in

the hands of State Governments, the Government of India has decided to

provide relaxation in borrowing limits by increasing an additional Borrowing

Limit of up to 2.0 per cent of Gross State Domestic Product (GSDP) for the

year 2020-2021. However, the relaxation in borrowing limits is partly

unconditional to the extent of 0.5 per cent and the remaining 1.5 per cent is

conditional to the implementation of specific State Level Reforms. The reforms

should be implemented before 31st January 2021 to get the additional Market

Borrowing.

The State Government has accepted the decision of the Government of

India to contain its fiscal deficit as per cent of Gross State Domestic Product

(GSDP) at 3.5 per cent and an additional 1.5 per cent in the financial year

2020-2021, conditional to the following reforms:

a) Implementation of One Nation One Ration Card System;

b) Ease of doing business reform;

c) Urban Local body/utility reforms; and

d) Power Sector reforms.

The weightage of each reform will be 0.25 per cent of GSDP totaling to

1 per cent. The remaining borrowing limit of 0.50 per cent will be conditional

to the undertaking of at least 3 out of the above-named reforms.

Consequential amendment of Fiscal Responsibility and Budget

Management Act, 2003 is also a pre-condition for additional borrowing of 2.0

per cent of GSDP for the financial year 2020-2021. Therefore, the State is

required to amend its Fiscal Responsibility and Budget Management Act, 2003

to fulfill the condition of Government of India to avail the benefit of additional

borrowing. Hence this amendment / enactment.

MANPREET SINGH BADAL

FINANCE MINISTER, PUNJAB

PUNJAB GOVT. GAZ. (EXTRA), AUGUST 28, 2020

(BHDR 6, 1942 SAKA)

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FINANCIAL MEMORANDUM

In view of the serious negative impact of the unprecedented COVID-19

pandemic on the resources of State Governments, to strengthen resources in

the hands of State Governments, the Government of India has decided to

provide relaxation in borrowing limits by increasing an additional Borrowing

Limit of up to 2.0 per cent of Gross State Domestic Product (GSDP) for the

year 2020-2021 subject to implementation of specific State Level Reforms.

The State of Punjab has also been allowed an additional borrowing of 2.0 per

cent of Gross State Domestic Product (GSDP) i.e. Rs. 12130.00 crore in

2020-21 over and above its Net borrowing ceiling, which is 3% of GSDP.

However, the relaxation in borrowing limits is partly unconditional to the extent

of 0.5 per cent and remaining 1.5 per cent is conditional to the implementation

of following reforms:

Implementation of One Nation One Ration Card System;

Ease of doing business reform;

Urban Local body/utility reforms; and

Power Sector reforms.

The weightage of each reform shall be 0.25 per cent of GSDP

totaling to 1.0 per cent (one per cent). The remaining borrowing limit of 0.50

per cent will be conditional to the undertaking of at least 3 out of the above-

named reforms.

Further, this additional borrowing of 2.0 per cent of Gross State

Domestic Product is conditional to amendment of State’s FRBM legislation

for the year 2020-21 to this effect.

The proposed amendment in clause (a) of Sub-section (2), of

Section 4 of the Fiscal Responsibility and Budget Management Act, 2003 will

result in additional borrowing of Rs. 12130.00 crore as mentioned above, over

and above 3% of GSDP (Net borrowing ceiling of the State of Punjab

permissible under FRBM Act, 2003), during the Financial Year 2020-21.

______________

The Governor has, in pursuance of clause (1) and (3) of Article

207 of the Constitution of India, recommended to the Punjab Legislative

Assembly, the introduction and consideration of the Bill.

______________

CHANDIGARH

SHASHI LAKHANPAL MISHRA

THE 28th AUGUST, 2020

SECRETARY.

2091/8-2020/Pb. Govt. Press, S.A.S. Nagar