Regd. No. NW/CH-22 Regd. No. CHD/0092/2018-2020 PUNJAB GOVT. GAZ. (EXTRA), MARCH 5, 2021 1278 (PHGN 14, 1942 SAKA)
EXTRAORDINARY
Published by Authority
CHANDIGARH, FRIDAY, MARCH 5, 2021
(PHALGUNA 14, 1942 SAKA)
PUNJAB VIDHAN SABHA SECRETARIAT
NOTIFICATION
The 5th March, 2021
No. 9-PLA-2021/11.- The Punjab Fiscal Responsibility And Budget
Management (Amendment) Bill, 2021 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. 9-PLA- 2021
THE PUNJAB FISCAL RESPONSIBILITY AND BUDGET
MANAGEMENT (AMENDMENT) BILL, 2021
A
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-
second Year of the Republic of India as follows:-
( 1278 )
PUNJAB GOVT. GAZ. (EXTRA), MARCH 5, 2021
1279
(PHGN 14, 1942 SAKA)
1. (1) This Act may be called the Punjab Fiscal Responsibility And
Short title and Commencement.
Budget Management (Amendment) Act, 2021.
(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
Amendment in Section 4 of Punjab Act 11 of 2003.
substituted, namely:-
"(a) contain fiscal deficit as per cent of Gross State Domestic Product
(GSDP) at 4.0 per cent (four per cent) and an additional 1.0 per cent
(one per cent) in the financial year 2020-2021, subject to reforms as
laid hereunder, and maintain thereafter at 3.0 per cent (three per
cent) or as allowed by Government of India, from time to time. The
additional 1.0 per cent (one 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 reforms;
(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);".
1280 PUNJAB GOVT. GAZ. (EXTRA), MARCH 5, 2021
(PHGN 14, 1942 SAKA)
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 had 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. Out of this additional 2.0 per cent, 0.5 percent was
unconditional and the remaining 1.5 per cent was 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 would be 0.25 per cent of GSDP totaling
to 1 per cent. The remaining borrowing limit of 0.50 per cent was to be conditional
to the undertaking of at least 3 out of the above-named reforms.
Further, to compensate the shortfall arising out of GST implementation,
the Government of India had offered two borrowing Options-I and II to the
States, out of which, State of Punjab, had opted Option-I. Option-I has given
permission to the States to borrow the final installment of 0.5% (originally
intended as a bonus for completing at least three of the four specified reforms)
even without meeting the pre-conditions.
The State Government has accepted the decision of the Government of
India to contain its fiscal deficit as percent of Gross State Domestic Product
(GSDP) at 4.0 per cent and an additional 1.0 per cent in the financial year
2020-2021, conditional to above-mentioned reforms and maintain thereafter at
3.0 per cent (three per cent) or as allowed by Government of India from time
to time. Therefore, the State is required to amend its Fiscal Responsibility and
Budget Management Act, 2003 accordingly to avail the benefit of additional
borrowing. Hence this amendment/enactment.
MANPREET SINGH BADAL,
FINANCE MINISTER, PUNJAB.
PUNJAB GOVT. GAZ. (EXTRA), MARCH 5, 2021
1281
(PHGN 14, 1942 SAKA)
FINANCIAL IMPLICATION
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 had 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. The State of Punjab had 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. Out of this additional 2.0 per cent, 0.5 percent was unconditional
and the remaining 1.5 per cent was 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 would be 0.25 per cent of GSDP totaling
to 1 per cent. The remaining borrowing limit of 0.50 per cent was to be conditional
to the undertaking of at least 3 out of the above-named reforms.
2. Further, to compensate the shortfall arising out of GST implementation,
the Government of India had offered two borrowing Options-I and II to the
States, out of which, State of Punjab, had opted Option-I. Option-I has given
permission to the States to borrow the final installment of 0.5% (originally
intended as a bonus for completing at least three of the four specified reforms)
even without meeting the pre-conditions.
3. 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 and in the coming year(s).