PUNJAB GOVT. GAZ. (EXTRA), MARCH 5, 2021

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( 1278 )

Regd. No. NW/CH-22

Regd. No. CHD/0092/2018-2020

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

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:-

PUNJAB GOVT. GAZ. (EXTRA), MARCH 5, 2021

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(1)

This Act may be called the Punjab Fiscal Responsibility And

Budget Management (Amendment) Act, 2021.

(2)

It shall come into force at once.

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 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);”.

Short title and

Commencement.

Amendment in

Section 4 of

Punjab Act 11 of

2003.

PUNJAB GOVT. GAZ. (EXTRA), MARCH 5, 2021

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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 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:-

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 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

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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.