PUNJAB GOVT. GAZ. (EXTRA), NOVEMBER 22, 2023 4795
(AGHN 1, 1945 SAKA)
EXTRAORDINARY
Published by Authority
CHANDIGARH, WEDNESDAY, NOVEMBER 22, 2023
(AGRAHAYANA 1, 1945 SAKA)
PUNJAB VIDHAN SABHA SECRETARIAT
NOTIFICATION
The 22nd November, 2023
No. 18-PLA-2023/59.–The Punjab Fiscal Responsibility and Budget
Management (Amendment) Bill, 2023 in 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. 18-PLA-2023
THE PUNJAB FISCAL RESPONSIBILITY AND BUDGET
MANAGEMENT (AMENDMENT) BILL, 2023
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-
fourth Year of the Republic of India as follows:-
1. (1) This Act may be called the Punjab Fiscal Responsibility and
Budget Management (Amendment) Act, 2023.
Short title and commencement.
( 4795 )
4796 PUNJAB GOVT. GAZ. (EXTRA), NOVEMBER 22, 2023
(AGHN 1, 1945 SAKA)
(2) It shall come into force on and with effect from the date of
its publication in the Official Gazette.
2. In the Punjab Fiscal Responsibility and Budget Management Act, 2003,
in section 4,-
(i) in sub-section (2), for clauses (a), (b) and (c), the following
Amendment in Section 4 of Punjab Act 11 of 2003.
clauses shall be substituted, namely:-
"(a) contain fiscal deficit as per cent of Gross State Domestic
Product (GSDP) in vogue in that particular year as
recommended by the Central Finance Commission and
as allowed by the Government of India;
(b) attain revenue deficit as per cent of Gross State
Domestic Product (GSDP) in vogue in that particular
year as recommended by the Central Finance
Commission and as allowed by the Government of India;
(c) contain debt as per cent of Gross State Domestic
Product (GSDP) in vogue in that particular year as
recommended by the Central Finance Commission and
as allowed by the Government of India; and"; and
(ii) for sub-sections (5) and (6), the following sub-sections shall
be substituted, namely:-
(5) Notwithstanding anything contained in sub-section (2),
the revenue deficit and fiscal deficit may exceed the
limits, specified by the Government of India from time
to time, on the ground of unforeseen demands on the
finances of the State Government arising out of
internal disturbance or natural calamity or national
security or such other exceptional ground as the State
Government may specify.
(6) In case the revenue deficit and fiscal deficit specified
in sub-section (2), cannot be met due to the ground
specified in the Sub-section (5), the State Government
shall identify the net fiscal cost of the calamity and
such cost would provide ceiling for extent of non-
compliance to the specified limits."
PUNJAB GOVT. GAZ. (EXTRA), NOVEMBER 22, 2023 4797
(AGHN 1, 1945 SAKA)
STATEMENT OF OBJECTS AND REASONS
Government of India communicates Annual Borrowing Ceiling every
year to States, mandating debt allowed as per cent of GSDP and entailing
States to amend their Fiscal Responsibility and Budget Management (FRBM)
Acts accordingly to avail the Annual Borrowing Ceiling.
2. In the financial years 2019-2020, 2020-2021, 2021-2022 and
2022-2023, Government of India had mandated amendment only for clause
(a) in sub-section (2) in Section 4 of the Punjab FRBM Act, which contains
the target of fiscal deficit, whereas, the clauses (b) dealing with Revenue
Deficit target and (c) dealing with Debt to GSDP ratio target remain as
amended in 2011, as Government of India has not mandated any amendments
in these clauses after 2011. Since 2020, debt profile of both Centre and
States was impacted by COVID. The debt saw a substantial increase at
both States and Centre level. Also Government of India is allowing new loan
schemes to States, such as, Scheme for Special Assistance for Capital
Investment; allowing extra borrowing ceiling for contribution to NPS and
considering GST compensation since 2020-21 as loan and not grant.
Consequently, few clauses of Section 4 need alignment.
3. Therefore, the State of Punjab is required to make amendment in
few clauses in its Punjab FRBM Act, 2003 to align them with each other and
to avoid the need of amendment every year. Hence this amendment/
enactment.
HARPAL SINGH CHEEMA
Finance Minister, Punjab 4798 PUNJAB GOVT. GAZ. (EXTRA), NOVEMBER 22, 2023
(AGHN 1, 1945 SAKA)
FINANCIAL IMPLICATION
Government of India communicates Annual Borrowing Ceiling every year to States, mandating debt allowed as per cent of GSDP and entailing States to amend their Fiscal Responsibility and Budget Management (FRBM) Acts accordingly to avail the Annual Borrowing Ceiling.
2. In the financial years 2019-2020, 2020-2021, 2021-2022 and 2022-2023, Government of India had mandated amendment only for clause (a) in sub-section (2) in Section 4 of the Punjab FRBM Act, which contains the target of fiscal deficit, whereas, the clauses (b) dealing with Revenue Deficit target and (c) dealing with Debt to GSDP ratio target remain as amended in 2011, as Government of India has not mandated any amendments in these clauses after 2011. Since 2020, debt profile of both Centre and States was impacted by COVID. The debt saw a substantial increase at both States and Centre level. Also Government of India is allowing new loan schemes to States, such as, Scheme for Special Assistance for Capital Investment; allowing extra borrowing ceiling for contribution to NPS and considering GST compensation since 2020-21 as loan and not grant. Consequently, few clauses of Section 4 need alignment.
3. The proposed amendment in clauses (a), (b) and (c) of sub-section (2); sub-section (5) and sub-section (6) of Section 4 of the Punjab FRBM Act, 2003 will align them with each other, result in eligibility for the Annual Borrowing Ceiling for the State of Punjab, as per the recommendations of central finance commission and as allowed by the Government of India, during the Financial Year 2023-24 and thereafter and will also avoid the need of amendment every year.
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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 : RAM LOK KHATANA , THE 22ND NOVEMBER, 2023 SECRETARY.