PUNJAB GOVT. GAZ. (EXTRA), NOVEMBER 22, 2023

(AGHN 1, 1945 SAKA)

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( 4795 )

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

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) This Act may be called the Punjab Fiscal Responsibility and

Budget Management (Amendment) Act, 2023.

EXTRAORDINARY

Published by Authority

CHANDIGARH, WEDNESDAY, NOVEMBER 22, 2023

(AGRAHAYANA 1, 1945 SAKA)

Short title

and

commencement.

PUNJAB GOVT. GAZ. (EXTRA), NOVEMBER 22, 2023

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4796

(2)

It shall come into force on and with effect from the date of

its publication in the Official Gazette.

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

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.”

Amendment in

Section 4 of

Punjab Act 11

of 2003.

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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.

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.

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

PUNJAB GOVT. GAZ. (EXTRA), NOVEMBER 22, 2023

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CHANDIGARH :

RAM LOK KHATANA ,

THE 22^ND NOVEMBER, 2023 SECRETARY.

FINANCIAL IMPLICATION