The Assam Local Self-Government Fiscal Responsibility Act, 2011

Regis tered No. 768/97 ^Tdt f A THE ASSAM GAZETTE EXTRAORDINARY ZTT'3’ TH T PUBLISHED BY THE AUTHORITY •T? 297 f W p , W N K , 6 ® W , 2011, 15 W , 1933 (*1^) No. 297 Dispu r, Tuesday, 6th September, 20 11 ,15th Bhadra, 1933 (S.E.) GOVER NMENT OF ASSAM ORDERS BY THE GOVERNOR LEGISLATIVE DEPARTMENT :: LEGISLATIVE BRANCH NOTIFICATION The 6th September, 2011 No.LGL. 58/2009/60 The following Act of the Assam Legislative Assembly which received the assent of the Governor is hereby published for general information. ASSAM ACT NO. XX OF 2011 (Received the assent of Governor on 4th September, 2011) THE ASSAM LOCAL SELF-GOVERNMENT FISCAL RESPONSIBILITY ACT, 2011. 1992 THE ASSAM GAZETTE EXTRA ORDIN ARY SEPTEMBER 6 2011 AN ACT Preamble Short title, extent and commencement Definitions to provide for the responsibi lity of Local Self-Governments to ensure best practice of prudent and financ ial management of their funds, in order' to enhance the- scope for improving social and physical infrast ructure and human development, facilitate citizen ’s partic ipation and transparency, adopt appropriate systems for fostering grea ter transparency in fiscal operations with the use of a medium term fiscal framework, and for matte rs connected therewith or inciden tal thereto; - Whereas i t is expedient to provide for the responsibility o f Local Self-Governments to ensure best practice of prudent and financial management of their funds, in orde r to enhance the scope for improving social and phys ical infras tructure and human development, facilitate citizen’s partic ipation and transparency, adopt appropriate system s for fostering g reater transparency in fiscal operations with the use of a medium term fiscal framework, and for matters connected therewith or incidental thereto; It is hereby enacted in the Sixty-second Year of the Republic of the India as follows: - 1. (1) This Act may be called the Assam Local Sclf-Govemmeht Fiscal Responsibili ty Act, 2011. (2) I t extends to the Local Self-Governments constituted under Part IX and IX-A of the C onstitu tion o f India as may be notified by the State Government from time to time. (3) It shall come into force on such date as the State Government may, by noti fication in the Official Gazette , appoint. .2. In this Act, unless the context otherwise requires, - (a) “Local Self-Government Fund” means the revenue administered by Panchayati Raj Institutions and Urban Local Bodies constituted under Part IX and IX-A o f the Constitution of India and created by the State Government for Panchayats at the District, Intermediate and Vil lage leve ls in terms of Article 243H (d) of the Constitution and for Municipalities in terms o f Article 243X (d) of the Constitution; (b) “Local Self-Government” means the Panchayati Raj Institutions and Urban Local Bodies constituted under Part IX and IX-A o f the Constitu tion o f India; (c) “account ing standard” means such accounting standards i n respec t of Local Self-Governments, as may be prescribed; (d) “annual budget” means the budge t placed before the Local Self- Government concerned as pe r the relevant Acts or the rules made thereunder; (e) “budget variance” means the difference between the budgeted amount and the actuals for the financial year; (f) “Control ling Authority” means any officer appointed as controlling authority by the State Government for the purpose of this Act and different controlling authorities may be appointed in respect of differen t Local Self-Governments; (g) “current year” means the year preceding the year for which budget and Medium Term Fiscal Plan (MTFP) being presented; (h) “fiscal indicators” means such measures as may be prescribed, for evaluation of fiscal posit ion o f Local Self-Governments; A -_____ THE ASSAM GAZETTE. EXTRAORDINARY SEPTEMBER 6.2011 1993 Medium Term Fiscal Plan Financial Management Principles (i) “previous year” means the year preceding the current year; 0) “State Goveirsnisasi'* means the State Government of Assam in the Finance Department. 3. (1) There shall he prepa red in each f inancial year a Medium Term Fiscal Plan along with the annual budge t in respect o f every Local Self- Government and shall be rubmit ted for approval of the concerned authority o f the Local Self-Government. (2) The Medium Term Fiscal Plan shah set forth a f ive-year rolling target for the fiscal indicators with spec ification of under lying assumptions. (3) In par ticula r and without jy ejudtce to the provisions contained in sub­ section (2), the Medium Term. Fiscal Plan shall include an assessment of sustainability rela ting to, - (a) the balance be tween revenue receipts and revenue expenditures; and (b) .the use of capital receip ts including borrowings for generat ing produc tive assets, (4) The Medium T enn Fiscal Plan shall, inter alia, contain, - (a) the med ium term fiscal objectives o f the Local Self-Government; (b) the mission, objectives and goals of the Local Self-Government; (c) an eva luation of the performance of the fiscal indicators in the previous yea r vis-a-vis the targets sec out earl ier, and the likely performance in the current year as per revised estimates; (d) a statement on recent trends and future prospects for growth and development affec ting fiscal pos ition of the Local Self- Government; (e) the strategic priorities o f the Local Self-Government in the fiscal area for the ensuing financial, year; (f) the policies o f the Local Self-Government for the ensuing financia l year relating to expenditure, borrowings and other liabilities, lending and investments and all such activities which have potential budgetary implications and the key fiscal measures and targets pertaining to each o f these; (g) an evaluation as to ~cw the cunei it polic ies o f die Local Self- Government are in conformity vith the financial management principles set cut in sec tion 4 and the fiscal objectives set out in the Medium Term Fiscal Plan; (h) a clear linkage cf the physical and financial targets; (i) the key performance areas and corresponding performance indicators in as much quantitative detail as possible. (5) The Medium Term Fiscal P lan shall be the source document for the prepara tion of the annual budget and shall address the prime needs of the ci tizens a s relevant to the specif ic Local Self-Government such as water supply, construction of road, education, public health, solid waste management and the like. (6) The Medium Term Fiscal Plan shall have a functional focus and provide for backend modalities such as fund based accounting system (FBAS), computerization and a realistic and transparent budgeting process. (7) The Medium Term Fiscal Plan shall be in the form as prescribed in Schedule-I. 4. Every Local Self-Gc vemres'-t shall be guided by the following financia l management principles, rnt sel y.- (a) ensuring transparency m all stages o f policy making and implementation; (b) introducing performance linked budget polic ies; (c) providing for effective s ad sustained fiscal monitor ing systems; (d) introducing robust financial management principles; (e) maintain ing Local Self-Government’s debt at prudent levels; (f) managing guarantees and other contingent liabilities prudently , with particular reference to the quality and level of such liabi lities; (g) ensuring that policy decisions c f the Local Self-Government have due regard to the ir current financial pos ition and the financial implications on future generations; 1994 THE ASSAM GAZETTE. EXTRAORDINARY. SEPTEMBER 6, 2011 Measures for fiscal transparency Measures to enforce Fiscal Discipline (h ) adoptin g the accounting frame work for Local Self-Governments pres cribe d by Comptr oller an d Aud itor General of India; (i) ensuri ng that borrowings are used for produ ctive purposes and accum ulation of capital assets , and are not applie d to finance current expenditure; (j) purs uing tax policie s with due regard to econom ic efficiency and ' compliance costs; (k ) purs uing fiscal po licies with due re gard to co st recov ery and equity; (l) pursu ing expenditu re polic ies that wou ld provid e impetus for economic growth, pover ty reduc tion and improve ment in human welfare; (m ) ensu ring that physical asse ts o f the Local Self-Governm ent are prope rly maintained; • (n) disclo sing suffici ent inform ation t o allow the pu blic to scrutinize the condu ct of fiscal policy and the state o f Local Self-Government finances; (o ) ensur ing that t he Local Self-Go vernme nt uses resource s in ways that give bes t valu e fo r money, and also ens ure th at pu blic assets are put to bes t possible use; (p) mana ging expenditure con sistent with the level o f revenue generated; (q) ' formula ting budge t in a rea listic and object ive m anner w ith due regar d to the general economic o utloo k an d rev enue prospe cts, and m inimize devia tions during the cour se o f the year; (r) ensuring collection o f dues an d taxe s in an expeditiou s manner; (s) ensur ing dis charge o f current liabilities in a timely manner, (t) adopting appropria te tech niques f or measur ing th e cost of file services provi ded b y the Local Self- Gov ernm ent 5. (1 ) The Local Self-Go vernme nt shall take suitable measures to ensure greater transpa rency in its fisca l operati on and in the preparation o f the annual budget . For thi s purp ose every Local Self-Government shall ensure prep arati on and finaliz ation of an nua l’budget for each financ ial y ear com mencing from 1st April and en ding o n 3 1st March. (2 ) Prov ision shall b e ma de fo r meetings at su ch i ntervals and»with citizen forum s as may be pr escri bed t o revie w th e operations and finances off the L ocal Self-Governmen t. (3 ) In particu lar, and without preju dice to the genera lity o f the foregoing provis ions, Local Self-Go vernme nt shall, a t the time o f presentation o f the annual budget , disclose in a statem ent in such form as may be presc ribed , - (a ) signif icant changes in the accoun ting standard s, policies and practic es affecting or likely to affec t the computat ion of fiscal indicators; (b ) as far as practicab le and consist ent with protect ion of public intere st, th e co ntingent liabil ities created by way o f guarantees an d the actua l liabili ties a rising o ut o f execution o f works b y external agencies whe re liabi lity fo r repaym ent is on the Lo cal Self-Government; (4 ) The State Govern ment shall ensure tha t such conting ent liabilities are commu nicated to th e con cerned L ocal Self-Gov ernment so that it shall mak e suffic ient prov ision in its budget . 6. With a view to ensurin g time ly dischar ge o f current liabilitie s special ly paym ent o f salaries t o th e emp loyees, - (i) the Local Self-Gove rnment shall give appoin tment only against posts sanction ed by the State Govern ment and is vac ant and also with laid down rules, procedur es an d orders; (ii ) No new pos t shall be created withou t the prior concurrence of t he State Government; (ii i) the Local Self-Gove rnment s hall n ot ma ke m ore than one appoint ment against one vaca nt post and shall not mak e appointm ent on leave vacancy and vacan cy aga inst s uspended employee; (iv ) the letter of ap pointm ent against any vaca nt post shall contain the identit y o f the post in the m anner as ma y be prescribed; THE AS SA M GA ZE TT E. EXT RAORDIN ARY. SE PT EM BE R 6. 20 11 19 95 (v ) the select list prepared for fresh appointment against vacant post or pos ts shall contain names o f persons equal to the numb er of vacant posts notif ied at t he time o f cal ling for applications for filling up t he posts; (v i) the Local Self-Government shall not regularize or upgrade any per son again st vac ant pos t without the sanction o f the State Government; (v ii) before awarding for execut ion of any w ork and rendering any supply of mater ials and services which create liability on the Local Self- Government, the authorities of the Local Self-Government exercising delega ted financial power shall firs t issue ad m in is t r a t iv e approval or financia l sanction for the wo rk or the orde r o f supply a s th e case may be, in compliance with the existi ng rules , procedures and guidelines and furthe r rules, proced ures and guidelines tha t may be prescribed from time to time; (vi ii) before awarding the settlem ent of Ha ts, Markets, Fisheries , Ghats or any othe r facility of the Local Self-G overnm ent for revenue earning the laid down rules, procedures and guidelines and further rules, procedure s and guidelines tha t may be prescribed from time to time, shall b e followed; (i x ) the Local Self-Government shall main tain a regis ter of assets and liabil ities and all documents year wise , as prescr ibed under the concerned Acts and the ru les framed thereunde r. M easu re to 7. ( 1 ) The State Government Aud it (Loc al Fun d) shall enforce compliance enf orce with the provisions o f this Ac t and the ru les m ade t hereunder, com plia nce to (2 ) The State Governm ent Aud it (Loc al Fun d) may oversee the this Act compliance and a suitable mech anism may be notified by the State Government regarding the submission of period ical rev iew reports. (3 ) The State Governm ent shall ensure tha t the Local Self-Government shall comply with the prov ision s o f the releva nt Ac t and the rules relating to budget and the budg et p repar ed is in accordan ce with the Medium Term Fiscal P lan alrea dy approved and variations, if any, are explaine d. (4 ) The L ocal Self-Government shall p repare a budget variance report and submit it to the Controlling Authority with in such time and in such* , form as may be prescribed. (5 ) The Local Self-Government shall prep are receip ts and payments accoun t, income and expend iture accoun t and a balance sheet as may he prescribed. (6 ) Aud it o f accounts o f the Local Se lf-Gove rnment shall be conducted by the audit or appointed under th e relevan t Acts an d the R ules and orders , issue d thereunder by the concerned author ity and the report shall be subm itted to the concerne d authori ties w ithin the time st ipulated. (7 ) The Controlling Author ities shall b e respo nsible to ens ure st rict follow up actio n on the audit reports by the Loc al Self-Government and slackness, if any, notice d i n this beh alf shall be reporte d to the State Government for appropriate ac tion against the Local Self-Government in default. (8 ) The State Government may, by notification, constitu te a Local Self- Government Fund Aud it Overseeing Autho rity comprising of such officers and having such powers as may he specified in the notification. The Local Self-Go vernme nt Fund Audit Overseeing Authority shall submit to the State Govern ment periodical report on compliance to audit reports by the Local Self-Government authority, as m ay b e prescribed. (9 ) The Assam Legislati ve Assem bly may by notification, constitu te a Local Self-Government Fund Accou nts Committee with similar powers and functions as tha t o f Public Accou nts Committee o f the Assam Legis lative Assem bly to oversee the outstanding audit ‘paras relating to non-compliance o f this Act. (1 0 ) The State Government may withh old release of fu nds to any local self-government authority which fails to furnish accounts to the concerned authority within six month s from the end o f the financia l year. 1996 _ TH E ASS AM GA ZETTE. EXT RAO RDINAR Y, SEPlEJVJLBttKO. z u n (11) The Local Self-Government shall introduce and strengthen , appropria te internal audit measures and sustainab le computer ization programme us ing appropriate technology. FabUcation of financial document and annual report Offences and Penalties Power to make rules 8. (1) Every Local Self-Government shall publish the Medium Term Fiscal Plan (MTFP), the annual budge t, annua l accounts and the annual report together with the certified annual accounts in such manner as may be prescribed. (2) Every Local Self-Government shall, w ithin six months from the end of the financia l year submit a copy o f its annual report together w ith the certified annual accounts to the State Government and the State Government shall cause the annual report together w ith the certified annual'accounts to be laid, a s soon as may be they are received, before the House o f the State Legislative Assembly. 9. (1) Whoever violates any one or more of the provisions of section 6 shall commit an offence which shall be punishable with rigorous imprisonment for a term which may extend to three years. (2) Whoever causes financial loss to the authority willfully and with malaf ide intention , by under assessment or under realizations of revenue due to the Local Self-Government or by incurring unauthorized expenditure shall commit an offence which shall be punishable with rigorous imprisonment fo r a term which m ay extend to three years and / o r recovery of the amount of financial loss with interest. (3) A person who abets any o f the offences as aforesaid shall be liab le fo r the sam e punishment as provided for the offence. (4) Notwithstanding anything contained in the Code o f Criminal Procedure, 1973 (Assam Act, No.2 of 1974), the offences committed unde r this Act shall be treated as cognizable o ffen cesto be triable by a Magistrate not lower in the rank than a Judicial Magistrate of Firs t Class. 10. (1) Hie State Government may, by notification in the Off icial'Gazette and afte r previous publication, make rules for carrying out all or any of the' putposes of this Act. (2) All rules made by the State Government under this Act shall, as soon as may be after they are made, be laid before Assam Legislative Assembly, while it is in session for a tota l period of not less than fourte en days, which may be comprised in one session or in two or more success ive sessions, and shall, unless some later date is appointed, take effec t from the date o f their publication in the Officia l Gazet te subjec t to such modi fications or annulments as the Assam Legis lative Assembly may, during the said period agree to make, so however, that any such modif ication or annulment shall be withou t prejud ice to the validity of anything previously done thereunder. Protection of 11. action taken in good faith Application of 12. other laws No suit, prosecu tion or othe r legal proceedings shall lie agains t the State Government, any Local Self-Government or any officer or servant or any person acting under the direction of the State Government or Local Self-Government in respect o f anything done or intended to b e done in good faith under this Act or any rule or order made ther eun der : Provided that before declaring any such action to have been done in good faith as aforesaid, the approval of State Government shall be obtained. The provisions o f this Act shall be applicable in addition to the provis ions of any other law for t he time being in force, to the exten t they are not inconsistent with the provis ions of this Act a id the provisions of this Act shall have effec t notwithstanding anyth ing contra ry contained in any other law for the time being in force. T H E A S S A M G A Z E T T E . E X T R A O R D IN A R Y SE P T E M B E R 6 . 2011 1997 Remo val o f 13. I f any d ifficulty arises in givi ng effec t to the provisions o f this Ac t, thediff icul ties State Governm ent may by order, published in the O ffic ial G azette, asthe occas ion may require, do anythin g, whic h appears to it to benecessary to rem ove the d ifficu lty :Provided that no order shall be ma de after the expiry o f a period o f two years fr om the date o f commencement o f this Act. Schedule - 1 [See Section 3 (7)] (F ORM FO R P R EPA R A TIO N AN D S U B M IS SI O N O F M E D IU M T ER M FI SC A L P LA N U N D E R S ECT IO N 3) FIS C A L IN D IC A T O R S F Y F Y F Y F Y F YA . R even ue A cc ou nt1. Tax Revenues (Details to be indicated)£ LJ S2. N on-T ax Revenues (Details to be indicated) $(i)(ii) -3. P lan Grants from the State Govt.(Details to be indicated) * 4- 4. Non-Plan Grants from the State Govt. (Details to be indicated)5. Plan Grants from the Centre.(Details to be indicated)6. No n-Plan Grants from the Centre (Details to be indicated)7. Total Revenue R ecei pts (1 to 6 )8. Revenue Expenditure (9+10)9. Plan Expenditure10. Non-Plan Expenditure (11 to 16)11. Salary12. Wages13. Interest Payment14. Pension15. Maintenance16. Others17. Year- End Debt Outstanding (a+b)(a) Loan from the State G ov t.(i) Principal Amount Outstanding(ii) Interest Overdue(b ) Loan Outside the State Go vt.(i) Principal Amount Outstandin g X(ii) Interest Overdue18. Year-end Go vt . Guaranteed Debt Outstanding (i+ii)(i) Principal Amount Outstanding(ii) Interest Overdue s THE ASSAM GAZETTE. EXTRAORDINARY. SEPTEMBER 6, 2011________ : B. Capital Account 1. Capitol Outlay 2. Disbursement of loans and advances 3. Recovery o f loans and advances 4. Other Capi tal Receipts C. Revenue Defici t (-)/ Surplus (+) D. Fisca l Defici t (-)/ Surplus (+) E. Revenue Defici t as % o f Revenue Receipt F. Revenue Deficit as % GSDP G. Fiscal Deficit as % o f GSDP H. Debt Stock as % o f GSDP MO HD. A. HA QU E, Secretary to the Government o f Assam, Legis lative Department, Dispur. GUW AHAH - Printed and published by the Dy. Direc tor (P&S) Directorate of Ptg. and Sty., Assam Guwahati-21 (Ex-Gazette) No. 593-6004-310-6-9-2011.