The Manipur Fiscal Responsibility and Budget Management Act, 2005

MANIPUR . . - .... ? E?X,TRA o's DIN A R·v. P...,UBLISHEQBY AUTJIQ,f(JTY. • .• . ,1·: -' ..... No. 127 Iinpifal; Monday, A?gust 8, 2005 cs'ravana . 17, 1927) GOVERNMENT OF MANIPUR .. :? SECRETARIAT: LAW & LEGISLATIVE AFFAIRS DEPARTMENT NOTIFICATION .Jmphal, the 8th August, 2005 · No. 2/36/2005-Leg/L.-The following. Act of the Legislature of Manipur "'Jlicb received assent of the Governor of Manipur on . 3Q..7-2()05 is hereby published in the - official Gazette. THE MAN1PUR - FISCAL RESPONSIBILITY AND BUDGET -MANAGEMENT ACT, 2005. (Manipur Act No. 11 of 2005) An Act J«J · pr?.vjde Jor t:lie responsibility of the State Govetn_n1entto' ensure prudence in fiscal management and fiscal s:taoility. by · achieving, . ?ufficie}lt revenue 11:trpih',,r?d-uction in fiscal·deficit, prudentdebt management consistent with _ .. ,: fiwal··&u1tairiability;- greater transparency' in ff?caf:opJratiortsof the Govern­ ment and conduct of ·fiscal policy in ?, medhnh temi fi?? framework and for matters connected th?gwjt,b1.or:incide2'lal thoreto.'' •··. •: ' ::·. o)lt '1it en? "': the Lei:islatut•-of Ma_riip.li-f,; th?,Jj{t_y''?{?t9Year of the Republic of It:i'dia":as:·f6lt6*s'if.....:.· .' ' · · :;:•.' k_,,, ,,Ju.·., ... -.1.. 2 l. Short title, extent and ctt1('ent.--(1)This Act may be called the Manipur Fiscal Responsibility /aii ·., daet Management Act, 2005? 3'f?1Gl?\?le 9-tth?,L?tategN1tl?r -:?,JV! - ·. ?{> i;;?):·>1.f.ij_ (3) It shall come into force ;?3'? date as the State Government may, by notification in the officiaf'di?etto, appoint in this behalf. 2. Definitions.-4in;hliis !':,\c\,?nlesf\lie:O.&?t?i'folherwiserequires- ··--::.. _:•:!.:_:.,-.")?<:·.·\ . ' .. !.. !!.. . ? . .: -? 7-&t (a) "budget" ·rh?Aiis'·the · Annual . Fioal'lcial Statement laid before the +State legislattrre under·· Article ·20r of" the·· Constifiition;;:"": -????-·- ·-- • • • • ? '. -, • • • 'J •• (b) ncurtent ·year'' means" the ffnancial year ' preceding the ensuing y?ar; .· > -:: .:: . ;. :-. ?-- -- ..,,; .·. (c) "ensuing year" moans the financial year for which the budset is being presented; (d) "financial year" means the year beginning on the 1st April and ending on 31st March next following; (e) ''fiscal· deficit" means the excess of total disbursements from the .. · · Consolidated Fund of the State (excluding repayment .. of. debt) . , • . ,- ?- I.'. "f' over the sum of revenue receipts, recovery of loans and non-debt capital receipts into the Fund during a financial year; (0 "fiscal indicators" means such indicators as may be prescribed for evaluation of the fiscal position of the State Government; (g). "fiscal targets'' means the numerical ceilings prescribed. ,in either 'absolutes (in Rupeecrores)or as proportions to the Gross Domestic Product or other magnitudes for the fisca! indicators; (h) "guarantees" means the liabilities undertaken by State Public Sector Undertakings where servicing and repayment liabilities fall on the State Government iu the event of default by the primary borrower; (i) "prescribed'' means prescribed by the rules made under thi! Act; • i :. "- ,. _, V · (j) ''previous year" ?eans ·the year preceding the current ?yea.-;·' ... . . . ? .. - : .... ·\1d · "revenu,i.deficir" means .. !he amount of excess · of revenue :expendi- ,.. Jure ov?r. revenue ·;cceiptsin. a jwap?ial year; ' .r r - .. .? .. ,.. ..4. . ' '• . :: . ..;. (1) "State" means the State of Manipur; (m) "State's. Own Tax Revenue" means ?h?, total, ? r?aQa pf ;jJ(o · ' State elcludi?gthe State's Share in. (;?t;?l '.I'a;o.?;. .· . .J . ; ,/i 3 . --<?) -"?tl\h revenue receipts" .means the S?te's ow,a rev?? r?ipta . (both tax and non-ta?)'and -?u'rr?nt transf?rs fro; .,b(J ? _ ., (comp_ri_siDJgrantsan? ???te:?sµ,re .of CCllt!•lt?es);i. , •• _::::;,i.>D"l {'o>?-·?otlll- liabilities" means the sum of the Iiabilitiea.uader the C?molidan ed Fund of the State, and tho Public Account of the: iSJato.;?,: j? -fiscaf .-in?nagetncntobjectives.c-, The State Government ihall? ;. (a) '.:take appropriate . measures to remain r?verl'fie.;fj<>sitivoanti ')build up: adequate revenudurplus and contain flie:ftscaHi?ficit>tt a- s,?. nable level, and utilize such surplus for discharging- 'the' HabilitiCJ .in excess of the a$1ic,ts or for funding. capit?l- expenditure; . ,....... . ,, ... ,.... ..·, . (b) pursue policies to raise non-tax revenue with regard to cost recovery and equity ; and (c) lay down norms for prioritization of capital expenditure, and pursue expenditure policies that would provide iniP.?tusfor economic growth. 4. Piscal.imanagement principles.c-The State. Government. shall be guided i,y the f'Qilowing . fiscal management principles, namely..:- .. , ... " -- .; ' -(a} ?transparoncrin -setting the ·fiscal policy "Objectivcs?-'"th"tt·;implemon-­ tation or public policy and: the publication -of fiscaJ··information so as to enable the public to· scrutinize tfie condtictJ of fiscal policy and the state of public finances; (b)" stability" . and predictability.. iii liscal pofify· mak1ng-? p'r?s .a?d.in - .. the way the fiscal P?licy impacts the economy; .:. (c) --- r'e:fponsioility-' "in' - the management of. 'piiblic 'firiances/ including -· ': ·fo.tegfitym·'budgel foniulatioi:i;'. ' .. ,; . ?--·./• (d/'rairne?to- ensure th,?f-p??\?/d?ci?1??-?f,''t1i?"sta?eGovernment v-': ha?e . d?e-regarl to . ilieii-'--ti?ncfal'-i?-plic?tio?;on ·_futuregenera- • • • ,I ...... •.: ' • ....i , •• • '. ;. ·. ,.,, ..:. •. J. - . _,. '. - -? '·· tions; and , . .. , (e) efficiency in the design and implementation of the fi? policy . ' and in managing the ·assets ind' liabilities''' ar the ptlblicsector balance sheef. ..:_._,J.- ... ·- __ - Fiscal' 1t0licy_stat-cmcn.t _ to . be laid before. ·the··, Le:gislatitre.-The State -Oovehmlent :shall, ;Ul e_ach,! ,1inancial _y<!a,r?- lay before !}m1.,..-Hoo? of the State .Legislature. the · fQllowillg . statements of fiscal poljcy _ aJong_ with tho annual ·budiet. ·namely:-:- : · · · · · -?· · · · · · · · · .. - . , ... (a) Medium-term Fiscal ?9,li<:Y·•Statement ; and (b) Fiscal Policy· Sftatety Statement. n :?' Medium T?dn • 'pJfcalPbiicy'Sr:ate?ent'...:::(t).11':fir?M?him tlrm Fiscal ? S'tate1nent sbaI'l set fortii' in such f orin as may be' p?scribed, the fiscal management objectives of the 'State; G'overiiiheaii··· an'd :three-y?ar·rolling targets for' ?e Fe•cribed· fiscal fodica1oi51' witk dim· onunoilitidn of' ·tl\e' ,,.ndcrlying assumptions. '. , (2) X.. partic.war and . without. p_rejudjf,C_)P fM, ;P,f.?vj.,i.Qns-9,P!!tai? in ?g?ion (1,), the Me4ium T?on Pis?l P,91icy .. ?W.QlC.Ilt. ll\lall ?cludo tho v?jous c!,Ss?mpt?o? ??ind · tile fiscal i:ncH?tors ? an ?St:Dcnt of sustain- -#ilityrelating · t-o :? . , . (a) ·the balance' between revenue· receipts and revenue expenditure; . (b) the use . of ?apital receipts in?ludi?J.?borrowings .. for . 1cnerating. productive assets; · · ' ' (c) the estimated yearly pension liJ,bilities worked out on actuarial basis; for the next ten years: . . . . Provided that in -case it ·is not possible to cak:niatc the pension liabilities on. actuarial basis during :the ·period of nrst thRo-yoaa :aft« . the coming into fosce qf this Act, the Sta-te Go;v,?t ?y. during. · that . period, estimete the .pension liabjJities -by ?1c,ing forecasts on tho ?s? pf tread jl':011.(tb.rJ!tes. 7. Fiscal policy strategy statement.s-The Fiscal Policy .Stni,tcgy Statement iball be in such form as may be prescribed and shall contain, inler alia, (a) the fiscal policies of. th!' State Government . .ffJfthe ensuing financial . year relating to revenuereceipts, expenditure,borrowings and other liabilities. lending, investments, other contfogent iiabilities, user . tharges on publicgdods/iitmtfesand description: cif otl:ier activitica, . such as . guarantees artd ;activities of p"llblksecforuhdertakings which have potential budgetary implicationa; .. -·· . (b) the strategic _:pr.i.ori?jes?f the . S,?at?Oovernmfnt lD the fiscal area for the ensuing financial year; · (c) the key fiscal measures and the rationale for any major deviation . . , im. 'fiscal measures pertaioiog to re:9crwo::toeeipts. ·stulf;icly.. ,t.tpe,idituro •. .. ,-,boc,towiligs·1and<user cba:r-,ges oa ptiblic ·:gt>O'ds/•llilitiea:;·•and,,, · . . • . . ' : ? - : . : .. ' -- I j ·; .- •••• I ,,t . . . . . f '(d) -an ev?tuatio?bribe current policiesor'tht's1aie·9?v,«r11mint,Y!f??Jis the fiscal management principles set out in section' ,4;· t'he''fiacal objectivei\et• out :iri' the ?etliurif'T?rm 'Pii8i-f Micyfilatement in sub-section 1 of section 6 'anti rftsil?al" targets'' sct·0111 in; section I. f· :: 1?:· Fid"•·ta,o,t, . .-.(?) llhtr.State Ge.vcl'Q·D¥JDt Jn?Y }?tcscrjbe: auchtarscta u may· be 'dee'me1 .. neces?ary for giving effect ,ta- the fiscal JI]aR?gcr:nc:pt ?b??h'?•!r_,;., ?;·hat.?artic??;,.?n?with?ut prcjudi?c:·to the g?ocraiii{'of l h?;i??egoinj Jr.ovisions,. the State. G?:wcrnm?nt,.•halb- (i) · itiive ·· to remain. revenue. surplus; by Jijaking . a. balance in rovcnv. .•.. ·*:· . "receipts arid ,?cnditure acd build URfurt?cI _su1?u?; (li) strive. t6 ;·brini do Wi'l fi?cal' 'deficit to' 3 %' 'of lGr.ogs. State; Domestic n.1bi, d .. u''c-t·', ,:, · rr ,: ..... ;. (iii) limit the amount of outstanding Goverament guarantee?aa per•t?kt provisions of the ?anipur Ceiling on State Government Guarantee, •• J . . -. . . :.· ,. • ' ' ' • • ,· !' / /' ... , Act, 2004; .· . . . . . . . · .. . . - ! . ; . ,.-_\.-; . ' . . . ; ·, ., ' (iv) , follow 'a recruitment a?;-w,g? policy., in ·11:mann? sµ?h th,t tho· total· salary bill ret•Cive to revenue expenditure excluding . intcfest ' • t' • '".'' ,.- .·· I payments and pensions does not exceed .3?,per cent: -? . ·.· . ; '. . . ' ' . ; '.. . '. Provided that revenue surplus may not be able to be maintained or/and fiscal deficit may,?exceed the ·limits specified under this section due to g,rpu?d M t;roundg of unforeseen demands on the finances of the Sta?c;,:Government arising out· of national .security or· namral calamity .,i,ncludiog famine ·relief tr such other exceptional circumstances, beyond the control. of the State. Government Provided further· tha'i a statement iii respect of the: ground or grounds apecificdr.iri tfie . first proviso shall be placed before the· House of. the Legislature, ai··soon a?;;maybe?after such deficit amount exceeds the. aforesaid targets or/ and the. revenue surplus is not maintained. 9. Measures for fisca 1 transparency.s-f l ) The State Government shall take ?mtable.measuresto 'ensure . greate{'frans.parency)n jirf_fiscaloperations and ?nimiz?, as_far ·? prJcticabi?.in . the pu'plic'ii;iteres?,secrecy in. the preparation of the Budget. · ·' · (2) In particular, and without prejudicr;, to the geneq1lity of the foregoing pr?visi?n/tilt ?cifo 'Government iiia1l, at toetime ?:p?tnt10n:ofthe Midget, rl?:i'ite<'(J1scfo?reS'·b'ii · the' ·_following ·. afong·\vit'b detailed information; ·.m suclr'form -"i·?·,1be· ;pr?s,ct?t7d:,.•< ' , , : · . ;;_ · ., .ifrr ·.d .•• ?L::,:i,,T , , · -·.''·rru,H(a)'.!liif£1cals?of l:dtia-hge,1 ftlei, ?griificaii.(·chlln?-.:1 it\'1;1 tbthaecounting ! :,1'. 1oiiadtlairds;iq:1C!JJici·esand· ·prllcUtes::affeict#m,t QT! li4J!i?;'' tq·.ia??? the comput!tion of p)escribe.o. .Jisqal, in4tGa.tor!\; ,4 i 1 -. .. !l . , ·i, ·; ; 7 '!· ?tsf-.dot41lanf ·edfniwi?·;'hf. W.?li.hf'IW"-JS; a?Ei· fW,aµ, ... :had??pc?pvcr­ ?rafts:•avaikxl ',of,, f1091 c:thc ·R??,a4tt?; '.Oii6'di?;,,; :,rlJ i. ,) _, :>i.. t.l{J}'?hVltebcvi!?·· tne State: ·Oo,vernnreht 1.1Hdw.tak«.S•'9 _ , ?Tl ditiGMlly_1i and subUadtfillyrepay"tfie · principal ·it?unt· and/or pay the interQSt of aj.Ytff?? tfp.l_?nt#y,it has t(). r?flect suc_hliability as the borrowingsof the State . . ,.. . . ... • • . ·' :.· .J• ?). ;_:.-: '. '·· 7· ; ' - :-·.: .. - ' .. , ; •. . .. 1 •. -: . •.. . . . .. 10. Measures to enforce compliance:::..:c1y'T6c 'Minister-in ehar? tif,, lftt ?p!tifirieht'.·bf · Finance (hereinaftef'rcferr.od··.to: as. Miaiqoro0fr1Pinit'1ce) shall review. every ·i1llk1for,the 'ttonds 'In; receipts ada ?rilllitue,,Jtt.•:;l!elation to the biiqn·,(dsthnatcs: and ·pla? befor?·:; we ? of, ?gisfat_wc., .• Jhc; q-q\c<>mc of such reviews in the next session. The review shall 'also G'>Pff!W1 statemen! on _'M!Yi?pµ.il).-.?.Hgqts,if .ap,y. - o:-:;t_H."i._. :'·_ ,:·?='; • ._.: • . ·.·· · , .... , ,--? _ . _ _ _ • ... (2) Whenever there · is either shortfall iri revenue or 6CCSS of expenditure o".er the intra-year targets mentioned in the Fiscal Polk:,.-=stratogyStatement Br' the rules made under' this'! Xct,>the Stat• Oo11iftnment ahalLtilke appropriate tii?:i.Iutes 't6t-·tricteasin1··?ehuc afid'/or 0ro1- 1iMluci:i11athe espenditure, including curtailment of the sumi a;uthorized to be paid and - . appliod froJD out of the Consolidated Fund of the State. ·-. . Provided that nothing in thi5 · suliH1ection lihall apply -to the uponditUID charged on the Consolidated Fund of the State under claus-e (3) of Article 202 of the Constitution or any other eipe>ilditure, which is .required to be incurred under any agreement or contract/ which cannot be, p:oritponed or cunailed. . (3) Any measure projosed in the course of the, financial year a,. which may lead. to an increase in fCV¢nue deficit, either t}J.rouah increased CfJ>COOitun: or loss of revenue, shall be aecompanied by a statement of remedial measures, proposed to neutralize such increase.or Joss and such statement shall bo placed before the House of Legislature while socking approval of Revised Estimate. _ .- (4) The State G?v?rDIJl!mtJD?Y? j( c::l?r? so, set up an agency or body i?d,ep??dentof· Jh? Stato G?v9rn'lll??t..?. rcyjew the compljarico of - the provisions ofthis Act and table such· reviews in·\ the House or Houses of th6 State Legislature. · ll .. Pcnnr to mak-c-,ml0$.-{l} The -ij?tc Oo.vi:;rnlllPQt1+li1l• ?f nofifica,tion in the Oftu=ial Gazott.,, ?ate. rule, fof ?ing Olft th,;.pro,visiQRJ 9(Uus ?!.t, (2) In particular, and without prejudice to the gcneraHty' ()f-thc fcdlbint power, .such rulea may prqviJjo. fur? Off4D:Y ·pf?· foUqwi? m!JJtei;?,inameJy­ (tt ' the fomt · of M edi,trn · 1'erm Fiscal Policy Sllatimlent. imludin I the targets for the fiscal paramekin,'- under -tioa "o; th? form of the Fiscal Policy Sttategy .. Statement ulldor.sq:,tion 7; the f'orins ror disclosure under sub-section (2Jof IOCtioll'9; ---------- 7 '(d) tho moasurcs to enforce compliance ; (c) the manner of review of compliance of the provisions of this Act -by the i.Ddepeadcmt agency under section 10; and (f) any other matter which is required to be, or may be, prescribed, 12. Rules to bo laid before the State Legislature.-Evcry rule made under thii Act shall be laid, as soon as may be after it is made, before the House of the State Legislature, while it i• in session, for a total period or not leu than fourteen days which may be comprised in one session or in two successive -icssioas and if, before the expiry of session immediately following the session oc the succession sessions aforesaid, the House agrees in making any modifica­ tion in the rule or the House agrees that the rule should not be made, the ru1e shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule. 13. Application of other laws not barred.-The provision o( this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force. 14. Power to remove di:fficulties.-(1) If any difficulty arises in giving effect to tho provisions of this Act, the State Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the-difficulty; Provided that no order shall be made under this section after the expiry -0f two years from the commencement of this Act. (2) Every order made under this section shall be laid, as soon as may be after it ia made, before the House of the State Legislature. A. SUKUMAR SINGH, Secretary (Law), Govt. of Manipur. Printed at tho Directorate of Pta, & Sty.. Govt. of Manipur/30S-C/8-8-200S.