The Tripura Fiscal Responsibility and Budget Management Act,2005

TRIPURA ACT NO. 7 OF 2005 
Aa 
THE TRIPURA FISCAL RESPONSIBILITY 
AND BUDGET MANAGEMENT 
ACT, 2005
Published in the 
Extra-ordinary issue of Tripura Gazette. 
  
Agartala, Monday, June 27, 20035 A, D. Asadha 6, 1927 SOE 
4 
Government of Tripura 
Law Department 
No. F.8 (16}-Law/Leg/2005 Dated, Agartala, the 25" June, 2005 
NOTIFICATION 
The following Act of the Tripura Legislative Assembly receivec| the 
assent of the Governor on the 24" day of June, 2005 and is hereby published 
for general informat on. 
§.C.Das 
secretary 
Government of Tripure.
Tripura Fiscal Responsibility and Budge’: Managemen: 
Act ) 2005. 
The Act provides for the responsibility of the S ate Governnient to ensure prudence in fiscal management and fiscal stability bv progressive elimination of revenue deficit, reduction in fiseal deficit. prudent debt management consistent with fiscal sustainability, greater transparency in fiscal operations of the Government and conduct of fiscal policy in a médium term framework ancl for niatters. connected therewith or incidental theres. 
Be it enacted by the Tripura State Legislature i1 the year 2005 25 follows;- 
Ad 
de SHORT TITLE AND COMMENCEMENT 
(1} This Act may be called the Tripura Fiscal Responsibility and Budget Management Act, 2005. 
(2) It stall come into force on such date as the State Governmer.t may by notification in the Official Gazett?, appoint in this behalf. s 
a DEFINITIONS 
In this Act, unless the context otherwise requires - 
a) “bucget” means the annual financial stater-nt laid before: the House or Houses of the State Legislature under Article 202 of the Canntitution; 
b) “curvent year” means the financial year preteding the ensuing Year 
c} “ensuing year” tneans the financial year for which the budget is beitl ¢ presented: 
dj) “financial year” means the year beginning or the 1s April and endiig on 3158t March next following; 
¢) GSDP means Gross State Domestic Product at current merket Price s. 
f) “fiscal deficit” is the excess of ageregate dislursements (net ef Geb: repayments) over revenue receipts, recovery of loans and non-debt cavital receipts: 
2) “fiscal indicators” are such indicators as mai be preseribed fo- evaluation of the fiscal position of the State Gc vernment; 
2
h 
i 
i) 
kk 
) “fisce] targets” are the numerical ceilings and proporcions to 
total revenue receipts (TRR) or GSDP for the fiscal indica-ors; 
“prescribed” means prescribed by the rules mmade under this Act: 
“previous year” means the year preceding the current year 
) “revenue deficit? means the difference between “evenue: 
expenditure and total revenue receipts (TRR ; 
Explanation: 
(1)'Totel revenue receipts’ (TRR) includes State’s own vevenu: 
receipts (both tax and non-tax) and curreat transfers from the Center (compriging grants and State’s sheie of Central taxes), 
(2)"Touil liabilities” means the liabilities uncer the Consolidated 
Furd of the State and the Public Account of the State arid shall 
alsc include borrowings by the public sector undertakings ancl 
the special purpose vehicles and other eq tivalent instruments 
including guarantees where the principal and/ or interest are 
to be serviced out of the State budgets. 
FISCAL MANAGEMENT OBJECTIVES 
The State Government shall: 
a) take appropriate measures to remain revenue positive and buile 
up acequate revenue surplus and contain ‘he fiscal deficit at = 
sustainable level, and utilize such surplus for discharging the 
liabilities in excess of the assets or or funding capita exper diture: 
9) pursue policies to raise non-tax revenue with due regard to cosi 
recovery and equity; and 
lay dawn norms for prioritization of capital expenditure, ar.c 
pursue expenditure policies that would nrovide impetus fox 
ecancmic growth, poverty reduction and irnprovement inhumar 
welfare, 
FISCAL VANAGEMENT PRINCIPLES 
“he Stace Government shall be guided by the following, fises! 
manaperient principles, namely: 
aj transparency in setting the fiscal policy objectives, the implementation of public policy and the publication of fiscal 
3
(2) 
irfarmation so as to enable the public to scrutinize the conduct 
cl fiseal policy and the state of public finances; 
b) stability and predictability in fiscal policy making process and 
in the way fiscal policy impacts the economy; 
c) responsibility in the management of public finances, including 
integrity in budget formulation; 
d) fairness to ensure that policy decisisns of the Stete 
Government have due regard to their financial tmplications on 
future generations; and 
e} efficiency in the design and implementation of the fiscal solicy 
and in managing the assets and liabilities of the public sector 
bilance sheet, 
FISCAL POLICY STATEMENTS TO BE LilID BEFORE TEE 
LEGISLATURE 
The State Government shall in each financial year lay before the 
House /Houses of the Legislature, the following statements of fiscal 
policy along with the budget, namely:- 
a] the Macroeconomic Framework Statement; 
b}) the Medium Term Fiscal Policy Statement; < nd 
c) the Fiscal Policy Strategy Statement. 
MACROECONOMIC FRAMEWORK STATEMENT 
The Microeconomic Framework Statement, in such form as may be 
prescribed, shall contain an overview of the State economy, zn 
analyss of growth and sectoral composinen of GSDP. en 
assess nent related to State Government finances and future 
prospects, 
Mediu n Term Fiscal Policy Statement 
The Medium Term Fiscal Policy Statement shal set forth in such 
form a3 may be prescribed the fiscal management objectives of the 
State Civernment and three-year roiling targets for the prescribed 
fiscal indicators with clear erunciation cf the underlying 
ASSLUTL ONS. 
In particular and without prejudice to the provisions contained in 
sub section {1}, tae medium Term Fiscal Policy Statement shell 
include the various assumptions behind the fiscrl indicators and an 
agsessinent of sustainability relating to:- 
4
(1) 
i) 
ii) 
iil) 
the balance between revenue reccipts and revenue 
expenditure; 
the use of capital receipts including borrowings for 
zenerating productive assets, 
he estimated yearly pension liabilities worked out on 
ictuarial basis for the next ten years. 
Proviced that in case it is not possible to ca’culate the pension 
liabilities on actuarial basis during the period of first three yeacs 
after the coming into force of this Act, the Stat: Government may, 
during that period, estimate the pension liabilities by making 
forecasts on the bais of trend growth rates. 
FISCA.” POLICY STRATEGY STATEMENT 
The Fincal Policy Strategy Statement shall be ir such form as muy 
be prescribed and shall contain, inter alia, 
i) 
i) 
iv] 
he fiseal policies of the State Government for the ensuirg 
vear relating to taxation, expenditure, borrowings and other 
liabilities {including borrowings by, Public Sector 
Undertakings and Special Purpose Vehicle and other 
equivalent instruments where liability for repayment is an the 
state Government), lending, investment:, other contingent 
abilities, user charges on public goods/utilities and 
cescription of other activities, such as guarantees and 
ectivilies of Public Sector Undertakings which have potential 
budgetary: implications; 
the strategic priorities of the State Goverament in the fiscal 
erea for the ensuing year; 
the key fiscal measures and the rationale for any rajar 
ceviation in fiscal measures pertaining te taxation, sutsidy, 
¢xpenditure, borrowings and user charges on public 
ecods/utilities; and 
#n evaluation of the current policies of the State Government 
vis-a-vis the fiscal management principles set out in Section 
“, the fiscal objectives set out in the Medium-Term Fiscal 
Policy Statement in sub-section 1 of section 7 and fiscal 
targets sel ot in section 9, 
FISCAL TRAGETS 
The State Government may prescribe such targets as may be 
deemed necessary for giving effect to the fiscal management! 
objectives.
(2) 
(2) 
In paricular, and without prejudice to the generality of the 
foregoing provisions, the State Government shall 
i) strive to remain revenue surplus by maxing a balance i1 
revenue receipts and expenditure and build up further 
slrplus. 
ii) strive to bring dewn fiscal deficit to 3% ly the year ending 
March 2010. 
iii) ersure within a period of 5 years, beginn ng from the initial 
financial year on the 1% day of April 2005, and ending ori the 
3st day of March 2010, that the total debt stock do net 
exceed 40 per cent ofthe estirnated GSDP for that year; 
iv) limit the amount of annual incremental msk weighted 
guarantees to i% of the GSDP of that year 
Provide] that revenue surplus and fiscal defic.t may exceed the 
limits specified under this section due to ground or grouncis cf 
unforessen demands on the finances of the State Government 
arising out of internal disturbance or natural cal: mity or such other 
exceptional grounds as the State Government may specify, 
Provide] however that a statement in respect of the ground or 
ground; specified in the first proviso shall be placed before the 
House or Houses of the Legislature, as soon as nay be, after such 
deficit ¢ mount exceeds the aforesaid targets. 
MEASURES FOR FISCAL TRANSPARENCY 
The State Government shall take suitable measures to ensur® 
greater transparency in its fiscal operations in the public interest 
and miimize as far as practicable, secrecy in the preparation of the 
budget. 
In particular, and without prejudice to the generality of the 
foregoirg provisions, the State Government shill, at the time cf 
presentation of the budget, make disclosures on ‘he following, alonz 
with de-ailed information in such forms as may 02 prescribed, 
i) the significant changes in the accounting standards, poheies 
ard practices affecting or likcly to affect the computaticn cf 
fiscal indicators; 
ii} details of borrowings by way of Ways and Means 
Acwances/ Overdraft availed of from the Reserve Bank of Ircia- 
6
(3) 
ii. 
(1) 
(3) 
Whenever the State Government undertakes to 1 neonditionally and 
substantially repay the principal amount and /or pay the interest cf 
any seoarate legal entity, it has to reflect such liability as the 
borrowings of the State. 
MEASURES TO ENFORCE COMPLIANCE 
The Mi ister-in-Charge of the Department of F nance (hereinafter 
referrec to as Minister of Finance} shall review, every quarter, the 
trends in receipts and expenditure in relation to the budget 
estimat?s and placM¢before the House or Houses of the Legislature, 
the outzome of such reviews in the next session. The review shal 
also cotitain staterment on deviation in targets, if sury. 
Whenever there is either shortfall in revenue or excess cf 
expenciture over the intra-year targets menticned in the Fiscal 
Policy Strategy Statement or the rules made under this Act, the 
State Government shall take appropriate measures for increasin 
revenue and /or for reducing the experditure, including 
curtailnient of the sums authorized to be paid and applied from out 
of the Consolidated Fund of the State. 
Provide: that nothing in this sub-section sliall apply to the 
expencilure charged on the Consolidated Fund 3f the State unde- 
clause (3) of Article 202 of the Constitution or any othe: 
expenditure, which is required to be incurred under any agreement 
or contract, which cannot be postponed or curtailsd, 
Any measure proposed in the course of the financial year, waich 
may lead to an increase in revenue deficit, eithe: through increased! 
expenditure or loss of revenue, shall be accompanied by a 
statement of remedial measures, proposed te neutralize such 
increase or loss and such statement shall be placed before the 
House, Jouses of Legislature while seeking aporoval for Revisec! 
Estimat..
{4) 
i2. 
(1) 
(2) 
1a. 
14. 
The State Government may, if desires so, set up an agency 
indeperdent of the State Government to review the cornpliance cf 
the provisions of this Act and table such reviews in the House or 
Houses of the State Legislature. 
POWES TO MAKE RULES 
The State Government may, by notification in the Official Gazette, 
make rules for carrying out the provisions of this Act. 
In particular, and without prejudice to the generality of the 
foregoing power, such rulé§S may provide for all or any of the 
following matters, namely 
a) the ‘orm of the Macroeconomic Framework Statement utider 
section 6; 
6) the form of Medium-Term Fiscal Policy Statement, including the 
targets for the fiscal indicators, under section 7; 
é) the form of Fiscal Policy Strategy Statement under section 8; 
dj} the forms for disciosure under sub-section (2) of section 10; 
e) measures to enforce compliance; 
) the mianner of review of compliance of the previsions of this Act 
by the independent agency under section 11; and 
2) amy other matter which is required to be, or may be, prescribed. 
RULES TO BE LAID BEFORE LEGISLATURE 
very rile made wader this Act shall be laid, as soon as mat be 
after it is made, before the House or Houses of the legislature, while 
it is in session, for a total period of thirty deys which may be 
comprised in one sessian or in two or more successive sessions, 
and if, sefore the expiry of the session immedi:tely following the 
session or the successive sessions aforesaid, the House/ Houses 
agree in making any modification in the rule or (he House/Houses 
agree that the rule should not be made, the rvle shall thereafter 
have effect only in such modified farm or be of no effect, as the ::ase: 
maybe; so, however, that any such modification cr annulment shall 
be without prejudice to the validity of anything previously clone 
under that male. 
PROTECTION OF ACTION TAKEN IN GOOD FAITH 
No suit, prosecution or other legal proceedings sliall lie against the 
State Government or any officer of the State Government fer 
g
is. 
16. 
(1) 
(2) 
anyth ng which is in good faith done or intended to be done under 
this till or the rules made there under. 
APPLICATION OF OTHER LAWS NOT BARRED 
The crovisions of this bill shall be in addition to, and not in 
deroge.tion of, the provisions of any other law for the time being in 
force. 
POWER TO REMOVE DIFFICULTIES 
if any difficulty arises in giving effect to the provisions of chis bill, 
the Sate Government may, by order publisned in the Official 
Gazettes, make such provisions not inconsistent with the provisions 
of this bill as may appear to be necessar. for removing the 
diffieu ty. & 
Provided that no order shall be made under this section after the 
expiry of two years from the commencement of t1is bill. 
Every order made under this section shall be lid, as soon as may 
be after itis made, before each House of the Stave Legislature. 
S.C. Das: 
Secret ury 
Govt. of Tripura.

‹ Prev All Tripura acts Next ›