The West Bengal Fiscal Responsibility And Budget Management Act, 2010

SRAVANA 8] 	 FRIDAY, JULY 30, 2010 	 [SAKA 1932 
~ITP 
iKulkata Gapttt 
Registered No. WB/SC-247 	 No. WB(Part-III)/2010/SAR-17 
iiciAci 124 
Extraordinary 
Published by Authority 
PART III—Acts of the West Bengal Legislature. 
GOVERNMENT OF WEST BENGAL 
LAW DEPARTMENT 
Legislative 
NOTIFICATION 
No. 1166-L.-30th July, 2010.—The following Act of the West Bengal Legislature, having been assented to by the 
Governor, is hereby published for general information:— 
West Bengal Act XIV of 2010 
THE WEST BENGAL FISCAL RESPONSIBILITY AND 
BUDGET MANAGEMENT ACT, 2010. 
[Passed by the West Bengal Legislature.] 
[Assent of the Governor was first published in the Kolkata Gazette, 
Extraordinary, of the 30th July, 2010.] 
Short title. 
An Act to provide for the responsibility of the State Government to ensure prudence 
in fiscal management and fiscal stability by progressive elimination of revenue deficit, 
reduction in fiscal deficit and prudent debt management consistent with fiscal 
sustainability, greater transparency in fiscal operations of the State Government and 
conduct of fiscal policy in a medium-term framework and for matters connected therewith 
or incidental thereto. 
WHEREAS it is expedient to provide for the responsibility of the State Government 
to ensure prudence in fiscal management and fiscal stability by progressive elimination 
of revenue deficit, reduction in fiscal deficit and prudent debt management consistent 
with fiscal sustainability, greater transparency in fiscal operations of the State 
Government and conduct of fiscal policy in a medium-term framework and for matters 
connected therewith or incidental thereto. 
2 	 THE KOLKATA GAZETTE, EXTRAORDINARY, JULY 30, 2010 	 [PART III 
The West Bengal Fiscal Responsibility and 
Budget Management Act, 2010. 
(Sections 1-3.) 
It is hereby enacted in the Sixty-first Year of the Republic of India, by the 
Legislature of West Bengal, as follows:- 
Short title and . 
commencement. 
Definitions. 
Fiscal policy 
statement to be 
laid before West 
Bengal Legislative 
Assembly. 
1. (1) This Act may be called the West Bengal Fiscal Responsibility and Budget 
Management Act, 2010. 
(2) It shall come into force on such date, or shall be deemed to have come into 
force on such date, as the State Government may, by notification in the Official 
Gazette, appoint. 
2. In this Act, unless the context otherwise requires,— 
(a) "budget" means the annual financial statement laid before the West 
Bengal Legislative Assembly under article 202 of the Constitution of 
India; 
(b) "current year" means the financial year preceding the financial year for 
which the budget and medium term fiscal policy are being presented; 
(c) "financial year" means the year commencing from the 1st day of April 
and ending on the 31st day of March next following; 
(d) "fiscal deficit" means the excess of total disbursements (net of debt 
repayments) over total revenue receipts, recovery of loans and non-debt 
capital receipts, during a financial year; 
(e) "fiscal indicators" means such indicators as may be prescribed for 
evaluation of the fiscal position of the State Government; 
(f) "State Government" means the Government of West Bengal; 
(g) "medium-term fiscal policy" means the policy drawn up by the State 
Government for a period of five years from the financial year on which 
this Act shall come into force with the objectives of progressively 
eliminating the revenue deficit; 
(h) "prescribed" means prescribed by rules made under this Act; 
(i) "previous year" means the year preceding the current year, 
(0 "revenue deficit" means the difference between total revenue expenditure 
and total revenue receipts (TRR); 
(k) "State" means the State of West Bengal; 
(1) "total liabilities" means the liabilities under the Consolidated Fund of the 
State and the Public Account of the State and includes the borrowings 
by the public sector undertakings and the special purpose vehicles and 
other equivalent instruments including guarantees where the principal 
and/or interest are to be serviced out of the State budgets; 
(m) "total revenue receipts (TRR)" includes State's own revenue receipts 
(both tax and non-tax) and current transfers from the Central (comprising 
grants and States' share of Central taxes); 
(n) "triggers" means the intra-year bench marks on deficit; 
(o) "Committee" means the Public Expenditure Review Committee 
constituted under sub-section (1) of section 6. 
3. (1) The State Government shall lay in every financial year before the West 
Bengal Legislative Assembly along with the budget, a medium-term fiscal policy 
statement and a fiscal policy strategy statement. 
PART III] 	 THE KOLKATA GAZETTE, EXTRAORDINARY, JULY 30, 2010 	 3 
The West Bengal Fiscal Responsibility and 
Budget Management Act, 2010. 
(Sectibn 4.) 
Fiscal 
management 
principles. 
(2) The medium-term fiscal policy statement shall set forth in such form as may 
be prescribed, the fiscal management objectives of the State Government and three 
years' rolling targets for fiscal indicators with specification of underlying assumptions. 
(3) In particular and without prejudice to the provisions contained in sub-section 
(2), the medium-term fiscal policy statement shall include assessment of sustainability 
relating to— 
(a) the balance between revenue receipts and revenue expenditure; 
(b) use of capital receipts including open market borrowing for generating 
productive assets. 
(4) The fiscal policy strategy statement shall be in such form as may be prescribed 
and shall, inter alia, contain— 
(a) policies of State Government for the ensuing financial year relating to 
taxation, expenditure; 
(b) borrowings and other liabilities, lending and investment and such other 
activities like underwriting and guarantees and activities of Public Sector 
Undertakings which have potential budgetary implications; 
(c) the strategic priorities of the State Government for the ensuing financial 
year in the fiscal area; 
(d) evaluation as to how current policies of the State Government are in 
conformity with the fiscal management principles as set out in section 4 
and the objectives set out in medium-term fiscal policy statement. 
4. (1) The State Government shall take appropriate measures to reduce the 
revenue deficit and build up an adequate revenue surplus by following such principles 
as may be prescribed. 
(2) In particular and without prejudice to the generality of the foregoing provision, 
the State Government shall progressively reduce— 
(a) revenue deficit to nil within a period of five years,— 
(i) with reducing revenue deficit upto 1.6% of the Gross State Domestic 
Product (GSDP) during the financial year commencing from the 
1st day of April, 2011, and 
(ii) with reducing revenue deficit to zero during the financial year 
ending on the 31st day of March, 2015, and 
(iii) build up surplus amount of revenue and utilize such amount for 
discharging liabilities in excess of assets; 
(b) fiscal deficit to 3% of the estimated Gross State Domestic Product 
(GSDP) within a period of four years,— 
(i) with reducing fiscal deficit upto 3.5% of the Gross State Domestic 
Product (GSDP) during the financial year commencing from the 
1st day of April, 2011, and 
(ii) i th reducing fiscal deficit to 3% of the Gross State Domestic 
Product (GSDP) during the financial year ending on the 31st day 
of March, 2014: 
Provided that the revenue deficit and the fiscal deficit may exceed such limit due 
to the ground of such natural calamity, or such other exceptional circumstances, as 
the State Government may, by order published in the Official Gazette, specify. 
Provided further that every order made under the first proviso, shall be laid, as 
soon as may be after it is made, before the West Bengal Legislative Assembly. 
THE KOLKATA GAZETTE, EXTRAORDINARY, JULY 30, 2010 	 [PART III 
The West Bengal Fiscal Responsibility and 
Budget Management Act, 2010. 
(Sections 5-9.) 
Measures for 
fiscal 
transparency. 
Public 
Expenditure 
Review 
Committee. 
Powers and 
functions of 
Committee. 
Measures to 
enforce 
compliance. 
Power to make 
rules. 
5. (1) The State Government shall take suitable measures to ensure greater 
transparency in its fiscal operations and minimise as far as practicable in public interest 
official secrecy in the preparation of budget: 
Provided that the State Government shall have the power to reserve any such 
information which would adversely affect the interest of the State Exchequer. 
(2) In particular and without prejudice to the generality of the foregoing provision, 
the State Government shall, at the time of presentation of budget, disclose in such 
manner as may be prescribed,— 
(a) the significant changes in the accounting standards, policies and practices 
affecting or likely to affect the compliance of the prescribed fiscal 
indicators; 
(b) as far as practicable, all outstanding contractual liabilities, revenue demand 
raised, but not realized, committed liability in respect of major works and 
supply contracts, losses incurred in providing public goods and services, 
off budget borrowings and contingent liabilities created by way of 
guarantees having potential budgetary implications. 
6. (1) As soon as may be after the commencement of the Act, the State 
Government may, by notification in the Official Gazette, appoint a Committee to be 
called the Public Expenditure Review Committee. 
(2) The Committee shall consist of not more than five members who are having 
expertise in the fields of Finance, Economic Management, Planning, Accounts and 
Audit and Law. 
(3) The members of the Committee shall be appointed by the State Government 
on the recommendation of the Selection Committee consisting of the Chief Minister, 
the Finance Minister and the Leader of the Opposition. 
(4) The terms and conditions of the members in the Committee shall be such as 
may be prescribed. 
7. The Committee shall submit to the State Government in such form, and at 
such intervals, as may be prescribed a review report giving full account of each item 
where the deviation from the fiscal target has occurred during the previous year. 
8. (1) The State Government shall specify in the budget the contingent measures 
that it would take to control the increase in deficit beyond certain specified levels 
during the coming year. Whenever there is either shortfall in revenue or excess of 
expenditure over specified levels during the course of the year, the State Government 
shall take steps either to make proportionate reduction in the voted expenditure 
authorised from the Consolidated Fund or to increase the revenue and in case such 
reduction being made, it shall be without affecting the amount charged thereon. The 
triggers as well as corrective actions that shall be initiated upon activation of triggers 
shall also be the integral part of the budget. 
(2) The Finance Minister of the State shall make a statement in the West Bengal 
Legislative Assembly explaining any deviation in meeting the obligation of the State 
Government under this Act and shall further explain whether the deviation is substantial 
and relates to the actual or the potential budgetary outcome and state the remedial 
measures that the Government propose to take in this regard. 
9. (1) The State Government may, by notification in the Official Gazette, make 
rules for the purpose of carrying into effect the provisions of this Act. 
PART III] 	 THE KOLKATA GAZETTE, EXTRAORDINARY, JULY 30, 2010 	 5 
The West Bengal Fiscal Responsibility and 
Budget Management Act, 2010. 
(Sections 10-13.) 
Protection of 
action taken in 
good faith. 
Jurisdiction of 
civil courts 
barred. 
Application of 
other laws not 
barred. 
Power to remove 
difficulties. 
(2) All rules made under this Act shall be laid, as soon as may be after it is made, 
before the West Bengal Legislative Assembly, while it is in session, for a total period of 
thirty days which may be comprised in one session or in two or more successive 
sessions, and if, before the expiry of the session in which it is so laid or 
the session immediately following the session or the successive sessions aforesaid, 
the West Bengal Legislative Assembly makes any modification in the rules or decides 
that the rules should not be made, the rules 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. 
10. No suit, prosecution or other legal proceeding shall lie against the State 
Government or any officer, authority or person empowered to exercise the powers and 
perform the functions by or under this Act or anything which is in good faith done 
or intended to be done under this Act or the rules or orders made thereunder. 
11. No civil court shall have jurisdiction to question the legality of any action 
taken by, or any decision of, the State Government, under this Act. 
12. The provisions of this Act shall be in addition to, and not in derogation of, 
the provisions of any other law for the time being in force. 
13. (1) If any difficulty arises in giving effect to the provisions of this Act, the 
State Government may, by order published in Official Gazette, make such provisions 
not inconsistent with the provisions of this Act as may appear to be necessary or 
expedient for removing the difficulty: 
Provided that no such order shall be made after the expiration of a period of two 
years from the date of commencement of this Act. 
(2) Every order made under this section, shall be laid, as soon as may be after 
it is made, before the West Bengal Legislative Assembly. 
    
By order of the Governor, 
MITA BASU ROY, 
Pr. Secy. to the Govt. of West Bengal, 
Law Department. 
Published by the Controller of Printing and Stationery, West Bengal and printed at Saraswaty Press Ltd. 
(Government of West Bengal Enterprise), Kolkata 700 056 

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