Punjab cabinet decides to amend FRBM Act
To enable additional borrowing of Rs 928 crore in 2019-20
Chandigarh: The Punjab Cabinet led by Captain Amarinder Singh on Monday decided to amend the Punjab Fiscal Responsibility and Budget Management (FRBM) Act, 2003, to allow the state to make an additional borrowing of Rs. 928 crore in 2019-20 over and above its net borrowing ceiling of 3% of Gross State Domestic Product (GSDP).
Disclosing this here today, a spokesperson of the Chief Minister's Office said the Cabinet had accordingly approved amendment to Section 4, in Sub-section (2), for Clause (a) of the Punjab Fiscal Responsibility and Budget Management Act, 2003.
In order to provide relief to the states on account of lower tax devolution during 2019-20, and in view of the hardships being faced by them in managing their finances, the Government of India had earlier decided to allow additional borrowing of Rs. 58843 crore in 2019-20 to the 29 states as a one-time special dispensation, beyond the eligibility of the states.
It may be recalled that the Punjab Fiscal Responsibility and Budget Management (FRBM) Act, 2003 was enacted to provide for the responsibility of the state government to ensure inter-generational equity in fiscal management and long-term financial stability, by achieving sufficient revenue surplus, eliminating fiscal deficit and prudential debt management consistent with fiscal sustainability through limits on the state government borrowings, debt and deficits, greater transparency in fiscal operations of the state government and conducting fiscal policy in a medium-term framework and for matters connected therewith or incidental thereto.
The Act was last amended in 2011 in conformity with the recommendations of the Thirteenth Finance Commission.
Earlier, the Cabinet meeting started with the Chief Minister complimenting Finance Minister Manpreet Singh Badal and his department for a progressive budget.