Chandigarh July 20: Haryana Government has decided to promulgate an ordinance further to amend the Haryana Fiscal Responsibility and Budget Management Act, 2005. This ordinance will be called as the Haryana Fiscal Responsibility and Budget Management (Amendment) Ordinance, 2016.
A decision to this effect was taken in the meeting of State Cabinet held under the Chairmanship of Chief Minister Mr Manohar Lal here today.
The amendment for the financial year 2015-16 to 2019-20 is necessitated because of recommendations of the fourteenth Finance Commission whose recommendations were accepted by the Government of India. The amendment replaces the earlier stipulations of the thirteenth Finance Commission to bring in Fiscal responsibility among all States and the Union Government.
The fiscal deficit will now be anchored to an annual limit of three per cent of GSDP. The State will be eligible for flexibility of 0.25 per cent of the GSDP if the debt-GSDP ratio was less than or equal to 25 per cent in the preceding year. State will be further eligible for an additional borrowing limit of 0.25 per cent of GSDP in a given year if the interest payments were less than or equal to 10 per cent of the revenue receipts in the preceding year.
The flexibility of 3.25 or 3.50 per cent will be available to the State only if there is no revenue deficit in the year in which borrowing limits were to be fixed and the immediately preceding year. If the State is not able to fully utilize its sanctioned borrowing limit of three per cent of GSDP in any particular year during the first four years of Fourteenth Finance Commission award period (2015-16 to 2018-19), State will have the option of availing this un-utilized borrowing (calculating in rupees only) in the following year but within the Fourteenth Finance Commission award period.