THE KARNATAKA FISCAL RESPONSIBILITY (AMENDMENT) ACT, 2011
KARNATAKA ACT NO 13 OF 2011
(First Published in the Karnataka Gazette Extra-ordinary on the nineteenth day of March, 2011)
(Received the assent of the Governor on the seventeenth day of March, 2011) An Act further to amend the Karnataka Fiscal responsibility Act, 2002.
Whereas it is expedient further to amend the Karnataka Fiscal Responsibility Act, 2002 (Karnataka Act 16 of 2002) for the purposes hereinafter appearing;
Be it enacted by the Karnataka State Legislature in the sixty-second year of the Republic of India as follows:-
1. Short title and commencement.- (1) This Act may be called the Karnataka Fiscal Responsibility (Amendment) Act, 2011.
(2) It shall come into force at once.
2. Amendment of section 4.- In the Karnataka Fiscal Responsibility Act, 2002 (Karnataka Act 16 of 2002) (hereinafter referred to as the principal Act), in section 4, in sub-section (3),-
(i) after clause (f), the following shall be inserted, namely:-
“(g) ensure that the outstanding debt at the end of financial year 2010-11, 2011-12, 2012-13, 2013-14 and 2014-15 shall be at 26.2 percent, 26 percent, 25.7 percent, 25.4 percent and 25.2 percent respectively of the estimated Gross State Domestic Product for that year;”
(ii) after the third proviso, the following shall be inserted, namely:-
“Provided also that the fiscal deficit during the year 2010-11 may exceed the limit but not more than 3.44 percent of estimated Gross State Domestic Product as a part of counter recessionary measures. As a measure of compliance a report with details of measures taken and expenditure incurred thereby shall be placed before both Houses of the Legislature.”
3. Amendment of section 5.- In section 5 of the principal Act, in sub-section (2), after clause (b), the following shall be inserted, namely:-
“(c) the tax expenditure and the method thereon explicitly; compliance costs of major tax proposal; Revenue Consequences of Capital Expenditure (RCCE) along with related liabilities; physical and financial assets; vacant public land and buildings; future expenditure commitments of major policy changes; liabilities explicit and implicit in public private partnership; and values of parameters underlying projections for receipts and expenditures and the band within which they can vary while remaining consistent with targets.”
4. Amendment of section 6.- In section 6 of the principal Act, for sub-section (2), the following shall be substituted, namely:-
“(2) The State Government may, by notification, constitute a Fiscal Management Review Committee headed by the Chief Secretary to Government with other Secretaries to Government including the Principal Secretary or Secretary to Government in charge of Finance as members, as may be notified which shall meet at least twice a year to review fiscal and debt position of the State; and States progress on its fiscal correction path and to advice corrective measures as may be required. The procedure and modalities for review shall be such as may be prescribed.
(2A) The Minister in charge of finance shall review every half year the trends in receipt and expenditure in relation to the Budget, remedial measures to be taken to achieve budget targets as recommended by the Fiscal
Management Review Committee and place before both the houses of Legislature the outcome of such reviews. The review report shall be in such form as may be prescribed.”
5. Amendment of section 11.- In section 11 of the principal Act, in sub-section (1), for the proviso, the following shall be substituted, namely:-
“Provided that no order shall be made under this section after the expiry of two years from the date of commencement of the Karnataka Fiscal Responsibility (Amendment) Act, 2011.”
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