Punjab govt to amend FRBM Act to avail additional borrowing of ₹928 crore for 2019-20

Punjab Cabinet led by Chief Minister Captain Amarinder Singh on Monday decided to amend Punjab Fiscal Responsibility and Budget Manment (FRBM) Act, 2003, to allow state to make additional borrowing of Rs 928 crore in 2019-20 over and above its net borrowing ceiling of 3% of Gross State Domestic Product (GSDP).  

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Disclosing this here today, a spokesperson of Chief Minister's Office said Cabinet had accordingly approved an amendment to Section 4, in Sub-section (2), for clause (a) of Punjab Fiscal Responsibility and Budget Manment Act, 2003.

In order to provide relief to states on account of lower tax devolution during 2019-20, and in view of hardships being faced by m in managing ir finances, Government of India had earlier decided to allow additional borrowing of Rs 58,843 crore in 2019-20 to 29 states as a one-time special dispensation, beyond eligibility of states.

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It may be recalled that Punjab Fiscal Responsibility and Budget Manment (FRBM) Act, 2003 was enacted to provide for responsibility of state government to ensure inter-generational equity in fiscal manment and long-term financial stability, by achieving sufficient revenue surplus, eliminating fiscal deficit and prudential debt manment consistent with fiscal sustainability through limits on state government borrowings, debt and deficits, greater transparency in fiscal operations of state government and conducting fiscal policy in a medium-term framework and for matters connected rewith or incidental reto. 

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Act was last amended in 2011 in conformity with recommendations of Thirteenth Finance Commission.

Earlier, Cabinet meeting started with Chief Minister complimenting Finance Minister Manpreet Singh Badal and his department for a progressive budget.

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