Section 5 in The Meghalaya Fiscal Responsibility and Budget Management Act, 2006
5. Fiscal Management Principles to ensure fiscal discipline in the State.
- The Fiscal management principles to ensure Fiscal Discipline in the State shall be as follows:-(A)Expenditure Management:(i)to rationalize and pursue expenditure policies that would provide impetus to economic growth, poverty reduction and improvement in human welfare;(ii)manage the expenditure of the State in relation to its receipts potential so as to prevent as far as possible deterioration in its fiscal position, especially on the revenue account;(iii)to make an effort to contain non plan expenditure with the sole objective of bringing down the deficit on the Balance from Current Revenue/Non Plan Gap;(iv)to reduce the expenditure on salaries and wages of the government through an objective analysis on the relevancy of the existing posts and to abolish any identified vacant redundant posts;(B)Resource Management:Tax :(i)Undertake measures to improve the State's own resources with an emphasis on cost recovery;(ii)To ensure a reasonable degree of stability and predictability with regard to rates in taxes and revenue expected from them;(iii)to pursue a tax policy with due regard to economic efficiency, social equity and compliance cost;(iv)to maintain the integrity of the tax system by minimizing special incentives, concessions and exemptions;Non-Tax:Pursue non tax policies to increase revenues, with due regard to cost recovery and equity;(C)Debt Management:(i)to ensure that the policy decisions of the government have due regard to the financial implications on the future generations;(ii)maintain government debt at sustainable level by bringing down the fiscal deficit in a phased manner to the level of 3 % of GSDP;(iii)manage guarantees and other contingent liabilities prudently with particular reference to the quality and level of such liabilities;(iv)to ensure that borrowings are used for productive assets and accumulation of capital assets and are not used to finance revenue expenditures;(D)Management of Public Sector undertakings :Minimize the fiscal risk associated with management of public sector undertakings and the utilities providing goods and services through a review of the performance of the State Public Sector Undertakings, including restructuring of those that are absolutely essential and closure of those no longer viable;(E)Budget Management:Formulate a realistic budget with due regard to general economic outlook and revenue prospects and minimize deviation during the course of the year;(F)Transparency in Fiscal Management:Maintain transparency by allowing disclosure of sufficient information to allow public scrutiny on the conduct of fiscal policy and the state of public finances.
