Section 9 in The Orissa Fiscal Responsibility and Budget Management Rules, 2005

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State of Odisha - Section

Section 9 in The Orissa Fiscal Responsibility and Budget Management Rules, 2005

9. Action Plan for Contingent liabilities.

- The State Government shall transfer a certain amount from revenue account to a "sinking Fund", and the Insurance and Pension Fund to meet huge future repayment of borrowings and rising expenditure liabilities on account of pension etc. The fund so transferred shall be maintained outside the Consolidated Fund of the State and Public Account so that the corpus of the Sinking Fund and the Insurance and Pension Fund can be utilised to meet the future contingent liabilities on account of huge repayment of loans, rising expenditure on pension.Form - I[See rule 4(1)]Fiscal Policy Strategy StatementA. Fiscal Policy overview : [This paragraph will present an overview of the present fiscal policy of the Government].B. Fiscal Policy for the Current Year : [This paragraph shall have the following sub-paragraphs dealing with-

(1)Tax Policy - In this sub-paragraph on tax policy, major changes proposed to be introduced in taxes in the current financial year will be presented. It shall contain details of tax exemptions, concessions and introduction of new taxes and user charges etc. It shall also contain details of tax reforms aimed at building up non-discretionary and revenue elastic system of taxation with tax rates that are low, limited in number of rate categories and stable. It shall also describe various non tax revenues reforms where user charges, as a short term objective, ensure recoveries of current costs, and aim at full recovery of costs measured at acceptable efficiency levels in the longer run, in case of services where there is no clear cut case for subsidisation and ensure rates of return on investment.

(2)Expenditure Policy - Under this sub-paragraph, major priorities in the allocation of expenditure shall be elaborated. It may also contain an assessment of principles regarding the benefits and target group of beneficiaries. It should describe the steps taken towards expenditure restructuring relating to both in size and sectoral allocations aimed at removing inefficiencies arising from mis allocations, design and implementation of schemes, delivery of services.

(3)Government Borrowings, Landings and Investments - In this sub-paragraph, the policy relating to government internal borrowings, lendings and recovery of loans and advances etc. shall be indicated.

(4)Other liabilities - This sub-paragraph shall include information relating to guarantees and off-budget borrowings of Government having potential budgetary implications. It would also include details relating to one-time settlement of such liabilities, measures to limit the guarantees etc.]C. Strategic Priorities for the current year -

(1)[ Resource mobilisation for the current financial year through tax, non tax and other receipts shall be spelt out.

(2)The broad principles underlying the expenditure management through prioritisation of different schemes shall be spelt out.

(3)Priorities relating to incomplete projects and new projects shall be detailed including an assessment of the on-going projects in the State.]D. Policy Evaluation - [This paragraph shall contain an evaluation of the changes proposed in the fiscal policy for the ensuing year with reference to fiscal deficit reduction and objectives set out in the Medium Term Fiscal Plan.]E. Restructuring the State Finances as recommended by latest Finance Commission - [This paragraph shall contain, in details, the various steps taken by the State Government toward restructuring state finances in order to achieve the following objectives :

(a)Bringing down the ratio of interest payments to total revenue receipt

(b)Bringing down the ratio of total salary bill relative to revenue expenditure net of interest and pension.

(c)Containing the ever increasing pension liability by following the initiative taken by the central government for pension reforms

(d)Rationalising subsidies by reducing their overall volume, increasing their transparency by making them explicit and improving their targeting. This should include collection of user charges and recoveries of cost of maintenance of irrigation work, urban water supply etc.

(e)Bringing down the debt- GSDP ratio.]

Form - II[See rule 4(2)]Medium Term Fiscal PlanA. Fiscal Indicators - Rolling Targets

Description	Last available Actuals	Last Year Revised Estimates	Current Year Target Budget Estimates	Targets for Next two years
Y	Y+1Y+2
Revenue Deficit as percentage of GSDP
Fiscal Deficit as percentage of GSDP
Primary Deficit as percentage of GSDP
Total Debt Stock as percentage of GSDP

B. Assumptions underlying the Fiscal Indicators-

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State of Odisha - Section

Section 9 in The Orissa Fiscal Responsibility and Budget Management Rules, 2005

9. Action Plan for Contingent liabilities.