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State of Andhra Pradesh - Act

Andhra Pradesh Fiscal Responsibility and Budget Management Rules, 2006

ANDHRA PRADESH
India

Andhra Pradesh Fiscal Responsibility and Budget Management Rules, 2006

Rule ANDHRA-PRADESH-FISCAL-RESPONSIBILITY-AND-BUDGET-MANAGEMENT-RULES-2006 of 2006

Published on 30 June 2006
Commenced on 30 June 2006
[This is the version of this document from 30 June 2006.]
[Note: The original publication document is not available and this content could not be verified.]

Andhra Pradesh Fiscal Responsibility and Budget Management Rules, 2006Published vide Notification No. G.O. Ms. No. 183, Finance (BG.I), dated 30.06.2006Last Updated 24th September, 2019No. G.O. Ms. No. 183. - In exercise of the powers conferred by Section 15 of the Andhra Pradesh Fiscal Responsibility and Budget Management Act, 2005, (Act No.34 of 2005) and the Andhra Pradesh Fiscal Responsibility and Budget Management (Amendment) Act, 2006 (Act No. 15 of 2006) the Government of Andhra Pradesh hereby makes the following rules, namely:-

1. Short title and commencement.

(1)These rules may be called the Andhra Pradesh Fiscal Responsibility and Budget Management Rules, 2006.

(2)They shall come into force with effect from 30-6-2006.

2. Definitions.

- In these rules, unless the context otherwise requires,-a. "Act" means the Andhra Pradesh Fiscal Responsibility and Budget Management Act, 2005;b. "form" means a form appended to these rules;c. "section" means a section of the Act;d. words and expressions used herein but not defined and defined in the Act shall have the meanings respectively assigned to them in the Act.

3. Macroeconomic Framework Statement.

- The Macroeconomic Framework Statement as required under Section 6, of the Act shall be in Form F-l.

4. Medium Term Fiscal Policy Statement.

(1)The Medium Term Fiscal Policy Statement, as required under subsection (1) of Section 7, of the Act shall include in Form F-2 three year rolling targets in respect of the following fiscal indicators:

(a)revenue deficit as a percentage of TRR;

(b)fiscal deficit as a percentage of GSDP;

(c)outstanding total liabilities as a percentage of GSDP;

(2)The Medium Term Fiscal Policy Statement shall also explain the assumptions underlying the above mentioned targets for fiscal indicators and an assessment of sustainability relating to the items indicated in subsection (2) of Section 7 of the Act.

5. Fiscal Policy Strategy Statement.

- The Fiscal Policy Strategy Statement as required under Section 8 of the Act shall be in Form F-3.

6. Disclosures.

(1)The State Government shall, at the time of presenting the budget, make disclosures as required under Section 10 together with the following statements:

(a)a statement of select indicators of fiscal situation in Form D-l;

(b)a statement on components of State Government liabilities and interest cost of borrowing/mobilization of deposits in Form D-2;

(c)a statement on the Consolidated Sinking Fund in Form D-3;

(d)a statement on guarantees given by the Government in Form D-4;

(e)a statement on outstanding risk-weighted guarantees in Form D-5;

(f)a statement on the Guarantee Redemption Fund in Form D-6;

(g)a statement of assets in Form D-7;

(h)A statement on claims and commitments made by the State Government on revenue demands raised but not realized in Form D-8; and

(i)a statement on liability in respect of major works and contracts, committed liabilities in respect of land acquisition charges and claims on the State Government in respect of unpaid bills on works and supplies in Form D-9;

(j)a statement giving details of number of employees in government, public sector and aided institutions and related salaries and pensions in Form D-10.

(2)The provisions of sub-rule (1) shall be complied with not later than three years after the coming into force of the Act.

7. Measures to enforce compliance.

- In case the outcome of the quarterly reviews of trends in receipts and expenditure, at the end of the second quarter of any financial year shows that-

(i)the total non-debt receipts are less than 40 per cent of Budget Estimates for that year; or

(ii)the fiscal deficit is higher than 45 per cent of Budget Estimates for that year; or

(iii)the revenue deficit is higher than 45 per cent of the Budget Estimates for that year;then-

(a)as required under sub-section (2) of Section 11 of the Act, the State Government shall take appropriate measures and (b) as required under sub-section 3(b) of Section 11 of the said Act, the Minister-in-charge of the Ministry of Finance shall make a statement in the Legislature during the session immediately following the end of the second quarter detailing the corrective measures taken and the prospects for the fiscal deficit of that financial year.

Form FI(See Rales 3 and 4)Macro Economic Framework Statement

1. Overview of the State Economy. - [This paragraph shall contain a synoptic analysis of trend in the rate of growth of output. Information on key macroeconomic indicators shall be presented in the table at the end of this form.]

2. GSDP Growth. - [This paragraph shall contain an analysis of trends is overall GSDP growth and its sectoral composition.]

3. Overview of State Government Finances. - [This paragraph shall detail the developments in State Finances including an analysis of trends in revenue collections and expenditure, and the important fiscal deficit and debt indicators and expenditure, and the important fiscal deficit and debt indicators and the measures taken to improve the financial position of the State Government. Trends in State Government finances shall be presented in the format appended. This will, inter alia, indicate the developments related to the Consolidated Sinking Fund, Guarantee Redemption Fund, and issuances of risk-weighted guarantees and Ways and Means Advances availed from the RBI. This paragraph may also cover analysis of finances of local bodies and State-level public sector undertakings including the progress made by them for compilation/finalization of annual statements of accounts and Central transfers.]

4. Prospects. - [Based on the trends in major sectors presented in the previous Sections, an assessment shall be made regarding the growth prospects, along with the underlying assumptions. An assessment of fiscal prospects shall also be made.]

F-l (Contd.)Macro Economic Framework StatementEconomic Performance at a Glance

Table 1: Trends in Select Macroeconomic andFiscal Indicators
	Absolute Value(Rs. Crore)	Percentage Changes
	April-Reporting Period*	April-Reporting period*
	Previous Year	Current Year	Previous Year	Current Year
	Real Sector
1.	GSDP at factor cost
	(a) at current price
	(b) at 1993-94 price
2.	Agriculture Production
3.	Industrial Production
4.	Tertiary Sector Production
	Government Finances
1	Revenue Receipts (2+3)
2	Tax Revenue (2.1+2.2)
2.1	Own Tax Revenue
2.2	State's Share in Central Taxes
3	Non-Tax Revenue 3.1+3.2)
3.1	State's Own Non Tax revenue
3.2	Central Transfers
4	Capital Receipts (5+6+7)
5	Recovery of loans
6	Other Receipts
7	Borrowing and other liabilities
8	Total Receipts (1+4)
9	Non-Plan Expenditure
10	Revenue Account of which:
11	(a) Interest payments(b) Subsides(c) Wages & Salaries(d) Pension Payments
12	Capital Account
13	Plan Expenditure
14	Revenue Account
15	Capital Account
16	Total Expenditure (9 + 13)
17	Revenue Expenditure (10 + 14)
18	Capital Expenditure (12 +15)
19	Revenue Deficit (17 - 1)
20	Fiscal Deficit (16 (1+5+6)}
21	Primary Deficit (20-1 la)
	Memo:
	Average amount of WMA from RBI^
	Average amount of OD from RBI^
	Number of days of OD
	Number of occasions of OD

* Date will relate to the period up to which information for the current year is available. To facilitate comparison, date of previous year correspondents to the same period of current year. Accordingly, reporting period may vary for different items.^ The average amount of WMA/OD is calculated by summing up the outstanding amount of WMA as on each day (including holidays) and dividing by the total number of days during April-Reporting period.Form F-2(See rule 4)Medium Term Fiscal Policy StatementA. Fiscal Indicators - Rolling Targets

	Previous Year (Y-2) Actuals	Current Year (Y-l) Budget Estimates (BE)	Current (Year Y-l) Revised Estimates (RE)	Ensuing Year (Y) Budget Estimates (BE)	Targets for next Two Years
Y+l	Y+2
1. Revenue Deficit as percentage of Total Revenue Receipts (TRR)2. Fiscal Deficit as percentage of GSDP3. Total outstanding Liabilities as percentage of GSDP4. [Any additional target (s)]

B. Assumptions underlying the Fiscal Indicators-

1. Revenue receipts

(a)Tax-revenue-Sectoral and GSDP growth rates

(b)Non-tax-revenue- Policy stance

(c)Devolution to Local Bodies

(d)Share of own tax revenue to total tax revenue

(e)Share of own non-tax revenue to total non-tax revenue

2. Capital receipts - Debt stock, repayment, fresh loans and policy stance

(a)Loans and advances from the Centre

(b)Special securities issued to the NSSF

(c)Recovery of loans and advances

(d)Borrowing from financial institutions

(e)Other receipts (net) - small savings, provident funds, etc.

(f)Outstanding Liabilities - Internal Debt and Other Liabilities

3. Total expenditure - Policy Stance

(g)Revenue account

(i)Interest payments - (a) on borrowings during the year (aggregate and category-wise); (b) on outstanding liabilities - (i) (aggregate and category-wise)

(ii)Major subsidies

(iii)Salaries

(iv)Pensions

(v)Others.

(h)Capital account

(i)Loans and advances

(ii)Capital Outlay

4. GSDP Growth

C. Assessment of sustainability relating to. - (i) The balance between receipts and expenditure in general and revenue receipts and revenue expenditure in particular. The Medium Term Fiscal Policy Statement may specify the tax-GSDP ratio, own tax-GSDP ratio and State's share in Central tax - GSDP ratio for the current year and subsequent two years with an assessment of the changes required for achieving it. It may discuss the non-tax revenues and the policies concerning the same. Expenditure on revenue account, both plan and non-plan, may be also discussed with particular emphasis on the measures proposed to meet the overall objectives. It may discuss policies to contain expenditure on salaries, pension, subsidies and interest payments. An assessment of the capital receipts shall be made, including the borrowings and other liabilities, as per policies spelt out. The statement shall also give projections for GSDP and discuss it on the basis of assumptions underlying the indicators in achieving the sustainability objective.(ii)The use of capital receipts including market borrowings for generating productive assets. The Medium Term Fiscal Policy Statement may specify the proposed use of capital receipts for generating productive assets in different categories. It may also spell out the proposed changes among these categories and discuss them in terms of the overall policy of the Government.(iii)The estimated yearly pension liabilities worked out on actuarial basis for the next ten years. In case it is not possible to calculate the pension liabilities on actuarial basis during the period of first three years after the coming into force of this Ordinance, the State Government may, during that period, estimate the pension liabilities by making forecasts on the basis of trend growth rates (i.e. average rate of growth of actual pension payments during the last three years for which data are available).Form F-3(See Rule 5)Fiscal Policy Strategy StatementA. - Fiscal Policy Overview: [This paragraph will present an overview of the fiscal policy currently in vogue.]B. - Fiscal policy for the ensuing year;[This paragraph shall have, inter alia, six sub-paragraphs dealing with-

(1)Tax Policy. - In the sub-paragraph on tax policy, major changes proposed to be introduced in direct and indirect taxes in the ensuing financial year will be presented. It shall contain an assessment of exemption in various taxes and how far it relates to principles regarding tax exemptions.

(2)Expenditure Policy. - Under expenditure policy, major changes proposed in the allocation for expenditure shall be indicated. It shall also contain an assessment of principles regarding the benefits and target group of beneficiaries.

(3)Borrowings and Other Liabilities-Lending and Investments. - In this sub-paragraph on borrowings, the policy relating to internal debt, including the access to WMA/OD facility from the Reserve Bank of India, Government lending, investments and other activities; including principles regarding average maturity structure, bunching of repayments, etc., shall be indicated. The borrowings by Public Sector Undertakings and Special Purpose Vehicle, lending, investments, pricing of user charges on public goods and utilities and description of other activities, and activities of Public Sector Undertaking which have potential budgetary implications; and the key fiscal measures and targets pertaining to each of these shall be indicated.

(4)Consolidated Sinking Fund. - In this sub-paragraph, the policy related to the Consolidated Sinking Fund (CSF) shall be indicated.

(5)Contingent and other Liabilities. - Any change in the policy on contingent and other liabilities, in particular guarantees, which have potential budgetary implications shall be indicated. Any change in the policy related to borrowings by special purpose vehicle (SPV) and other equivalent instruments where liability for repayment is on the State Government shall be indicated. The policy on building up of the Guarantee Redemption Fund (GRF) and commission charges/collected for guarantees issued shall also be indicated.

(6)Levy of User Charges. - Any change proposed in the levy of user charges of public services shall be spelt out.C. Strategic priorities for the ensuring year:

(1)Resource mobilization for the ensuing financial year through tax, non-tax and other receipts shall be spelt out.

(2)The broad principles underlying the expenditure management during the ensuing year shall be spelt out.

(3)Priorities relating to management of public debt proposed during the ensuing year shall be indicated.]D. Rationale for Policy changes:

(1)The rationale for policy changes consistent with the Medium Term Fiscal Policy Statement, in respect of taxes proposed in the ensuing Budget shall be spelt out.

(2)The rationale for major policy changes in respect of budgeted expenditure including expenditure on subsidies and pensions shall be indicated.

(3)Rationale for changes, if any, proposed in the management of the public debt shall be indicated.

(4)The need for changes, if any, proposed in respect of the charges for public utilities shall be spelt out.]E. Policy Evaluation:[The 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 Policy Statement.]Form D-1(See Rule 61)Select Fiscal Indicators

	Item	Previous Year(Actuals)	Current Year(RE)
1.	Gross Fiscal Deficit as Percentage of GSDP
2.	Revenue Deficit as Percentage of Gross FiscalDeficit
3.	Revenue Deficit as Percentage of GSDP
4.	Revenue Deficit as Percentage of TRR
5.	Total Liabilities -GSDP Ratio (%)
6.	Total Liabilities - Total Revenue Receipts (%)
7.	Total Liabilities - State's Own Revenue Receipts(%)
8.	State's Own Revenue Receipts to RevenueExpenditure (%)
9.	Capital Outlay as Percentage of Gross FiscalDeficit
10.	Interest Payment as Percentage of RevenueReceipts
11.	Salary Expenditure as Percentage of RevenueReceipts
12.	Pension Expenditure as Percentage of RevenueReceipts
13.	Non-developmental Expenditure as Percentage ofaggregate disbursements
14.	Gross Transfers from the Center as Percentageof Aggregate Disbursements
15.	Non-tax Revenue as Percentage of TRR

Form D-2(See Rule 6)A. Components of State Government Liabilities

Category	Raised during the Fiscal Year	Repayment/Redemption during the Fiscal Year	Outstanding Amount(End-March)
Previous Year(Actuals)	Current Year(RE)	Previous Year(Actuals)	Current Year(RE)	Previous Year(Actuals)	Current Year(RE)
Market Borrowings
Loans from Centre
Special Securities issued to the NSSF
Borrowings from Financial Institutions / Banks
WMA/OD from RBI
Small Savings, Provident Funds, etc
Reserve Funds/ Deposits
Other Liabilities
Total

Form D-2(See Rule 6)B. Weighted Average Interest Rates on State Government Liabilities (per cent)

	Raised during the Fiscal Year^	Outstanding Amount (End-March)
Category	Previous Year(Actuals)	Current Year(RE)	Previous Year(Actuals)	Current year(RE)
Market Borrowings
Loans from Centre
Special Securities issued to the NSSF
Borrowings from Financial Institutions/ Banks
WMA/OD from RBI
Small Savings, Provident Funds, etc
Reserve Funds/Deposits
Other Liabilities
Total*

^ Weighted average interest rate where the respective weight is the amount borrowed. This is calculated on contractual basis and then annualized.* Weighted average interest rate where the weights are the amount of the respective components of State Government liabilities.Example 1Suppose the State Government raised resources from the market on three occasions during a fiscal year for an aggregate amount of Rs.6,000 crore. The annual rates of interest were 10 per cent, 12 per cent and 14 per cent, for Rs. 1,000 crore, Rs.2,000 crore and Rs.3,000 crore, respectively. The weighted average interest rate in respect of the resources raised during the year would, therefore, be[Rs. 1000*(10/100) + 2000* (12/100) + 3000* (14/100))/ (1000+2000+30000]*100 =(100+240+420)] *600 *100=(760/6000)* 100= 12.67%Example 2Suppose the previous and current years pertain to 2002-03 and 2003-04. Suppose the total outstanding amount of special securities issued by the State Government to the NSSF was Rs. 1,000 crore as at end-March 2002 and Rs. 1,500 crore as at end-March 2003. Suppose the total interest cost incurred by the State Government on this account during 2002-03 and 2003-04 amount to Rs. 100 crore and Rs. 120 crore, respectively. Then the weighted average interest cost on the outstanding amount of special securities issued to the NSSF during the previous year (i.e. 2002-03) is equal to 100-1000 = 10 per cent. Similarly, the weighted average interest cost on the outstanding amount of special securities issued to the NSSF during the current year (i.e. 2003-04) is equal to 120/ 1500 = 8 per cent.Form D-3(See Rule 6)Consolidated Sinking Fund (CSF)

(Amount in Rs.Crore)

Outstanding Balance in CSF at the beginning ofthe previous year	Additions to CSF during the previous year	Withdrawals from CSF during the previous year	Outstanding balance in SCF at the end of theprevious year/ beginning of current year	(4)/Outstanding Stock of SLR Borrowings (%)	Additions to CSF during the current year	Withdraw also from CSF during the current year	Outstanding at the end of current year/beginning of ensuing year	(8)/Stock of SLR Borrowings (%)
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)

Form D-4(See Rule 6)Guarantees given by the Government

Category (No. of Guarantees within bracket)	Maximum AmountGuaranteed during the year(Rs. crore)	Outstanding at thebeginning of the year(Rs. crore)	Additions during theyear(Rs.crore)	Reductions during theyear (other than invoked during the year(Rs. crore)
1	2	3	4	5

Invoked during theyear(Rs. crore)	Outstanding at the endof the year(Rs. crore)	Guarantee Commissionof Fee(Rs. crore)	Remarks
Discharged	Not Discharged	Receivable	Received
6	7	8	9	10	11

Note. - Reporting year refers to the second year preceding the year for which the Budget is presented.Form D-5(See Rule 6)Outstanding Risk-weighted Guarantees

DefaultProbability	Risk weights (per cent)	Amount outstanding as in the Previous Year andthe Current Year	Risk weighted outstanding guarantee in theprevious year and the current year
Direct Liabilities	100
High Risk	75
Medium Risk	50
Low Risk	25
Very Low	5
Risk
Total
Outstanding

Note. - The risk-weights have been pre-specified for various risk categories.Form D-6(See Rule 6)Guarantee Redemption Fund (GRF)

(Amount in Rs. Crore)

Outstandinginvoked guarantees at the end of the previous year	Outstanding Amount in GRF at the end of theprevious year	Amount of Guarantees Likely to be Invoked duringthe current year	Addition to GRF during the current year	Withdrawal from the GRF during the current year	Outstanding Amount in GRF at the end of thecurrent year
(1)	(2)	(3)	(4)	(5)	(6)

Notes. - (i) As per the terms of the GRF, during each year, the Government is required to contribute an amount equivalent at least to 1/5th of the outstanding invoked guarantees plus an amount likely to be invoked as a result of the incremental guarantees issued during the year.

(ii)Previous year refers to the year preceding the current year.

Form D-7(See Rule 6)Statement of Assets

	Assets at the Beginning of the Reporting year	Assets acquired during the Reporting year	Cumulative total of assets at the end of theReporting year
	Book Value(Rs.cr.)	Book Value(Rs. cr.)	Book Value(Rs.cr.)
Financial assets:
Loans and advances
Loans to Local Bodies
Loans to companies
Loans to others
Equity Investment
Shares
Bonus shares
Investments in Gol
Dated securities/ Treasury Bills
Investments in 14-day
Intermediate Treasury
Bills
Other financial Investments
(please specify)
Total
Physical assets:
Land
Building- Office/Residential
Roads
Bridges
Irrigation Projects
Power projects
Other capital projects
Machinery & Equipment
Office Equipment
Vehicles
Total

Notes. - 1. Assets above the threshold value of Rupees two lakh only to be recorded.

2. Reporting year refers to the second year preceding the year for which the annual financial statement and demands for grants are presented.

3. The Statement in respect of physical assets is to be prepared based on asset register maintained by the Government. The value to be indicated would be book-value, i.e. acquisition cost netted for depreciation/impairment.

Form D-8(See Rule 6)Tax Revenues Raised But Not Realised(principal taxes)

(As at the end of the reporting year)

Amount underdisputes(Rs. crore)

Amount not underdisputes(Rs. crore)

Grand Total

Major

Description

Over 1 year but less than two years

Over 2 years but less than 5 years

Over 5 years but less than 10 years

Over 10 years

Total

Over 1 year but less than two years

Over 2 years but less than 5 years

Over 5 years but less than 10 years

Over 10 years

Total

Taxes on Income & Expenditure

Agricultural Income tax

Taxes on Professions, Trades, Callings andemployment

Taxes on Property and capital Services

Land Revenue

Stamps and Registration Fees

Urban immovable property tax

Taxes on Commodities and Services

Sales Tax

Central Sales tax

Sales Tax on Motor Spirit and Lubricants

Surcharge on Sales Tax

State Excise Taxes on Vehicles

Other Taxes

Total

Note. - Reporting year refers to the second year preceding the year for which the annual financial statement and demands for grants are presented.Form D-9(See Rule 6)Statement of Miscellaneous Liabilities: Outstanding.

(Rs. crore)

	Outstanding Amount $
Major Works and Contracts
Committed liabilities in respect of land acquisition charges
Claims in respect of unpaid bills on works and supplies

$ The outstanding amount pertains to the end-March position for the year before the current year.Form D-10(See Rule 6)Number of Employees in Public Sector Undertakings & Aided Institutions and Expenditure of State Government

SI. No.	Sector Name	Total Employees as On 31-03	Related Expenditureduring(Rs. in crores)
On Salary	On Pension
1	State Government
2	Judiciary
3	Aided Educational Institutions
4	Zilla Praja Parishads
5	Mandal Praja Parishads
6	Gram Panchayats
7	Municipal Corporations
8	Municipalities
9	Urban Development Authorities
10	Agricultural Market Committees
11	Zilla Grandhalaya Samasthas
12	State Public Sector Undertakings
13	Universities
14	Cooperative institutions and other Government Bodies
15	Temples
	Total

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State of Andhra Pradesh - Act