Section 4 in The Fiscal Responsibility And Budget Management Act, 2003
4. Fiscal management principles.—
(1)The Central Government shall take appropriate measures to reduce the fiscal deficit, revenue deficit and effective revenue deficit to eliminate the effective revenue deficit by the 31st March, 2018 and thereafter build up adequate effective revenue surplus and also to reach revenue deficit of not more than two per cent of Gross Domestic Product by the 31st March, 2018 and thereafter as may be prescribed by rules made by the Central Government.(2)The Central Government shall, by rules made by it, specify—(a)the annual targets for reduction of fiscal deficit, revenue deficit and effective revenue deficit during the period beginning with the commencement of this Act and ending on the 31st March, 2018;(b)the annual targets of assuming contingent liabilities in the form of guarantees and the total liabilities as a percentage of gross domestic product: Provided that the revenue deficit , effective revenue deficit and fiscal deficit may exceed such targets due to ground or grounds of national security or national calamity or such other exceptional grounds as the Central Government may specify:Provided further that the ground or grounds specified in the first proviso shall be placed before both Houses of Parliament, as soon as may be, after such deficit amount exceed the aforesaid targets.
