Section 4 in Punjab Fiscal Responsibility and Budget Management Act, 2003
4. Fiscal management principles.
(1)The State Government shall take appropriate measures to eliminate the revenue deficit and contain fiscal deficit.(a)[ reduce the fiscal deficit from the financial year 2005-2006 so as to bring it down to three per cent of Gross State Domestic Product (GSDP) by the year 2009-2010; [Clause (a), (b) and (c) substituted by Punjab Act No. 1 of 2006.](b)reduce revenue deficit from the financial year 2005-2006, so as to bring it down to zero by the year 2008-2009 and generate revenue surplus thereafter;(c)attempt to bring the ratio of debt including contingent liabilities to Gross State Domestic Product (GSDP) down to twenty eight per cent within a period of five years from 2005-2006 to 2009-2010; and](d)cap outstanding guarantees on long term debt to eighty per cent of revenue receipts of the previous year guarantees on short term debt to be given only for working capital or food credit in which case this must be fully backed by physical stocks.(3)Subsequent to the announcement of the general elections by the Election Commission of India to the Punjab Legislative Assembly, the leaders of the two largest political parties in the State may request the Secretary of the Department of Finance of the State Government, to prepare approximate expenditure of the publicly announced proposals of either party, with a view to facilitate the public debate.(4)No act, which may lead to increase in the expenditure on Government employees, remission in State revenue or which may result in credit operations based on future revenue, other than the normal open market and other borrowings of the State Government conducted through the Reserve Bank, shall be undertaken within a period of six months before the general elections to the Punjab Legislative Assembly become due.(5)Notwithstanding anything contained in sub-section (2), the revenue deficit and fiscal deficit may be exceeded in the case of unforeseen demands on the finances of the State Government due to calamity declared by the State Government or the Central Government, as the case may be.(6)In case the revenue deficit and fiscal deficit specified in sub-section (2), cannot be met due to aforesaid calamity, the State Government shall identify the net fiscal cost of the calamity, and such cost would provide ceiling for extent of non-compliance to the specified limits.
