Discussion on
AFRBM ACT, 2005
By
Pranab Sarma. A.F.S.
Joint Director, DoAT, Assam
• The Assam Fiscal Responsibility and
Budget Management Act, 2005
• Notification No. LGL.59/2005/13 dtd
17.05.2005.
DEFINATION
• Administrative Approval
• Annual Budget
• Financial Year
• Appointing Authorities
• Five Year Fiscal Plan
• Fiscal Deficit
First Five Years Plan (1951 – 1956)
• The Planning Commission of India,
established in 1950, was a key
institution for formulating India's
Five-Year Plans and driving
economic and social development.
• First Five year Plan….1951-56
• 2nd Five year Plan….1956-61
• 3rd Five year Plan….1961-66
• th
4 Five year Plan….1966-74
• th
5 Five year Plan….1974-79
• 12 th
Five year Plan….2012-17
• The Planning Commission of
India was replaced by the NITI
Aayog.
• NITI Aayog : National Institution for
Transforming India.
• It is a policy think tank of the
Government of India, established in 2015
to replace the Planning Commission.
• The estimated receipt for the financial year stands at Rs
2,62,913.92 cr., while the total expenditure is projected at Rs
2,60,959.24 cr., resulting in a budget surplus of Rs 1,954.68 cr.
• Revenue Expenditure: Rs. 1,17,225.96 crore
• Capital Expenditure: Rs. 38,759.18 crore
• Public Account Expenditure: Rs. 1,02,974.10 crore
• Contingency Fund Allocation: Rs. 2,000 crore
However, after adjusting the opening deficit of Rs 2,574.95
crore, the financial year is expected to close with a budget
deficit of Rs 620.27 crore.
• FISCAL DEFICIT
• TAX
• NON TAX
• INVESTMENT
• DEVIDENT
• INTEREST ON LOAN
Fiscal Deficit
• It means the excess of aggregate
disbursements (net of debt repayment
) from the Consolidated Fund of the
State over Revenue Receipts, recovery
of loans and non-debt capital receipts
during a Financial year.
• Non-debt capital receipts
are funds received by a
government that do not create a
future repayment obligation.
FISCAL DEFICIT
• A fiscal deficit occurs when a government's
total expenditure exceeds its total revenue,
excluding borrowing, within a specific fiscal
year.
• In simpler terms, it's the gap/ difference
between what a government spends and
what it earns through taxes and other
revenue sources.
Where Rupee Comes From..
Source of Revenue
Where Rupee Comes From..
• * State Tax Revenue
• * Non-Tax Revenue
• * Share of Central Taxes
• *Centrally Sponsored Schemes
• *Finance Commission Grant
• *Public Debt
• * Recoveries of Loan & Advances
• *Other Transfer / Grants to States with
Legislature.
REVENUE DEFICIT
REVENUE DEFICIT
• It means the excess of the
Revenue Expenditure over the
Revenue Receipt in a Financial
Year.
Revenue Surplus
• It means the excess of Revenue
Receipt over the Revenue
Expenditure.
Sanctioned Post
Total Liabilities
• It means liabilities upon the
Consolidated Fund and Public
Account of the State.
GDP
• Gross Domestic Product represents the total
monetary value of all goods and services
produced within a country's borders during a
specific period, typically a year.
The major components of GDP
• The major components of GDP are
consumption, government spending, net
exports (exports minus imports), and
investment.
GDP
Y = C + I + G + (X − M)
• Y (GDP)
• C (consumption)
• I (investment)
• G (government spending)
• X (exports)
• M (imports)
Rule-4
• Fiscal Management Principle:
• a. Manage expenditure
consistent with the revenue
generated.
• b. Maintain Govt. debt at
prudent level.
• c. Manage guarantees and other contingent
liabilities prudently with particular reference
to the quality and level of such liabilities.
• d. Ensure that the policy decisions of the Govt.
have due regard to the financial implications
on the future generations.
• e. Ensure that borrowing are used for
productive assets and accumulation of Capital
assets and are not applied to finance Revenue
Expenditure.
Sec.7: Measures to ensure
Fiscal
Discipline
•
Current liabilities of the Govt.
• 7. Measures to ensure Fiscal Discipline:-
•
(1) With a view to ensuring timely discharge of
current liabilities, especially payment of
salaries to the employees,
•
(a) The State Government or the Appointing
Authorities under it shall give appointments only
against a sanctioned post which is vacant and in
accordance with the laid down Rules, procedures
and orders.
• (b) Notwithstanding any other provision contained in any
Act or Rules, no new post shall be created in any
department of the State Government or in Autonomous
bodies including Public Sector Undertakings, Companies,
Statutory Bodies, Trusts, Societies and Cooperatives
Societies, which are under the State Government, without
the prior concurrence of the Finance Department.
•
(c) No appointment shall be made by the State Government
or the appointing authorities under it in the vacancies
arising out of transfer and leave of the incumbents in these
posts.
• (d) No appointment shall be made by the
State Government or the appointing
authorities under it, in a post in
anticipation of it's falling vacant in future.
•
• (e) the State Government or the
appointing authorities under it shall not
make more than one appointment
against one vacant post.
• (f) Any letter of appointment to any vacant
sanctioned post shall clearly indicate the identity of
the post in the manner as may be prescribed.
•
(g) Notwithstanding any other provision contained in
any Act or Rules, the select list prepared for the fresh
appointments to vacant sanctioned posts shall
contain names equal to the number of vacant posts
notified at the time of calling for applications for
filling up the posts.
Very very Important
• Sec.7(2):- Before awarding any work or starting a
construction work or awarding an order of supply of
goods and services which create liability on the
Consolidated Fund of the State, the State
Government or the authorities exercising delegated
financial powers shall first issue administrative
approval or financial sanction, for the work or the
order of supply as the case may be, in compliance
with the existing Rules, procedures and guidelines
and further Rules, procedures and guidelines that
may be prescribed from time to time.
• (3) Each Department shall maintain a register of
works and order of supplies of goods and services,
liabilities incurred against these works and orders
of supplies, liabilities cleared and liabilities
awaiting clearance, in a format as may be
prescribed:
• Provided that the Government may make Rules
not to sanction new work if the outstanding
liabilities in a Department exceed a limit as may
be prescribed.
8. Offences and Penalties:-
•
(1) Whoever violates any one or
more of the provisions of section
7 shall commit an offence which
shall be punishable with
rigorous imprisonment for a
term which may extend to three
years.
• (2) Whoever causes financial loss to the
State Government, wilfully and with
malafide intention, by under assessment
and/or under realization of revenue due to
the State Government and/ or by incurring
unauthorized expenditure shall commit an
offence which shall be punishable with
rigorous imprisonment for a term which
may extend to three years and/or recovery
of the amount of financial loss caused to
the State Government with interest.
• (3) A person who abets any of the offences
as aforesaid shall be liable for the same
punishment as provided for the offence.
•
• (4) Not withstanding anything contained in
Code of Criminal Procedure, 1973 the
offences committed under this Act shall be
treated as cognizable offences.
• (5) Offences under this Act shall be
triable by a Magistrate not lower in
rank than of a Judicial Magistrate of
1st class.
