Fiscal policy statements to be laid before Parliament

Section 3 of the Fiscal Responsibility and Budget Management Act, 2003 deals with fiscal policy statements to be laid before Parliament. The Central Government shall lay in each financial year before both Houses of Parliament the following statements of fiscal policy along with the annual financial statement and [demands for grants except the Medium-term Expenditure Framework Statement,] namely:-- (a) the Medium-term Fiscal Policy St The Act came into force on 05 Jul 2004.

(1) The Central Government shall lay in each financial year before both Houses of Parliament the following statements of fiscal policy along with the annual financial statement and ¹[demands for grants except the Medium-term Expenditure Framework Statement,] namely:--

(a) the Medium-term Fiscal Policy Statement;

(b) the Fiscal Policy Strategy Statement;

(c) the Macro-economic Framework Statement;

²[(d) the Medium-term Expenditure Framework Statement.]

²[(1A) The statements referred to in clauses (a) to (c) of sub-section (1) shall be followed up with the Medium-term Expenditure Framework Statement with detailed analysis of underlying assumptions.

(1B) The Central Government shall lay the Medium-term Expenditure Framework Statement referred to in clause (d) of sub-section (1) before both Houses of Parliament, immediately, following the session of Parliament in which the policy statements referred to in clauses (a) to (c) were laid under sub-section (1).]

(2) The Medium-term Fiscal Policy Statement shall set forth a three-year rolling target for prescribed fiscal indicators with specification of underlying assumptions.

(3) In particular, and without prejudice to the provisions contained in sub-section (2), the Medium-term Fiscal Policy Statement shall include an assessment of sustainability relating to--

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(ii) the use of capital receipts including market borrowings for generating productive assets.

(4) The Fiscal Policy Strategy Statement shall, inter alia, contain--

(a) the policies of the Central Government for the ensuing financial year relating to taxation, expenditure, market borrowings and other liabilities, lending and investments, pricing of administered goods and services, securities and description of other activities such as underwriting and guarantees which have potential budgetary implications;

(b) the strategic priorities of the Central Government for the ensuing financial year in the fiscal area;

(c) the key fiscal measures and rationale for any major deviation in fiscal measures pertaining to taxation, subsidy, expenditure, administered pricing and borrowings;

(d) an evaluation as to how the current policies of the Central Government are in conformity with the fiscal management principles set out in section 4 and the objectives set out in the Medium-term Fiscal Policy Statement.

(5) The Macro-economic Framework Statement shall contain an assessment of the growth prospects of the economy with specification of underlying assumptions.

(6) In particular and without prejudice to the generality of the foregoing provisions the Macroeconomic Framework Statement shall contain an assessment relating to--

(a) the growth in the gross domestic product;

(b) the fiscal balance of the Union Government as reflected in the ⁴*** gross fiscal balance;

(c) the external sector balance of the economy as reflected in the current account balance of the balance of payments.

⁵[(6A) (a) The Medium-term Expenditure Framework Statement shall set forth a three-year rolling target for prescribed expenditure indicators with specification of underlying assumptions and risk involved.

(b) In particular and without prejudice to the provisions contained in clause (a), the Medium-term Expenditure Framework Statement shall, inter alia, contain--

(i) the expenditure commitment of major policy changes involving new service, new instruments of service, new schemes and programmes;

(ii) the explicit contingent liabilities, which are in the form of stipulated annuity payments over a multi-year time-frame;

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(7) The Medium-term Fiscal Policy Statement, ⁷[the Fiscal Policy Strategy Statement, the Mediumterm Expenditure Framework Statement] and the Macro-economic Framework Statement referred to in sub-section (1) shall be in such form as may be prescribed.

Section 3, The Fiscal Responsibility and Budget Management Act, 2003 (Act 39 of 2003).