Amendment of section 4.
148. In section 4 of the Fiscal Responsibility Act,—
(a) for sub-section (1), the following sub-section shall be substituted, namely:—
"(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, 2015 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, 2015 and thereafter as may be prescribed by rules made by the Central Government.";
(b) in sub-section (2),—
(i) in clause (a),—
(A) for the words "fiscal deficit and revenue deficit", the words "fiscal deficit, revenue deficit and effective revenue deficit" shall be substituted;
(B) for the words, figures and letters "the 31st March, 2009", the words, figures and letters "the 31st March, 2015" shall be substituted;
(ii) in the first proviso, after the words "the revenue deficit,", the words ", effective revenue deficit" shall be inserted.
Notes on Clauses:
Clause 148 seeks to amend section 4 of the aforesaid Act relating to fiscal management principles. The existing provisions of sub-section (1) of the aforesaid section provide that the Central Government shall take appropriate measures to reduce the fiscal deficit and revenue deficit so as to eliminate revenue deficit by the 31st March, 2009 and thereafter build up adequate revenue surplus. Sub-section (2), inter alia, provides that the Central Government shall, by rules made by it, specify the annual targets for reduction of fiscal deficit and revenue deficit during the period beginning with the commencement of this Act and ending on 31st March, 2009.It is proposed to amend the aforesaid sub-section (1) so as to provide that 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, 2015 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, 2015 and thereafter as may be prescribed by rules made by the Central Government. It further seeks to amend the aforesaid sub-section (2) so as to include therein the expression “effective revenue deficit” and enhance the existing time period from 31st March, 2009 to 31st March, 2015.
