The Fiscal Responsibility and Budget Management Act, 2003

THE FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT ACT, 2003

ARRANGEMENT OF SECTIONS
SECTIONS
1. Short title, extent and commencement.
2. Definitions.

THE FISCAL RESPONSIBILITY AND BUDGET MANAGEMENT ACT, 2003
ACT No. 39 OF 2003 [26th August , 2003.]

An Act to provide for the responsibility of the Central Government to ensure inter -generational equity in fiscal management and long-term macro-economic stability by removing fiscal impediments in the effective conduct of monetary policy and prudent debt management consistent with fiscal sustainability through limits on the Central Government borrowings, debt and deficits, greater transparency in fiscal operations of the Central Government and conducting fiscal policy in a medium-term framework and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Fifty-fourth Year of the Republic of India as follows: —
1. Short title, extent and commencement.—(1) This Act may be called the Fiscal Responsibility and Budget Management Act, 2003.
(2) It extends to the whole of India.
(3) It shall come into force on such date2 as the Central Government may, by notification in the Official Gazette, appoint in this behalf.

1. 
   

   Definitions.—In this Act, unless the context otherwise requires, — (a) ‘fiscal deficit’ means the excess of total disbursements, from the Consolidated Fund of India, excluding repayment of debt, over total receipts into the Fund (excluding the debt receipts), during a financial year;
   (b) ‘fiscal indicators’ means the measures such as numerical ceilings and proportions to gross domestic product, as may be prescribed, for evaluation of the fiscal position of the Central Government;
   (c) ‘general Government debt’ means the sum total of the debt of the Central Government and the State Governments, excluding inter-Governmental liabilities; (d) ‘gross domestic product’ means the sum of the gross value added by all resident production units plus that part of taxes, less subsidies, on products, which is not included in the valuation of output, during a financial year, reckoned at current market prices, as published by the Central Statistics Office from time to time ;
   (e) ‘prescribed’ means prescribed by rules made under this Act; (f) real gross domestic product means gross domestic product, reckoned at constant prices, as published by the Central Statistics Office from time to time;
   (g) ‘real output growth’ means growth in real gross domestic product.

   
   


2. 
   

   The words ‘achieving sufficient revenue surplus and’ omitted by Act 13 of 2018, s. 210 (w.e.f 31-3-2018).

   
   


3. 5th July, 2004, vide notification No. G.S.R. 395(E), dated 2nd July, 2004, see Gazette of India, Extraordinary, Part II, sec. 3(i).

The Fiscal Responsibility and Budget Management Act, 2003 provides for the responsibility of the Central Government to ensure inter-generational equity in fiscal management and long-term macro-economic stability by removing fiscal impediments in the effective conduct of monetary policy and prudent debt management consistent with fiscal sustainability through limits on the Central Government borrowings, debt and deficits, greater transparency in fiscal operations of the Central Government and conducting fiscal policy in a medium-term framework.

The Act includes provisions for fiscal policy statements to be laid before Parliament, fiscal management principles, measures for fiscal transparency, enforcement of compliance, power to make rules, protection of action taken in good faith, jurisdiction of civil courts barred, application of other laws not barred, and the power to remove difficulties.