Shimla: Faced with financial constraints to eliminate revenue deficits and reduce fiscal deficits, the chief minister Prem Kumar Dhumal who is also the finance minister today introduced the HP Fiscal Responsibility and Budget Management (Amendment) Bill, 2011 (FRBM) which proposes to eliminate revenue deficit by 2011-12 and maintain a revenue surplus thereafter.
Earlier the law enacted in 2005 mandated for eliminating revenue deficit by March, 2009 and was to remain revenue surplus thereafter.
The amendment has been necessitated in order to meet the requirements of the 13th Finance Commission.
Besides proposing to maintain a revenue surplus from 2011-12, the amendment intends to contain fiscal deficit at 3.5 percent or less of the gross domestic product by 2010-11, 3 % or less by 2011-12 and maintain that level thereafter.
The amend also proposes to bind the state debt at 49.7 % level of Gross State Domestic Product (GSDP) in 2010-11; and 47% in 2011-12; 44.4 % in 2012-13; 42.1% in 2013-14 and 40.1 % in 2014-15.
The government also proposes to set up an independent mechanism for reviewing and monitoring the fiscal reform path set out under the act.