Meghalaya to amend FRBM Act 

Shillong, Aug 25: The Meghalaya Cabinet has approved to amend the Meghalaya Fiscal Responsibility and Budget Management (FRBM) Act, 2006 in an attempt to maintain the State's fiscal deficit at three per cent of Gross State Domestic Product (GSDP). 

''The amendment was to ensure total outstanding liabilities on consolidated fund are not more than 28 per cent of GSDP and to maintain the fiscal deficit at 3 per cent of GSDP,'' Chief Minister Mukul Sangma said. 

Briefing reporters last night after chairing the cabinet meeting, Dr Sangma said the government wanted to ensure regulation in the functioning of the finance department and all departments concern to sustain attempt to maintain the fiscal health and added it was required to be structured in a manner so that by doing this the government would be able to derive maximum benefit. 

''The ammendment is to ensure the outstanding debt of the State will be aligned as recommended by the 13th Finance Commission and such outstanding debt expressed as percentage of GSDP shall be reduced from 32.7 per cent during 2011-12 to 31.7 per cent during 2014-15,'' Dr Sangma said. 

The Chief Minister said that FRBM Act was basically designed to ensure that the state government should in a position to maintain better fiscal health to ensure that fiscal deficit was always kept below three per cent and at the same time, to ensure that the total outstanding liabilities on the consolidated fund were not more than 28 per cent of the GSDP. 

The FRBM Act was enacted in Meghalaya in April 2006 to address issues of fiscal management and prudence and mandate transparency and sound fiscal management. 

The FRBM Act was enacted by Parliament in 2003 to bring in fiscal discipline and notified the FRBM Rules in July 2004.

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