Section 3:
Fiscal policy statements to be laid before Parliament.
(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--
3* * * * *
(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;
6* * * * *
(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.
Notes:
1. Subs. by Act 23 of 2012, s. 147, for "demand for grants" (w. e. f. 28-5-2012).
2. Ins. by s. 147, ibid. (w. e. f. 28-5-2012).
3. Item (i) omitted by Act 13 of 2018, s. 212 (w.e.f. 31-3-2018).
4. The words "revenue balance and" omitted by s. 212, ibid. (w.e.f. 31-3-2018)
5. Ins. by Act 23 of 2012, s. 147 (w. e. f. 28-5-2012).
6. Item (iii) omitted by Act 13 of 2018, s. 212, (w.e.f. 31-3-2018).
7. Subs. by Act 23 of 2012, s. 147, for "the Fiscal Policy Strategy Statement" (w.e.f. 28-5-2012).