The Assam Local Self-Government Fiscal Responsibility Act, 2011
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 THE ASSAM GAZETTE

### EXTRAORDINARY

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#### PUBLISHED BY THE AUTHORITY

                  - ? 297 f W p , W N K , 6 ® W , 2011, 15 W , 1933 (*1^)

No. 297 Dispur, Tuesday, 6th September, 20 11 ,15th Bhadra, 1933 (S.E.)

GOVERNMENT OF ASSAM

ORDERS BY THE GOVERNOR

LEGISLATIVE DEPARTMENT :: LEGISLATIVE BRANCH

**NOTIFICATION**

The 6th September, 2011

**No.LGL. 58/2009/60** The following Act of the Assam Legislative Assembly which

received the assent of the Governor is hereby published for general information.

ASSAM ACT NO. XX OF 2011

(Received the assent of Governor on 4th September, 2011)

**THE ASSAM LOCAL SELF-GOVERNMENT**

**FISCAL RESPONSIBILITY ACT, 2011.**


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1992 THE ASSAM GAZETTE EXTRAORDINARY SEPTEMBER 6 2011

AN

ACT

to provide for the responsibility of Local Self-Governments to ensure
best practice of prudent and financial management of their funds, in
order' to enhance the- scope for improving social and physical
infrastructure and human development, facilitate citizen’s

participation and transparency, adopt appropriate systems for fostering
greater transparency in fiscal operations with the use of a medium
term fiscal framework, and for matters connected therewith or
incidental thereto; -

**Preamble** Whereas it is expedient to provide for the responsibility of Local

Self-Governments to ensure best practice of prudent and financial
management of their funds, in order to enhance the scope for
improving social and physical infrastructure and human development,
facilitate citizen’s participation and transparency, adopt appropriate
systems for fostering greater transparency in fiscal operations with the
use of a medium term fiscal framework, and for matters connected
therewith or incidental thereto;

It is hereby enacted in the Sixty-second Year of the Republic of

the India as follows: -

**Short title,**
**extent and** **1.** (1) This Act may be called the Assam Local Sclf-Govemmeht Fiscal
**commencement** Responsibility Act, 2011.

(2) I t extends to the Local Self-Governments constituted under Part

IX and IX-A of the Constitution o f India as may be notified by the
State Government from time to time.

(3) It shall come into force on such date as the State Government

may, by notification in the Official Gazette, appoint.

**Definitions** **.2.** In this Act, unless the context otherwise requires, -

(a) “Local Self-Government Fund” means the revenue administered

by Panchayati Raj Institutions and Urban Local Bodies constituted
under Part IX and IX-A o f the Constitution of India and created by
the State Government for Panchayats at the District, Intermediate
and Village levels in terms of Article 243H (d) of the Constitution
and for Municipalities in terms of Article 243X (d) of the
Constitution;

(b) “Local Self-Government” means the Panchayati Raj Institutions

and Urban Local Bodies constituted under Part IX and IX-A o f the
Constitution of India;

(c) “accounting standard” means such accounting standards in respect

of Local Self-Governments, as may be prescribed;

(d) “annual budget” means the budget placed before the Local Self-

Government concerned as per the relevant Acts or the rules made
thereunder;

(e) “budget variance” means the difference between the budgeted

amount and the actuals for the financial year;

(f) “Controlling Authority” means any officer appointed as

controlling authority by the State Government for the purpose of
this Act and different controlling authorities may be appointed in
respect of different Local Self-Governments;

(g) “current year” means the year preceding the year for which budget

and Medium Term Fiscal Plan (MTFP) being presented;

(h) “fiscal indicators” means such measures as may be prescribed, for

evaluation of fiscal position o f Local Self-Governments;

A


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(i) “previous year” means the year preceding the current year;
0) “State Goveirsnisasi'* means the State Government of Assam in the

Finance Department.

**Medium Term** 3. (1) There shall he prepared in each financial year a Medium Term Fiscal
**Fiscal Plan** Plan along with the annual budget in respect of every Local Self-

Government and shall be rubmitted for approval of the concerned
authority o f the Local Self-Government.

(2) The Medium Term Fiscal Plan shah set forth a five-year rolling target

for the fiscal indicators with specification of underlying assumptions.

(3) In particular and without jy ejudtce to the provisions contained in sub­
section (2), the Medium Term. Fiscal Plan shall include an assessment
of sustainability relating to, -

(a) the balance between revenue receipts and revenue expenditures;

and

(b) .the use of capital receipts including borrowings for generating

productive assets,

(4) The Medium Tenn Fiscal Plan shall, inter alia, contain, -

(a) the medium term fiscal objectives of the Local Self-Government;
(b) the mission, objectives and goals of the Local Self-Government;
(c) an evaluation of the performance of the fiscal indicators in the

previous year vis-a-vis the targets sec out earlier, and the likely
performance in the current year as per revised estimates;

(d) a statement on recent trends and future prospects for growth and

development affecting fiscal position of the Local Self-
Government;

(e) the strategic priorities o f the Local Self-Government in the fiscal

area for the ensuing financial, year;

(f) the policies o f the Local Self-Government for the ensuing

financial year relating to expenditure, borrowings and other
liabilities, lending and investments and all such activities which

have potential budgetary implications and the key fiscal measures
and targets pertaining to each o f these;

(g) an evaluation as to ~cw the cuneiit policies o f die Local Self-

Government are in conformity vith the financial management
principles set cut in sec tion 4 and the fiscal objectives set out in

the Medium Term Fiscal Plan;

(h) a clear linkage cf the physical and financial targets;
(i) the key performance areas and corresponding performance

indicators in as much quantitative detail as possible.

(5) The Medium Term Fiscal Plan shall be the source document for the

preparation of the annual budget and shall address the prime needs of
the citizens as relevant to the specific Local Self-Government such as

water supply, construction of road, education, public health, solid
waste management and the like.

(6) The Medium Term Fiscal Plan shall have a functional focus and

provide for backend modalities such as fund based accounting system
(FBAS), computerization and a realistic and transparent budgeting
process.

(7) The Medium Term Fiscal Plan shall be in the form as prescribed in
Schedule-I.

**Financial** **4.** Every Local Self-Gc vemres'-t shall be guided by the following
**Management** financial management principles, rntsely.-
**Principles** (a) ensuring transparency m all stages o f policy making and

implementation;

(b) introducing performance linked budget policies;
(c) providing for effective sad sustained fiscal monitoring systems;

(d) introducing robust financial management principles;

(e) maintaining Local Self-Government’s debt at prudent levels;

(f) managing guarantees and other contingent liabilities prudently, with

particular reference to the quality and level of such liabilities;

(g) ensuring that policy decisions cf the Local Self-Government have due

regard to their current financial position and the financial implications
on future generations;


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(h) adopting the accounting framework for Local Self-Governments

prescribed by Comptroller and Auditor General of India;

(i) ensuring that borrowings are used for productive purposes and

accumulation of capital assets, and are not applied to finance current
expenditure;

(j) pursuing tax policies with due regard to economic efficiency and '

compliance costs;

(k) pursuing fiscal policies with due regard to cost recovery and equity;

(l) pursuing expenditure policies that would provide impetus for

economic growth, poverty reduction and improvement in human
welfare;

(m) ensuring that physical assets of the Local Self-Government are

properly maintained; •

(n) disclosing sufficient information to allow the public to scrutinize the

conduct of fiscal policy and the state of Local Self-Government
finances;

(o) ensuring that the Local Self-Government uses resources in ways that

give best value for money, and also ensure that public assets are put to
best possible use;

(p) managing expenditure consistent with the level o f revenue generated;
(q) ' formulating budget in a realistic and objective manner with due regard

to the general economic outlook and revenue prospects, and minimize
deviations during the course o f the year;

(r) ensuring collection of dues and taxes in an expeditious manner;
(s) ensuring discharge of current liabilities in a timely manner,

(t) adopting appropriate techniques for measuring the cost of file services

provided by the Local Self-Government

**Measures for** **5. (1 )** The Local Self-Government shall take suitable measures to ensure
**fiscal** greater transparency in its fiscal operation and in the preparation of
**transparency** the annual budget. For this purpose every Local Self-Government

shall ensure preparation and finalization of annual’budget for each
financial year commencing from 1[st] April and ending on 3 1[st] March.

(2 ) Provision shall be made for meetings at such intervals and»with citizen
forums as may be prescribed to review the operations and finances off
the Local Self-Government.

(3 ) In particular, and without prejudice to the generality of the foregoing
provisions, Local Self-Government shall, at the time of presentation o f
the annual budget, disclose in a statement in such form as may be
prescribed, -
(a) significant changes in the accounting standards, policies and
practices affecting or likely to affect the computation of fiscal
indicators;
(b) as far as practicable and consistent with protection of public
interest, the contingent liabilities created by way of guarantees and the
actual liabilities arising out o f execution of works by external agencies
where liability for repayment is on the Local Self-Government;

(4 ) The State Government shall ensure that such contingent liabilities are
communicated to the concerned Local Self-Government so that it shall

make sufficient provision in its budget.

**Measures to** **_6._** With a view to ensuring timely discharge of current liabilities
**enforce Fiscal** specially payment o f salaries to the employees, -
**Discipline**

(i) the Local Self-Government shall give appointment only against posts

sanctioned by the State Government and is vacant and also with laid
down rules, procedures and orders;

(ii) No new post shall be created without the prior concurrence of the

State Government;

(iii) the Local Self-Government shall not make more than one appointment

against one vacant post and shall not make appointment on leave
vacancy and vacancy against suspended employee;

(iv) the letter of appointment against any vacant post shall contain the

identity of the post in the manner as may be prescribed;


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posts shall contain names of persons equal to the number of vacant
posts notified at the time o f calling for applications for filling up the
posts;

(vi) the Local Self-Government shall not regularize or upgrade any person
against vacant post without the sanction o f the State Government;

(vii) before awarding for execution of any work and rendering any supply

of materials and services which create liability on the Local Self-
Government, the authorities of the Local Self-Government exercising
delegated financial power shall first issue ad m in is tra tiv e approval or
financial sanction for the work or the order o f supply as the case may
be, in compliance with the existing rules, procedures and guidelines
and further rules, procedures and guidelines that may be prescribed
from time to time;

(viii) before awarding the settlement of Hats, Markets, Fisheries, Ghats or
any other facility of the Local Self-Government for revenue earning

the laid down rules, procedures and guidelines and further rules,
procedures and guidelines that may be prescribed from time to time,
shall be followed;

(ix) the Local Self-Government shall maintain a register of assets and

liabilities and all documents year wise, as prescribed under the
concerned Acts and the rules framed thereunder.

Measure to 7. (1) The State Government Audit (Local Fund) shall enforce compliance

enforce with the provisions of this Act and the rules made thereunder,

compliance to (2 ) The State Government Audit (Local Fund) may oversee the

**this Act** compliance and a suitable mechanism may be notified by the State
Government regarding the submission of periodical review reports.

(3 ) The State Government shall ensure that the Local Self-Government
shall comply with the provisions of the relevant Act and the rules
relating to budget and the budget prepared is in accordance with the
Medium Term Fiscal Plan already approved and variations, if any, are
explained.

(4 ) The Local Self-Government shall prepare a budget variance report and
submit it to the Controlling Authority within such time and in such*

, form as may be prescribed.

(5 ) The Local Self-Government shall prepare receipts and payments
account, income and expenditure account and a balance sheet as may
he prescribed.

(6 ) Audit o f accounts o f the Local Self-Government shall be conducted by
the auditor appointed under the relevant Acts and the Rules and orders

, issued thereunder by the concerned authority and the report shall be
submitted to the concerned authorities within the time stipulated.

(7 ) The Controlling Authorities shall be responsible to ensure strict follow

up action on the audit reports by the Local Self-Government and
slackness, if any, noticed in this behalf shall be reported to the State
Government for appropriate action against the Local Self-Government
in default.

(8 ) The State Government may, by notification, constitute a Local Self-
Government Fund Audit Overseeing Authority comprising of such
officers and having such powers as may he specified in the
notification. The Local Self-Government Fund Audit Overseeing
Authority shall submit to the State Government periodical report on
compliance to audit reports by the Local Self-Government authority,
as may be prescribed.

(9 ) The Assam Legislative Assembly may by notification, constitute a
Local Self-Government Fund Accounts Committee with similar
powers and functions as that of Public Accounts Committee of the
Assam Legislative Assembly to oversee the outstanding audit ‘paras
relating to non-compliance o f this Act.

(1 0) The State Government may withhold release of funds to any local
self-government authority which fails to furnish accounts to the
concerned authority within six months from the end of the financial
year.


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appropriate internal audit measures and sustainable computerization
programme using appropriate technology.

**FabUcation of** **8.** (1) Every Local Self-Government shall publish the Medium Term Fiscal
**financial** Plan (MTFP), the annual budget, annual accounts and the annual
**document and** report together with the certified annual accounts in such manner as
**annual report** may be prescribed.

(2) Every Local Self-Government shall, within six months from the end

of the financial year submit a copy of its annual report together with
the certified annual accounts to the State Government and the State
Government shall cause the annual report together with the certified
annual'accounts to be laid, as soon as may be they are received, before
the House o f the State Legislative Assembly.

**Offences and** 9. (1) Whoever violates any one or more of the provisions of section 6 shall
**Penalties** commit an offence which shall be punishable with rigorous

imprisonment for a term which may extend to three years.

(2) Whoever causes financial loss to the authority willfully and with
malafide intention, by under assessment or under realizations of
revenue due to the Local Self-Government or by incurring
unauthorized expenditure shall commit an offence which shall be
punishable with rigorous imprisonment fo r a term which may extend
to three years and / or recovery of the amount of financial loss with
interest.

(3) A person who abets any o f the offences as aforesaid shall be liable for
the same punishment as provided for the offence.

(4) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (Assam Act, No.2 of 1974), the offences committed
under this Act shall be treated as cognizable offencesto be triable by a
Magistrate not lower in the rank than a Judicial Magistrate of First
Class.

**Power to make** 10. (1) Hie State Government may, by notification in the Official'Gazette and
**rules** after previous publication, make rules for carrying out all or any of the'

putposes of this Act.

(2) All rules made by the State Government under this Act shall, as soon

as may be after they are made, be laid before Assam Legislative
Assembly, while it is in session for a total period of not less than
fourteen days, which may be comprised in one session or in two or
more successive sessions, and shall, unless some later date is
appointed, take effect from the date o f their publication in the Official
Gazette subject to such modifications or annulments as the Assam
Legislative Assembly may, during the said period agree to make, so
however, that any such modification or annulment shall be without
prejudice to the validity of anything previously done thereunder.

**Protection of** **11.** No suit, prosecution or other legal proceedings shall lie against the

**action taken in** State Government, any Local Self-Government or any officer or
**good faith** servant or any person acting under the direction of the State

Government or Local Self-Government in respect o f anything done or
intended to be done in good faith under this Act or any rule or order
made thereunder:

Provided that before declaring any such action to have been

done in good faith as aforesaid, the approval of State Government
shall be obtained.

**Application of** **12.** The provisions of this Act shall be applicable in addition to the

**other laws** provisions of any other law for the time being in force, to the extent

they are not inconsistent with the provisions of this Act aid the
provisions of this Act shall have effect notwithstanding anything
contrary contained in any other law for the time being in force.


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TH E A S S A M G A ZET T E. E X T R A O R D IN A R Y SEPTEM BER 6. 2011 1997

Removal of 13. If any difficulty arises in giving effect to the provisions o f this Act, the

difficulties State Government may by order, published in the O fficial Gazette, as

the occasion may require, do anything, which appears to it to be
necessary to remove the difficulty :

Provided that no order shall be made after the expiry o f a period

of two years from the date of commencement o f this Act.

##### Schedule - 1

 [See Section 3 (7)]

(FORM FO R PREPARATIO N AN D S UBM IS SI ON OF M EDIU M TER M FISCAL PLA N

UNDER SECT IO N 3)

FIS CAL IN DIC ATORS F Y FY F Y FY F Y

A . Revenue Account

1. Tax Revenues

(Details to be indicated)

£ L

J S

2. Non-Tax Revenues
$
(Details to be indicated)

(i)
(ii)                   -

4-

3. Plan Grants from the State Govt.             -
(Details to be indicated)

4. Non-Plan Grants from the State Govt.
(Details to be indicated)
5. Plan Grants from the Centre.
(Details to be indicated)
6. Non-Plan Grants from the Centre
(Details to be indicated)
7. Total Revenue Receipts (1 to 6 )

8. Revenue Expenditure (9+10)

9. Plan Expenditure

10. Non-Plan Expenditure (11 to 16)
11. Salary
12. Wages
13. Interest Payment
14. Pension
15. Maintenance
16. Others
17. Year-End Debt Outstanding (a+b)

(a) Loan from the State G ovt.
(i) Principal Amount Outstanding
(ii) Interest Overdue
(b)Loan Outside the State Govt.

(i) Principal Amount Outstanding X

(ii) Interest Overdue
18. Year-end Govt. Guaranteed Debt

Outstanding (i+ii)
(i) Principal Amount Outstanding
(ii) Interest Overdue


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THE ASSAM GAZETTE. EXTRAORDINARY. SEPTEMBER 6, 2011________ :

**B. Capital Account**

1. Capitol Outlay

2. Disbursement of loans and advances

3. Recovery o f loans and advances
4. Other Capital Receipts
**C. Revenue Deficit (-)/ Surplus (+)**
**D. Fiscal Deficit (-)/ Surplus (+)**
**E. Revenue Deficit as % o f Revenue Receipt**
F. Revenue Deficit as % GSDP
G. Fiscal Deficit as % o f GSDP
**H. Debt Stock as % of GSDP**

MOHD. A. HAQUE,

Secretary to the Government of Assam,

Legislative Department, Dispur.

GUW AHAH - Printed and published by the Dy. Director (P&S) Directorate of Ptg. and Sty., Assam Guwahati-21

(Ex-Gazette) No. 593-6004-310-6-9-2011.


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