Delhi Government to Introduce FRBM Bill to Limit Borrowing and Ensure Fiscal Discipline
The Delhi government announced on Friday that it is preparing to introduce a Fiscal Responsibility and Budget Management (FRBM) bill to establish a structured framework for public finance management. The proposed legislation is planned to be tabled in the Assembly during the upcoming Winter Session.
According to officials, the bill aims to ensure long-term fiscal sustainability, enhance transparency, and set clear limits on government borrowing, expenditure, and debt management. It will mandate greater accountability in budgetary decisions to keep public finances stable.
The decision to introduce the bill follows a memorandum of understanding (MoU) signed between the Delhi government and the Reserve Bank of India (RBI). Under this MoU, the government raises funds through market borrowings at competitive rates to finance major infrastructure projects. Officials noted that because the government is actively taking loans, it has become necessary to fix a strict borrowing limit.
Once enacted, the law will make it mandatory for the government to present key fiscal documents alongside the annual Budget before the Legislative Assembly. These documents will include a Macroeconomic Framework Statement, which reflects the overall economic outlook, and a mid-term Fiscal Policy Statement detailing the government’s fiscal strategy and projections for the coming years.
The proposed bill will also outline broad fiscal objectives, including the reduction of the revenue deficit, containment of the fiscal deficit, and the maintenance of overall financial discipline.
To ensure compliance, the government is considering provisions for periodic reviews of fiscal performance. If there is a significant deviation from the set Budget targets, the government will be required to explain the reasons before the House and outline corrective measures. The bill is also expected to introduce independent reviews to assess compliance with the law.
The draft of the legislation is currently being finalised. Once completed, it will be placed before the Cabinet for approval before being forwarded to the Lt Governor for final nod.
