The Meghalaya cabinet on Tuesday approved the proposed amendment of the Meghalaya Fiscal Responsibility and Budget Management (FRBM) Act, 2006 to increase the state’s net borrowing ceiling by over one percent.
According to the FRBM Act, 2006, the ceiling of borrowing that the state can take in term of availing loans is 3 per cent of the GSDP.
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Information and public relations minister James K Sangma said that as state the government cannot exceed 3 per cent of the GSDP of the state for taking loan or borrowings, the cabinet has approved amendment of the FRBM Act by increasing the ceiling from an existing 3 per cent of the GSDP to 4.1 per cent.
“The government needs to borrow to tide over certain commitments or developmental programmes. Therefore, this relaxation will help the government go beyond 3 per cent to 4.1 per cent so that we can take more borrowings and tide over deficits we may have to bridge the gap for developmental projects,” James said.
The amendment bill will be placed in the state Assembly on March 19.
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James said that the government proposed that the amendment of the MFRBM Act, 2006 should be regularised by a regular enactment as earlier it was only in the form of an ordinance.