The fiscal management principles to ensure Fiscal Discipline in the State shall be as follows -
(A)Expenditure Management:
i) To rationalize and pursue expenditure policies that would provide impetus to economic growth, poverty reduction and improvement in human welfare;
ii) Manage the expenditure of the State in relation to its receipts potential so as to prevent as far as possible deterioration in its fiscal position; specially on the revenue account;
iii) To make effort to contain non plan expenditure with the sole objective of bringing down the deficit on the Balance from Current Revenue/Non Plan Gap;
iv) To reduce the expenditure on salaries and wages of the Government through an objective analysis on the relevancy of the existing posts and to abolish any identified vacant redundant posts;
(B) Resource Management: Tax:-
i) Undertake measures to improve the States own resources with an emphasis on cost recovery;
ii) To ensure a reasonable degree of stability and predictability with regard to rates in taxes and revenue expected from them;
iii) To pursue tax policy with due regard to economic efficiency, social equity and compliance cost;
iv) To maintain the integrity of the tax system by minimizing special incentives, concessions and exemptions;
Non-Tax:-
Pursue non tax policies to increase revenues, with due regard to cost recovery and equity;
(C)Debt Management:
i) To ensure that the policy decisions of the Government have due regard to the financial implications on the future generations;
ii) Maintain Government debt at sustainable level by bringing down the fiscal deficit in a phased manner to the level of 3 of GSDP;
iii) Manage guarantees and other contingent liabilities prudently with particular reference to the quality and level of such liabilities;
iv) To ensure that borrowing are used productive assets and accumulation of capital assets and are not used to finance revenue expenditures;
(D)Management of Public Sector undertakings:
Minimize the fiscal risk associated with management of public sector undertakings and utilities providing gods and services through a review of the performance of the State Public Sector Undertakings, including restructuring of those that are absolutely essential and closure of those no longer viable.;
(E) Budget Management:
Formulate a realistic budget with due regard to general economic outlook and revenue prospects and minimize deviation during the course of the year;
(F) Transparency in Fiscal Management:
Maintain transparency by disclosure of sufficient information to allow public scrutiny on the conduct of fiscal policy and the state of public finances.