4.7. Modern Financial Management Practices

The modernisation of financial management within governments made great advances during the past ten years. The sheer scale of government means that such improvements had a material effect on fiscal outcomes. These include the introduction of accruals, capital charges, carry-overs of unused appropriations, and interest-bearing accounts.

Fiscal Responsibility and Budget Management Act (FRBMA) The Fiscal Responsibility and Budget Management Act (FRBMA) 2003 has been enacted by the Parliament to institutionalize fiscal discipline at both the centre and state level by setting targets including reduction of fiscal deficits and elimination of revenue deficit. It is a legal step to ensure fiscal discipline and fiscal consolidation in India.