Further, the States have signed Memorandum of Understanding (MoU) with the Union Ministry of Power to undertake reforms in a time-bound manner.
(v)  Institutional reforms  Faced with mounting deficits and market fatigue in States’ borrowings, States embarked on a rule-based pursuit of fiscal reforms by enacting the fiscal responsibility legislation (FRL), first  4  BIS Review 83/2009  by Karnataka (2002) and followed by Kerala, Punjab and Tamil Nadu (all in 2003). Uttar Pradesh enacted FRL in 2004.