The Fiscal Policy Office (FPO) is drafting a monetary and fiscal bill that will include controls on spending for populist policies.
The Finance Ministry's think tank has taken experience from populist policies implemented by previous governments into account while drafting the bill, general-director Kritsada Jinavijarana said.
The Yingluck Shinawatra administration's rice-pledging scheme was an example of a populist policy that became a financial disaster.
The Pheu Thai government's subsidy, which offered pledging prices 40-50% above market prices for paddy, cost 878 billion baht after it was launched in the 2011-12 main crop, with debt of 580 billion left over. The scheme's loss is estimated at 400-500 billion baht.
Political parties in recent years have raced to offer populist policies aimed at winning votes, stoking concerns that such policies floated freely will lead the country into a fiscal mess.
The draft bill, if it comes into force, will strengthen Finance Ministry officials' ability to control budgets.
Mr Kritsada said the new law would prohibit running up public debt to more than 60% of the country's gross domestic product.
At present, the public debt limit at 60% is only a recommendation under the fiscal sustainability framework.
However, the new law would allow the finance minister to set a new ceiling in cases of emergency, Mr Kritsada said.
The bill aims to plug a loophole that allows the government to take revenue from some sources to use for particular purposes without including the money in the annual budget, he said.
At present, some revenue generated from excise tax on alcohol and cigarettes has been used to finance operations of the Thai Public Broadcasting Service, a TV channel service provider.
A Finance Ministry source who asked for anonymity said the idea to draft the bill had been floated since the ministry saw harmful signs from a lack of fiscal discipline after the 2007 constitution was imposed.