Critics have questioned the effectiveness of the State Financial and Fiscal Discipline Act of 2018, publicised in the Royal Gazette on Thursday.
Piti Srisangnam, professor at the Faculty of Economics, Chulalongkorn University, said the law was just drafted for good image and it is not practical.
"The law cannot be done in practice and nobody will follow. Besides, there is no penalty stated in case of violation," he said.
"There is no quantitative indicator of what can be done in what situation, to what extent the budget deficit and debt is allowed."
The new law, which is meant to prevent a government from using populism policies, requires that members of the Cabinet strictly comply with financial and fiscal disciplines saying that if any conduct causes a burden to the government's finance, the government must well consider the cost and benefit as well as the economic and financial stability plus sustainability of the state budget.
Meanwhile, it requires setting up a committee on state fiscal and finance policies, whose members include the prime minister, finance minister as well as permanent secretary of finance, secretary-general of the National Economic and Social Development Board as well as the Budget Bureau director and the Bank of Thailand's governor.
Among others, a duty of the committee is to issue compensation rate for those responsible for the loss of the state in case damages happen.
He said both non-elected and elected governments are likely to use populism policies.
"If it's a non-elected government, it will use populist policies to please the people and boost the economy," he said.
"If it's an elected government, it would fear not being re-elected to be the government.
"Moreover, the government has a duty to boost the economy. They will do so by constructing roads, expressways, and infrastructure. Everybody wants to spend money, but where can we find the money?" he said adding that no government is willing to increase taxes as it would lose popularity.