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7/30/2019 budget matters.pdf
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Budget MattersSmt. S. Rupa
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The Business Rules
The Finance Department has developed fourgeneric Codes and Manuals
1. A.P. Treasury Code
2. A.P. Financial Code
3. A.P. Accounts Code
4. A.P. Budget Manual
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Budget Manual
AP Budget Manual outlines the process forformulation of the budget, changes to thebudget execution during the year, inparticular, it outlines the accountabilitiesof line Departments in the budget process.
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Part - I
a) The Structure of Budget Accounts
b) The Budget and AccountingClassification
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Part - II
Instructions for the Estimating Officersin Preparation of Budget Estimates
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What is Budget?
Under Article 202 of the Indian ConstitutionBudget is Annual Financial Statement ofthe State for each financialYearto be laid
before the Legislature.
A Statement of estimated receipts and
expenditure of the state for each financialyear is called Annual Financial Statement.Budget means estimated receipts and
expenditure.
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Why Budget?
Integral part of the society Provides road map for financial success
and independence
Increases socio, economic and politicalactivities:
Helps for setting of financial and physical
goals Prepares for emergency
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What does Budget contain?1. Consolidated Fund
Article 266 (1) of the constitution enumeratesthe following as constituting the fund
(i) all revenues received by the Government
(ii) all loans raised by the Govt., by issue oftreasury bills, loans or ways and means of
advances
(iii) all moneys received by Govt., inrepayment of loans
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Budget Classification
Revenue Account:
The account of current income and Expenditure of theState. The income is derived mainly from taxes and duties,
fees for services rendered fines and penalties, revenue
from Govt., estates such as forests etc.,
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Revenue AccountReceipts
Tax Revenue
Direct Taxes
(Income & ex., LandRevenue Stamps & RegOthers)
Indirect Tax (Sales Tax,Excise Duty, MotorVehicles tax etc.,)
Non Tax Revenue
Interest, dividends, Social Grants in aid
ExpenditureGeneral ServicesOrgans of State- Legislature,Governor, Council of Ministers,Administration of justice andelection. Fiscal Services -
Interest Payments,Administration Services (Publicservice administration, police,jails, fire finance etc.,
Social ServicesEducation, Health, Medical &Health Social welfare etc.,Economic ServicesAgriculture, Industry, IrrigationRD etc.,
C it l A t
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Capital Account(The account of expenditure of a capital naturesuch as the construction of buildings, irrigation
and electricity works)Receipts
Open MarketLoans
External Loans
Loans from RBI
ExpenditureGeneral ServicesOrgans of state, Fiscal Services,Pensions, Interest payments,administrative services
Social ServicesEducation, Health, Medical & Health,Social Welfare etc.,Economic ServicesAgriculture, Irrigation, Transport, Poweretc.,
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Loan Account(The account of public debt incurred and dischargedand of loans advances made by the State Govt., to
local bodies and recovered from them.
Loan Receipts
Loans and Advances
Open Market
operations
GoI borrowings
Loan Repayments
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Public Account: Article 266 (2)
Deposits received from the contractors,
merchants and Judicial deposits
Funds deposited by local bodies such aPR Institutions, Corporations, Companies
and Boards
Small savings, PF of Govt., servants
Deposits and advances
Suspense and Miscellaneous funds
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Contingency Fund : Article 267 (2)
Apart from contingency Fund there isanother fund called Contingency Fund
which shall be at the disposal of the
Governor of the State, created withRs200.00 Crs. It is for emergency
unforeseen and unavoidable expenditure.
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Structure of AccountsSect oral Classification
Revenue receipts : 0020 to 1999
Revenue expenditure : 2011 to 3999
Capital expenditure :4011 to 5999
Loans & Advances, : 6011 to 7999
Contingency Fund : 8000
Public Account : 8001 to 8999
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7TIER CLASSIFICATION
MAJOR HEAD(functions of the Govt.,) --- 4 DIGITS CODESUB MAJOR HEAD --- 2 DIGITS CODEMINOR HEAD
(under each function plan or non plan) --- 3 DIGITS CODEGROUP SUB HEAD --- 2 DIGITS CODE
SUB HEAD
(Organization / Programme) --- 2 DIGITS CODEDETAILED SUB HEAD --- 3 DIGITS CODE(Nature of expenditure)
SUB DETAILED HEAD --- 3 DIGITS CODE
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Sl.no Function ReceiptsHeads
RevenueAccount
Expenditure
HeadsRevenueAccount
Expenditure
Heads
CapitalAccount
Loans &AdvancesAccount
1.
Medical andpublichealth
0210 2210 4210 6210
2. Housing 0213 2213 4213 6213
3. RoadsTransport
1055 3055 5055
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Budget Preparation
Prescribed Formats sent to Disbursing Officers in July/ August
Grant
MajorHead/MinorHead
Sub Head/Detailed Head
Accounts forpreviousYear
BE for thecurrent Year
RE forCurrentYear
BE for theNext Year
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Preparation of Number Statements, BudgetEstimates and Revised Estimates
[Number Statements]A statement detailing particulars of posts in eachpermanent and Temporary both Gazetted andnon-gazetted) monthly pay special pay under
011- pay and 012 allowances
Para 16.20.1 of the AP Budget Manual, the Head
of the Department and other Estimating Officersare required to submit Number statements to theFinance Department by 1st August every year.
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Statement of posts in each permanentand Temporary, both Gazetted and non
gazettedHRA,CCA, Encashment of EL, Medical Re-imbursement, LTC, Educational
concessions, The details of vacant postsand the period likely to be vacant shouldbe indicated. The number statementsinrespect of posts under plan , non-planand grant-in-aid towards salaries shouldbe sent separately in the proforma I, II, &III in Annexure-I prescribed by Fin. Deptt.
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Preparation of Budget Estimates
Estimated receipts and expenditure under each
head of account during a financial year to bepresented to the Legislature.
It is based on the Departmental Estimates
submitted by the HODs and other EstimatingOfficers. They should prepare their estimates induplicate in the proforma in duplicate and sendone copy to finance department and another tothe administrative Department of the Secretariat
concerned by 1st
October. The AdministrativeDepartment will send with their comments withexplanatory note to Finance by 15th Octoberevery year.
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Preparation of Revised Estimates
An estimate of probable receipts andexpenditure under each head of accountduring the course of the year withreference to the actual transaction
recorded for the months of the year andanticipated expenditure for the remainingmonths. It must be very careful inpreparing the Revised Estimates as we
arrive the closing balance. It is the bestguide for the preparation of the next yearBudget.
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Grant No.
MJH/SMJH
MH
Accounts
2009-10
BudgetEstimate
2010-11
RevisedEstimate
2010-11
BudgetEstimate
2011-12
Opening balance
II. Revenue Receipts
1.Central Taxes
2.Tax Revenue
3.Non-Tax Rev.
4.Grants-in-aid
III. CapitalReceipts
5.Open Market
Loans6.Floating Debt
7.Loans from GOI
8.Other Loans
9.Deposits
Particulars Accounts Budget Revised Budget
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Particulars Accounts
2009-10
BudgetEstimate
2010-11
RevisedEstimate
2010-11
BudgetEstimate
2011-12
Non Plan ExpenditureOn Revenue Account
Of which Interest payments
Capital Disbursements
Loans
Plan Expenditure
Total Expenditure
Revenue Expr
Capital Expr.
Loans &Advances
Capital Disbursements
Overall Transaction
Closing Balance
Revenue Surplus
Fiscal Deficit
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The following documents are at presented to the legislature bythe finance ministers on the day appointed by the Governor
a) Annual Financial Statementb) Detail Budget Estimates of revenue
(Plan & Non- Plan)
c) Demands for grants
d) Detail estimates of debt account
(Receipts and Disbursements)
e) Appendix I (Details of Staff)
f) Appendix II (Details of Works)g) Provisions for assistants for local bodies
h) Budget for expenditure on STs
i) Budget for expenditure on SCs
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Finance Department consolidates the Revenueand the expenditure by December end andsubmits to M. Finance for examination.
In Jan, F.M. Prepares financial policy inconsultation with the Chief minister
Final submission to Cabinet for consideration
After the Cabinet approval, budget is ready forpresentation in February to the legislature.
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Finance Minister presents budget to theLegislature in the last week of February
General Discussion on Budget
Discussion on Demand for GrantsAppropriation Bill
Finance Bill
Vote on Account
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Vote on Account:
It Is a grant made in advance before commencement of the comingfinancial year in the respect of the new year pending voting on demandfor appropriation bill in the legislature.
After the Budget is presented to the legislative Assembly towards theend of Feb., the general discussion thereon, voting of the Demands forGrants and the legislation of the Appropriation act are normally expectedto be completed by the end of March, but in certain circumstances, alonger time may be allowed for general discussion, voting of demandsand the passing of the appropriation Bill, with which the work speciallythe work may not be completed and it is necessary to continue the workinto a part of the budget year also. On such occasions, demands foradvance grants in respect of the estimated expr., for a part of thebudget year may be presented to the LA. Thereafter the demands will bediscussed and voted on and finally passed as an appropriation Act in the
manner laid down in the constitution.
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Appropriation bill :
After voting for all the demands for grants the bill isintroduced and has to go before the both the houses inthe legislature (demand for grants) for sanction
Voted Expenditure:
The expenditure which requires vote of the LegislativeAssembly.
Charged Expenditure:
The Expenditure which is not subject to vote of theLegislative Assembly.
R l f L i l ti C il
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Role of Legislative Council
No power of amending and rejecting the
budget It can make recommendations to theAssembly within 14 days
Assembly may consider itsrecommendations or reject and include inthe budget.
After passing both the houses ,Appropriation bill or Finance bill submittedto the Governor for his consent.
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Governor may return it for reconsideration withina period of 10 days.
After Governor assent the bill becomes an act.
Appropriation act :
The appropriation bill is passed by both thehouses, it waits the Governors assent, then it willbecome an Act. The amount in the act became
sanctioned grant for expenditure.The administrative Departments, HODs and Sub-Ordinate Offices can incur the expenditure.
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Control of Expenditure
CCO-Chief Controlling Officer
SCO Subordinate Controlling Officer
DDO Drawing and Disbursing Officer
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Sub-ControllingOfficer
Chief Controlling Officer
DTO
STO
DTA
FINANCE
Secretary
LEGISLATIVEASSEMBLY
DDOs
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Budget Control
The CCO Should prepare and send the distribution
statement of funds made to their SubordinateOfficers quarterly wise, to the DTA. The DTA willscrutinize and authorize the distribution statementsto DTOs to admit the bills on quarterly basis. The
CCO may sent the distribution statement directly tothe SCOs and DTOs for admitting the claims.
The CCO/EO has to incur expenditure under planand non plan on quarterly basis where specific orderbeen given by the Finance Department.
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In respect of items which are exempted
from treasury control, the CCO may sendthe distribution statement directly to theSCOs and DTOs for admitting the bills.
GO Ms No. 207/Fin Plan (FW BG) Dept Dt7.12.1997 in relaxation of Treasury controlorders.
The following Departments are exemptedfrom budget control
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1. Raj Bhavan
2. High Court
3. Legislative Assembly4. A.P. Administrative Tribunal
5. All Secretariat Departments
6. APPSC7. Electricity Department
8. Forest Department & PWD LOC through
cheques9. A.P. College Service Commission
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SalariesEx-gratia payments
FTA
Pensions, Gratuities and Commuted ofpension Funeral Charges
Re app op iation ( Pa a 20 4 of B dget Man al ead ith
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Re-appropriation ( Para 20.4 of Budget Manual read withGovt Memo No. 6415-A/184/BG/A1/2002 Dt 11.03.2002)
Re-appropriation of funds from one unit ofappropriation (Detailed head) to another.
Re-appropriation funds between revenue torevenue, capital to capital loan to loan with
in the same grant.
Re-appropriation from Salaries to Salariesand Detailed/Sub detailed Heads to
130/131 Utility Payments from otherDetailed Heads/Sub-Detailed Heads, butnot vice versa
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Re-appropriation are not permitted
From one Grant to another Grant
From Plan to Non-Plan and vice versa
510-Motor vehicles, 530-Major works,
270-minor works, 272-maintenance,
520-machinery equipment, 210 supplies andmaterials from other detailed heads vice versa.
Expenses All anticipated savings should besurrounded before 25th of February with fullexplanations
Supplementary Estimates
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Supplementary Estimates
(Para 20.11 of Budget Manual )
The expenditure which is not covered by thebudget provision due to unavoidablecircumstances, such expenditure is to be
provided in the supplementary Estimates tocover the expenditure by budgetUnforeseen Expenditure A New Service.
during the financial year.
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Reconciliation of Departmental figures with those booked in thetreasuries and the figures booked in the Accountant GeneralsOffice (Para 19 of AP Budget Manual)
CCOSCOs/Unit Officers (All SCOs should furnish reconciledExpr., to CCO by the end of the month.
CCOAGs Office
Reconciliation Certificate to be issued on quarterly basis
The CCO shall get the figures of receipts and expenditureof the entire State and a certificate shall be issued to thePAO
The CAO (designated) has responsibility of reconciling theconsolidated statewide figures of receipts and expenditurewith AG Head wise.
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Performance budget:
A budget which exhibits not only the money
but also the physical targets is aperformance budget. (It should alwaysindicates the physical targets)
Zero based budget:
It is to start from zero base and view allactivities and priorities afresh and create abetter set up of allocations for the comingyear.
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Thank youMrs S. Rupa
9248005307