THE BUDGET DOCUMENTS
Annual Financial Statement
Under article 202 of the Constitution, a statement of estimated receipts and expenditure of the State Government has to be laid before Legislature in respect of every financial year which runs from 1st April to 31st March. This statement titled "Annual Financial Statement" is the main Budget document. The Annual Financial Statement shows the receipts and payments of Government under the three parts in which Government accounts are kept" (i) Consolidated Fund, (ii) Contingency Fund, and (iii) Public Account.
2. All revenues received by Government, loans raised by it, and also its receipts from recoveries of loans granted by it, form the Consolidated Fund. All expenditure of Government is incurred from the Consolidated Fund and no amount can be withdrawn from the Fund without authorisation from Legislature.
3. Occasions may arise when Government may have to meet urgent unforeseen expenditure pending authorisation from Legislature. The Contingency Fund is an imprest placed at the disposal of the Governor to incur such expenditure. Legislative approval for such expenditure and for withdrawal of an equivalent amount from the Consolidated Fund is subsequently obtained and the amount spent from Contingency Fund is recouped to the Fund. Rs. 40 crores is the total amount of the Fund.
4. Besides the normal receipts and expenditure of Government which relate to the Consolidated Fund, certain other transactions enter Government accounts, in respect of which Government acts more as a banker, for example, transaction relating to provident funds, Employee's Group Insurance Fund Scheme, other deposits etc. The moneys thus received are kept in the Public Account and the connected disbursements are also made therefrom. Generally speaking, Public Account funds do not belong to Government and have to be paid back some time or the other to the persons and authorities who deposited them. Legislative authorisation for payments from the Public Account is, therefore, not required. In a few cases, a part of the revenue of Government is set apart in separate funds for expenditure on specific objects like Energy development Fund, other development and Welfare Fund. These amounts are withdrawn from the Consolidated Fund with the approval of Legislature and kept in the Public Account for expenditure on the specific objects. The actual expenditure on the specific objects is, however, again submitted for vote of Legislature even though the moneys have already been earmarked by Legislature for transfer to the funds.
5. Under the Constitution, Budget has to distinguish expenditure on revenue account from other expenditure. Government Budget, therefore, comprises (i) Revenue Budget and (ii) Capital Budget.
6. Revenue Budget consists of the revenue receipts of Government (tax revenues and other revenues) and the expenditure met from these revenues. Tax revenues comprise proceeds of taxes and other duties levied by the State. The estimates of revenues receipts shown in the Annual Financial Statement take into account the effect of the taxation proposals made in the Finance Minister's Speech. Other receipts of Government mainly consist of interest and dividend on investments made by Government, fees, and other receipts for services rendered by Government. Revenue expenditure is for the normal running of Government departments and various services, interest charges on debt, financial assistance given by Government etc. Broadly speaking, expenditure which does not result in creation of assets is treated as revenue expenditure. All grants given to Local Bodies and other parties are also treated as revenue expenditure even though some of the grants may be for creation of assets.
7. Capital Budget consists of capital receipts and payments. The main items of capital receipts are loans raised by Government from public which are called Market Loans, borrowings by Government from Reserve Bank and other parties through sale of Treasury Bills, loans received from Government of India and bodies, and recoveries of loans granted by Government. Capital payments consist of capital expenditure on acquisition of assets like land, buildings, machinery, equipment, and loans and advances granted by State Government to Government companies, Corporations and other parties. Capital budget also incorporates transactions in the Public Debt.
Accounting classification
8. The estimates of receipts and disbursements in the Annual Financial Statement are shown according to the accounting classification prescribed under article 150 of the Constitution. This classification is intended to allow Legislature and the public to make a meaningful appreciation of allocation of resources and purposes of Government expenditure.
9. Under the Constitution, certain items of expenditure like emoluments of the Governor, salaries and allowances of the Speaker and the Deputy Speaker of the Assembly, salaries, allowances and pensions of Judges of the High Court and subordinates, Emoluments of Chairman of Public Service Commission, interest on and repayment of loans raised by Government and payments made to satisfy decrees of courts etc. are charged on the Consolidated Fund and are not required to be voted by the Assembly. The Annual Financial Statement shows the expenditure charged on the Consolidated Fund separately.
Demands for Grants
10. The estimates of expenditure from the Consolidated Fund included in the Annual Financial Statement and required to be voted by the Assembly are submitted in the form of Demand for Grants in pursuance of article 203(2) of the Constitution. Generally, one Demand for Grant is presented in respect of each Department. However, in respect of Departments more than one Demand is presented. Each Demand normally includes the total provisions required for a service, that is, provisions on account of revenue expenditure, capital expenditure, grants to Local Bodies and Public Undertakings and also loans and advances relating to the service. Where the provision for a service is entirely for expenditure charged on the Consolidated Fund, for example, interest payments, a separate Appropriation, as distinct from a Demand, is presented for that expenditure and it is not required to be voted by Assembly. Where, however, expenditure on a service includes both 'voted' and 'charged' items of expenditure, the latter are also included in the Demand presented for that service but the 'voted' and 'charged' provisions are shown separately in that Demand.
11. The Demands for Grants are presented to the Assembly along with the Annual Financial Statement. Each Demand first gives the totals of 'voted' and 'charged' expenditure as also the 'revenue' and 'capital' expenditure included in the Demand separately and also the grand total of the amount of expenditure for which Demand is presented. This is followed by the estimates of expenditure under different major heads of account. The break up of the expenditure under each major head between 'Plan' and 'Non-Plan' is also given. The amounts of recoveries taken in reduction of expenditure in the classification are also shown. A summary of Demands for Grants is also given at the beginning of this document, while details of 'New Service' or 'New Instrument of Service' such as purchase of a new machine, equipment, vehicle or commencement of a new scheme as well as including pay scale of the sanctioned posts etc. are indicated at the end of the document.
Finance Secretary's Memorandum
12. In the Finance Secretary's Memorandum summary of Revenue receipts (tax and non-tax), revenue expenditure, Capital expenditure, Plan and Non-Plan is shown separately. In addition to this, consolidated receipts and expenditure of Public Debt, Loans and Advances and Public Account are exhibited through which we have an information at one place the revenue deficit/surplus as well as deficit/surplus on Consolidated Fund and at the end of budget deficit/surplus. Besides the above, consolidated details of State's resources and financial assistance received from the Government of India for State Plan scheme are also given. Information of investment made by the State Government on securities and various activities is also available.
Budget Vol. - I
13. In this Budget Vol information on net amount of State revenue receipts, revenue expenditure, capital expenditure and public account is given.
Budget Vol.-II
14. Detailed information of State Government Revenue Receipts (tax and non-tax ) and Receipts as well as Expenditure of Public Account is given. Explanatory note is also given about Revenue Receipts and Public Account.
Budget Vol.-III
15. Summary of expenditure relating to non-plan and plan of various departments, demand wise with Major head and Minor heads is shown in this volume. Detailed explanatory note on expenditure is also given.
Budget Vol.-IV
16. In this volume the provision of major head wise expenditure made in different demands (with the break up of gross, recovery and net) and as well as information on new item of expenditure is given.
Budget Vol.-V
17. In this volume information about the guarantee given by the State Government to various Government undertakings and allotment of Government land on concessional rate is given.
Detailed Demandwise Books
18. Details of Demandwise non-plan and plan expenditure, Major head, Sub-major head, detailed head wise and scheme wise information is given.
Appropriation Bills
19. After the detailed discussion on Demands for Grants by the Assembly, approval to the withdrawal from the Consolidated Fund of the amounts so agreed for the amount so required to meet the expenditure charged on the Consolidated Fund is sought through the Appropriation Bill. Under article 204(3) of the Constitution, no amount can be withdrawn from the Consolidated Fund without the enactment of such a law by Legislative.
Vote on Account
20. Whenever the detailed discussion on all Demands for Grants is not completed on or before 31st March by the Legislature, the Appropriation on vote on Account Bill is sought for one or two months commencing from 1st April.
Volume-V Detailed Books
