gudie to telangana budget 2015

8/9/2019 Gudie to Telangana Budget 2015

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A GUIDE TO THE BUDGET

EATALA RAJENDER Minister for Finance

Issued by

FINANCE DEPARTMENT

GOVERNMENT OF TELANGANA


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Issued by

FINANCE DEPARTMENT

GOVERNMENT OF TELANGANA


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This booklet is intended for the benefit of the Hon'ble

Members of the Legislature. It briefly sets out the scope, structure,

procedures and techniques of Government budgeting and attempts to

familiarize the Hon'ble Members with the terms and expressions used

in the Budget documents.

The terms "Budget" and "Annual Financial Statement"

2. The term "Budget" is derived from the French word

"Bougette" which means a leather bag. The Chancellor of the

Exchequer in Britain originally carried the financial proposals for the

year to the House of Commons in a leather bag. Through usage,

gradually, the word "Budget" has come to be used to signify the

documents in the bag instead of the leather bag. The expression used

in the Constitution for the "Budget" however, is the "Annual Financial

Statement". Article 202 of the Constitution defines it as a statement ofthe estimated receipts and expenditure of the State for that year.

Budget and Legislative Control

3. One of the cardinal principles of the Parliamentary form of

Government is that all expenditure incurred by the State should be

specifically authorized by the Legislature. It is the Legislature which

has authority over public funds. The Government is only the

executive agency to give effect to the decisions of the Legislature on

all money matters. As it is not possible for the legislature to be in

session throughout the year to scrutinize and approve the day to day

monetary transactions of Government, a system has been evolved by

which the Government prepares a financial statement or Budget for

the ensuing year, showing all the anticipated receipts and expenditure

classified under certain broad heads of accounts.


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4. The Constitution of India requires that this statement known

as "Annual Financial Statement" shall be laid before the Legislature

and its approval obtained before any expenditure is incurred out of the

Consolidated Fund of the State. There are certain items of

expenditure, however, the incurring of which does not require

Legislature sanction in the sense that they are not voted upon. These

are the 'Charged' items of expenditure explained below.

5. We may now consider the structure of Governmental financial

transactions. All items of expenditure are broadly either "Charged" or

"Voted".

"Charged", "Voted" Expenditure

6. According to Article 202 (3) of the Constitution of India, the

expenditure on the following items is "Charged" on the Consolidated

Fund of the State.

(a) the emoluments and allowances of the Governor and other

expenditure relating to his office.

(b) the salaries and allowances of the Speaker and the Deputy

Speaker of the Legislative Assembly and in the case of a State

having Legislative Council, also of the Chairman and the

Deputy Chairman of the Legislative Council.

(c) debt charges for which the State is liable including interest,

sinking fund charges and redemption charges, and other

expenditure relating to the raising of loans and the service and

redemption of debt.

(d) expenditure in respect of the salaries and allowances of Judges

of any High Court.

(e) any sums required to satisfy any judgment, decree or award of

any court or arbitral tribunal.

(f) any other expenditure declared by this Constitution, or by the

Legislature of the State by law, to be so charged.


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7. According to Article 229(3) of the Constitution of India the

entire expenditure on administration of High Court shall be charged

upon the Consolidated Fund of the State. According to Article 322 of

the Constitution of India the expenditure on administration of State

Public Service Commission shall be charged on the Consolidated

Fund of the State.

8. The other expenditure is treated as voted expenditure. The

"Budget" or "Annual Financial Statement" has to show separately the

amounts required to meet the "Charged" expenditure and the "Voted"

expenditure. The Legislature can discuss the items of "Charged"

expenditure but such expenditure is not subject to the Vote of the

Legislature.

Division of the Annual Financial Statement

9. The "Annual Financial Statement" or "Budget" consists of the

following divisions.

(i) Consolidated Fund of the State.(ii) Contingency Fund of the State

(iii) Public Account of the State.

Consolidated Fund of the State

10. The term "Consolidated Fund" is an expression introduced by

the Constitution of India vide Article 266(1). The Consolidated Fund

of the State is formed out of all revenues received by the State

Government, all loans borrowed from Government of India, from

other Autonomous Institutions and the Public, loans raised through theissue of Treasury Bills, or ways and means advances and all moneys

received by the Government in recovery of loans and advances.

11. The transactions relating to the receipts and expenditure out of

the Consolidated Fund are accounted for in three different Sections:

(a) Revenue Account


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(b) Capital Account

(c) Loan Account

Revenue Account/ Revenue Receipts

12. Revenue Receipts Comprise:

(1) Tax Revenue:

Examples: Collections under Land Revenue, Stamps and

Registration Fees, Sales Tax, State Excise, Taxes on Vehicles,

Entertainment Tax, etc. and also share in Central Taxes.

(2) Non-tax Revenue:

Examples: Interest Receipts, Dividends on Capital

investments, Receipts of various departments like Fees for

Examinations, Tuition Fees, Receipts on Forest Produces, Receiptsfrom Mines and Minerals, etc. and also 'User Charges' collected by the

Departments for providing services.

(3) Grants-in-aid and Contributions:

Examples: Grants-in-aid from the Central Government for

various Plan and Non-Plan Schemes, Statutory grant under Article 275of the Constitution etc.

13. The statement styled as "A Statement of Revenue, Grants-in-

aid and Contributions" in Volume-I/1 of the Budget publications

shows the major head-wise estimates of receipts under Revenue

Account while the Budget Publication the "Detailed Estimates of

Revenue and Receipts - Volume-II" gives full details of the receiptsunder each major head.

Revenue Expenditure

14. The expenditure under Revenue Account is incurred foradministering the different departments of the Government, for

payment of interest charges on the borrowings of the Government, for


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relief measures on natural calamities and on the maintenance andrepairs of various capital assets like buildings, roads, irrigation

sources etc. Broadly speaking expenditure which does not result increation of assets is treated as revenue expenditure.

15. The statement styled as "D-Statement of Expenditure on

Revenue Account" in Volume-I/1 of the Budget Publications shows

the major head-wise estimates of this expenditure on revenue account.

The details of this expenditure are shown in Volume-III (Book No. 1-

17 of the Budget Publication). Each part in Volume--III for the

Budget Publication consists of the particulars of expenditure of all the

Heads Departments of a particular Department of the Secretariat. For

example the expenditure particulars of Animal Husbandry, Dairy

Development and Fisheries are available in Book 17 of Volume-III

Animal Husbandry and Fisheries Department.

Revenue Surplus or Deficit

16. When the expenditure on revenue account is less than the

revenue receipts, the difference is called the "Revenue Surplus" for the

year and when it is more, the difference is called the "Revenue

Deficit".

Capital Account

17. The Capital Account is the account of the expenditure of the

capital nature i.e on acquisition of concrete assets of a lasting nature

like purchase of land, construction of building, etc., which yield

revenue or which avoid a recurring expenditure to Government. All

Irrigation and Electricity Projects which are lasting assets and whichyield revenues to Government fall under Capital Assets and

expenditure on construction of such projects is accounted for under

Capital Account. The Buildings which save the Government from

recurring expenditure on rents are also considered as Capital Assets

and the expenditure on construction of these buildings is classified

under Capital Account. The expenditure on any work the cost of

which exceeds Rs.1 lakh or any group of works belonging to a


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comprehensive scheme, the cost of which exceeds Rs.5 lakhs is

being exhibited under the Capital Account. The expenditure on roads

including cost of machinery and tools is also treated as Capital

expenditure, if they exceed the above limits. The investments of the

State Government in various Public Undertakings, Co-operative

Institutions, etc., are also treated as Capital Expenditure. Any receipts

on Capital Account by way of recoveries or sale of Capital Assets are

taken as recovery of expenditure on Capital Account.

18. The major head-wise estimates of expenditure under capital

account are shown in the statement named as "E-Statement of Capital

Expenditure out side the Revenue Account" in Volume--I/1 of the

Budget Publications. The details of expenditure on Capital Accounts

are shown in Books 1 to 17 of Volume-III of the budget Publications.

Loan Account

19. The Loan Account is the account of Public Debt incurred and

discharged and of loans and advances by the State Government toLocal Bodies, Public Sector Undertakings, Government servants and

others and recoveries from them. Besides incurring the expenditure

on Revenue Account dealt with in previous paragraphs, the

Government have to find money for expenditure on Capital Works.

The Revenue Surpluses, if any, will not be adequate for meeting all

these developmental needs and there are no sufficient reserves for

meeting these items of expenditure. Government have therefore, to

borrow money from the Public in Open-market, from the Government

of India or other autonomous Corporations like Life Insurance

Corporation of India, General Insurance Corporation of India,

National Co-operative Development Corporation, Indian DairyCorporation, Reserve Bank of India, etc. These loans have to be

repaid on due dates. The moneys already lent to the Co-operative

Institutions, Municipalities, Public Sector Undertakings, Government

Servants etc., are recovered in installments on due dates. All these

transactions are accounted for under Loan Account.


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20. The statement styled as "B. Statement of Receipts under Public

Debt and Loans and Advances" in Volume - I/1 of the Budget

Publications shows the major head-wise estimates of loans borrowed

from the Government of India and other autonomous bodies and also

the recoveries made against the loans given to local bodies,

Institutions, Co-operative Institutions, individuals, etc. The statement

styled as "F. Statement of Disbursements under Public Debt and

Loans and Advances" in the same publication gives the major head-

wise estimates of repayment of loans borrowed by the State

Government and the loans proposed to be sanctioned by Government

to the above said Institutions, individuals, etc.

Contingency Fund of the State

21. According to Article 266 (3) of the Constitution of India, no

money shall be drawn from the Consolidated Fund of the State

without authorization by the Legislature for supplementary or

additional expenditure not contemplated in the Annual Financial

Statement for that year. Article 267(2) of the Constitution of India provides that the Legislature of a State may by Law establish a

Contingency Fund in the nature of an imprest into which shall be paid

from time to time such sums as determined by Law and the said Fund

shall be placed at the disposal of the Governor of State to enable him

to sanction advances out of such Fund for meeting unforeseen

expenditure arising in the course of the year pending authorization by

the Legislature. In pursuance of the above provisions of the

Constitution, the Contingency Fund of this State is being constituted

by the Telangana Contingency Fund Act, 2014 (to be enacted), as

amended subsequently from time to time. It is created by an

appropriation from the Consolidated Fund of the State. The proposedsize of the corpus of the Contingency Fund is Rs.50 crores. The

advances sanctioned from out of the Contingency Fund for meeting

unforeseen expenditure are paid back to the Fund by obtaining the

Vote of the Legislature for those amounts, either in the Supplementary

statement or in the Annual Financial Statement.


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Public Account

22. "Public Account" of the Government relates to the

transactions in respect of which Government acts as a banker, incurs

a liability to repay the moneys received or recoveries of the amounts

already paid. It also includes suspense and remittance heads which

are operated as mere adjusting heads pending final clearance either by

transfer to final heads of account or payment or recovery. All Public

Moneys received by or on behalf of the State Government which are

not creditable to the Consolidated Fund of the State are accounted for

under the "Public Account". Moneys are deposited in Government

treasuries by contractors, merchants etc., as Security Deposits.

Deposits are also made in Courts in connection with litigations. Local

Bodies, Panchayati Raj Institutions keep their funds in Government

treasuries. Various Corporations, Companies, Boards etc., are required

to keep the funds released by Government for various purposes in

Public Account till they are actually utilized by them. The ProvidentFund accumulations of Government servants are retained by

Government till the funds become due for payment to the subscribers.

All such moneys do not actually belong to Government. But they

have to be accounted for in the same way as Government money and

they have to be paid to the parties concerned on the due dates. All

these transactions are entered in the "Public Account" as distinct from

the Consolidated Fund. The repayment of these amounts do not

require the vote of the Legislature, as they are in the nature of ordinary

banking transactions.

Demands for Grants

23. The estimates of expenditure from the Consolidated Fund

included in the Budget Estimates and required to be voted by the

Legislature are presented to the Legislative Assembly in the form of

demands for grants - vide Article 203(2) of the Constitution of India.

Generally, for each of the major services a demand is presented. Each


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demand normally includes the total provisions required for a service

i.e. provision on account of the Revenue Expenditure, Capital

Expenditure and Loans and Advances relating to the Service. Where,

however, expenditure on a service includes both voted and charged

items of expenditure, the charged items of expenditure also are

included in the demand presented for that service but the voted and

charged provisions are shown separately in that demand. In the

present accounting and budgetary procedures certain classes of

receipts and receipts of capital nature are taken in reduction of the

expenditure of the receiving Department. The major head-wise

estimates of expenditure included in the Annual Financial Statement

are for the net expenditure i.e after taking into account the recoveries.

The estimates of expenditure included in the demands for grants

however show the gross amounts, recoveries, and the net expenditure.

The Statement of Demands for Grants included in Volume-I/2 of the

Budget publications gives the demand-wise gross expenditure (both

voted and charged separately) the recoveries and the net expenditure

under Non-Plan and Plan separately. At present there are 40 demands

for Grants in the State Budget. These demands for grants have beenformulated Secretariat Department wise and HOD wise. In the

present structure all the provisions relating to a HOD will be shown at

one place in a particular Demand for grant. No HOD will cross more

than one demand for grant. The statement of demands is followed by

the details of demands for grants presented in Volume-III (Books 1 to

17). These detailed demands for grants show Head of the Department

wise details of the provisions included in the demands for grants for

expenditure for the year. They also give a break-up of the estimates,

i.e., details of the minor heads (Programmes) sub-heads (Organization

or Scheme), detailed heads (Object of expenditure) e.g. salaries,

wages, travel expenses, machinery and equipment, grants-in-aid, etc.,sub-details under detailed heads like Pay, Allowances, Dearness

Allowance under detailed head "010 Salaries" etc. The gross demands

for grants which are required to be actually voted by the Legislature

are presented to the Legislative Assembly Demand-wise in the form

of a Notice.


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Approval of the Budget by the Legislature

24. The Legislative Assembly have the power to assent or refuse

to assent to any demand or to assent to any demand subject to a

reduction of specified amount vide Article 203(2) of the Constitution

of India. After the demands are voted by the Assembly a bill called

'the Appropriation Bill' providing for the appropriation out of the

Consolidated Fund of the State i.e. , the moneys required to meet (a)

the grants made by the Legislature and (b) the expenditure charged on

the Consolidated Fund of the State, shall be introduced in the

Legislative Assembly and it shall be considered and passed by the

Legislature. The recommendation of the Governor is required for

introduction and consideration of the Appropriation Bill by the

Legislative Assembly. The Governor has to accord his assent to the

Appropriation Bill after it is passed by the Legislature. Then it

becomes the Appropriation Act which empowers the Government to

draw moneys from the Consolidated Fund of the State and spend in

accordance with the Vote of the Legislature.

Supplementary Demand

25. It often happens that in the course of a financial year,

expenditure has to be incurred on items and schemes for which

approval of the Legislature has not been taken in the Annual Financial

Statement (Budget) or expenditure has to be incurred on the items and

services in excess of the amount voted by the Legislature in the

Budget. It may not be practicable to obtain the approval of the

Legislature as and when an expenditure has to be incurred urgently on

new items or schemes during the course of the financial year. Hence,

in such cases the expenditure is incurred by Government bysanctioning advances from the Contingency Fund pending approval of

the Legislature. When the Legislature meets, a supplementary

statement showing the estimated expenditure on all such items is laid

before the Legislature and its approval taken. The advance sanctioned

from the Contingency Fund is recouped to the Fund when the

Legislature approves the expenditure on the scheme for which


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advance from the Contingency Fund has been sanctioned and when

the expenditure is transferred to the regular head under Consolidated

Fund.

New Service Schemes

26. As already stated, during the course of the year, Government

may have to sanction expenditure on new items and schemes in

anticipation of the approval of the Legislature. It may not be

practicable to take the vote of the Legislature for the expenditure on

each and every small item like the employment of staff in an office

to cope with the increased work, or purchase of some amenities for an

office such as furniture, duplicator etc. The expenditure on such small

items is incurred by Government from the savings if available under

the particular demand voted by the Legislature. However, if the

expenditure has to be incurred over and above the demand originally

voted by the Legislature, the approval of the Legislature is taken by

way of supplementary demand. The specific approval of the

Legislature is necessary on schemes which involve substantialexpenditure. The Public Accounts Committee had laid down certain

principles for determining the schemes on which expenditure should

not be incurred without the approval of the Legislature. Such schemes

are treated as 'New Service' Schemes. For example the reorganization

of a district or administrative unit the cost of which exceeds Rs.2

lakhs per annum (recurring) or Rs.3 lakhs per annum (non-recurring),

sanction of grants exceeding Rs.1.25 lakh per annum recurring or

Rs.5.00 lakhs per annum non-recurring, the construction of new

Building or Road work or Irrigation Work the cost of which exceeds

Rs.10 lakhs are classified as 'New Service' Schemes.


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Comptroller & Auditor General and Accountant General

27. Through the system of voting on demands for grants and

passing of the Appropriation Bill, the Legislature exercises control

over the drawal and utilization of public funds, this control can be

effective only if there is an independent agency to watch the

expenditure on behalf of the Legislature. This function is exercised by

the Accountant General. The Comptroller & Auditor-General is an

authority under the Constitution of India independent of the Executive

and the Legislature, and is answerable to the President of India. The

Accountant General as an agent of the C&AG in the State, keeps

watch on the expenditure with reference to the Annual Financial

Statement and Supplementary Financial Statement as voted by the

Legislature. The Treasury Officers under the guidance of the

Accountant General maintain the monetary transactions of

Government and communicate them to the Accountant General every

month after compilation. The Accountant General keeps watch over

the sanctions issued by Government as also the expenditure incurred

thereon and ensures that the expenditure under each demand as voted by the Legislature is not exceeded and no expenditure is incurred and

on 'New Service Schemes' without the approval of the Legislature.

Public Accounts Committee

28. At the close of the financial year, the Accountant General

submits the “Audit Report” 'Finance Accounts' and the '

Appropriation Accounts' which analyse the financial transactions for

that year. These reports apart from exhibiting Government accounts

for the year show the serious financial irregularities if any committed

by the executive, for example spending in excess of the sanctionedgrants, substantial lapse of grants approved by the Legislature,

financial losses sustained by Government through fraud, negligence,

inefficiency etc., of Government servants, failure to collect the

estimated taxes, wasteful expenditure, etc. The reports are examined

by the Public Accounts Committee. This Committee is formed from

out of the Members of Legislature. It is intended to assist the


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Legislature in enforcing that the funds are spent by the Executive i.e.,

the Government in accordance with the approval of the Legislature as

expressed through the voting on Demands. The Committee after

considering the explanations offered by the concerned departments of

the executive, makes its own recommendations and places them

before the Legislature. It will thus be seen that the control exercised

by the Legislature over the financial transactions of the executive is

real and effective.

Contents of Budget Document

29. We may now consider the contents of the Budget Publications

which are presented to the Legislature year after the year.

30. The Budget documents generally contain four sets of figures as

indicated below:

(i) The Accounts of the previous year.

(ii) Budget Estimates of the current year as originally

presented to the Legislature.

(iii) Revised Estimate for the current year.

(iv) Budget Estimate for the ensuing year

31. As Telangana is a new State, and since this is the first budget

after formation of the State, the columns relating to previous years

Accounts are left blank. The figures of the years previous to the

Budget year are given only for comparison. No discussion or voting

is called for on the figures of earlier years. The Revised Estimates

take note of actual trend of receipts and payments during the year and

are therefore, more realistic than the original Budget Estimate.

Accounting and Budget Classification

32. The estimates of receipts and expenditure in the Budget

Publications are shown according to the revised accounting

classification introduced with effect from 1st April, 1974 slightly

modified with effect from 01-04-1987 and revised object heads to be


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effective from 01.04.2002. This revised classification has been

designed to present more clearly the purposes and objectives of

Government expenditure in order to facilitate the process of decision

making at all levels, enhance the accountability of the management

and provide an additional tool for control of financial operations.

According to this classification the revenue receipts of the

Government have been brought under three distinct groups.

(1) Tax Revenue(2) Non-tax Revenue

(3) Grants-in-aid and Contributions

33. For the purposes of expenditure the transactions of

Government have been brought under different functions representing

major divisions of the efforts such as Education, Agriculture etc.

These different functions of Government have been grouped into 3

distinct sections. They are

(i) General Services: Covering Police, General Administration, etc.,

which are indispensable to the existence of an organized State;

(ii) Social Services: Covering activities associated with provision of

services needed for community living such as Education, Medical and

Health, Social Security Services, etc and

(iii) Economic Services: Dealing with activities or assistance

provided to agencies in the fields of production and trade, such as

Agriculture, Industry, Power, Irrigation, etc.

34. The revised classification consists of the following five tiers.

(1)

Sectors as explained above.

(2) Major Heads to represent the functions of Government

such as Crop Husbandry, Education, Medical and Public Health etc.,

i.e. the function Crop Husbandry is given the Major Head "2401. Crop

Husbandry", the function Education is given a Major Head "2202.

General Education", Medical "2210 Medical and Public Health" and


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so on. In this 4 digit code number the initial digist represents the

nature of transaction like Revenue, Capital, Loans etc.

(3) Minor Heads to indicate the programmes undertaken under

each function e.g., in the function "Crop Husbandry" the

"Commercial Crops, Plant Protection" etc. are treated as programmes

and they are given minor heads with three digit code numbers.

(4) Sub-Heads:- The sub-heads are to indicate the scheme or

organizations under each programme or minor head e.g. under the

programme "Commercial Crops", Cotton Development, Coconut

Development, etc. are considered as schemes. The sub-heads are

given two digit code numbers.

(5) Detailed Heads:- These are intended to indicate the exact

nature or form of expenditure under each scheme like Salaries, Wages,

Travel Expenses, etc. This is meant for itemizes control over

expenditure.

35. Standard detailed heads are being followed for budget and

accounting classification. Under the detailed heads, further break up

is also shown in the budget publications. Under the detailed head

"Salaries" the break up is "Pay, Allowances, Dearness Allowance,

etc."

36. The following Budget documents are supplied to the Members

of Legislature:

(1) Budget Speech.

(2) Volume-I/1 Annual Financial Statement and

Explanatory Memorandum on Budget.(3) Volume-I/2 Statement of Demands for grants.

(4) Volume-II - Detailed Estimates of Revenue and

Receipts.


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(5) Volume- III - Details of Demands for Grants for Non-

Plan and Plan. There are 17 parts in Volume-III, each

part contains demands for grants or departments coming

under each department of Secretariat.

(6) Volume-IV - Public Account

(7) Volume-V - Annexures to Budget.

(8) Volume-VI - Budget-in-brief.

(9) Volume-VII/1 - Annual Plan

(10) Volume-VII/2 -Tribal Sub Plan (TSP)

(11) Volume-VII/3 - Scheduled Castes Sub - Plan

(12) Volume-VIII/1&2 - Appendices to the Budget

Estimates.

(13) Volume-IX - Analysis of the Demands for Grants by

Ministers.

(14) Volume-X - Government Commercial Undertakings

Supplement to the Detailed Budget Estimates.

(15) Notice of Demands for Grants

Budget Speech

37. The Budget Speech contains a review of the Financial Position

of the State and broad proposals made in the budget. The main

purpose of the Budget Speech is to explain the policies and

programmes of the Government, how they are going to be introduced

and implemented in future.

Annual Financial Statement and Explanatory Memorandum on

Budget Statement of Demands for grants (Volume - I) Detailed

Estimates of Revenue and Receipts (Volume- II) Details of Demands for Grants for Non-plan and Plan (Volume-III Parts 1 to 17)

38. The contents of these publications have been mentioned in the

paragraphs 9-17 above.


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Annexures to Budget Volume V

39. A number of appendices which give particulars of transactions

relating to repayment of loans to Government against the loans

obtained by the State Government, Statement showing the guarantees

given by Government and still outstanding, Statement showing Debt

position etc. are shown in this volume.

Appendices to the Budget Estimates

40. The Appendices (Volume VIII/1) and (Volume VIII/2) to the

Budget Estimates contain (1) the particulars of the strength of Officers

and Staff, the scale of pay attached to each post, and the provision

made in the Budget Estimates towards Pay of Officers and

Establishment; (2) the Major Head- wise particulars of the provisions

in the Budget Estimates under each object head such as Pay,

Allowances, Dearness Allowance, Office Expenses, Grants-in-Aid,Other Charges etc., both under Plan and Non-Plan; (3) statement

showing the amounts provided for assistance to Local Bodies

including Zilla Parishads, Mandal Parishads, Panchayats etc.; (4)

statement showing the provision made in the Budget for expenditure

on Scheduled Tribes; and (5) statement showing the provision made in

the Budget for expenditure on Scheduled Castes.

Government Commercial Undertakings

41. This is Supplement to the detailed Budget. It contains themanufacturing, trading and profit and loss accounts and the balance

sheet of the Government Commercial Undertakings in this State. As

the operations of these Undertakings are commercial in character, it is

necessary that the financial results of the Undertakings should be

expressed in the ordinary commercial form, so that the cost of

Undertaking may be correctly known. The Government system of


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accounts being on a purely cash basis, liabilities will not find a place

in these accounts but they should be included if the correct position

regarding the working of a commercial undertaking is to be

ascertained. It is not, therefore, sufficient to adopt the usual form of

Budget and Accounts in the case of these Undertakings. Capital,

Manufacturing, Trading and Profit and loss accounts are therefore

kept for these Undertakings by the departmental authorities in addition

to the usual Government accounts. The form of commercial accounts

adopted for this purpose (called Proforma Accounts) is determined by

the Government in consultation with the Comptroller and Auditor-

General.

Budget in Brief

42. This publication contains in brief, the information available in

other important Budget documents of the State and presents by means

of statistical tables and charts, the comparative picture of Telangana

State finances. The information regarding the expenditure in

important development sectors such as Education, Medical, Public

Health and Family Welfare, Water Supply and Sanitation, Irrigation,

Power, Welfare of Scheduled Castes, Scheduled Tribes and other

Backward Classes has also been shown in the form of charts.

Statement of Revenue Receipts

43. The estimates of Revenues are fixed based on the existing

laws, rules and orders.


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Notice of Demands for Grants

44. As already explained, every item of expenditure has to be

specifically authorized by the legislature. According to Article 203 (2)

of the Constitution of India, the estimates of expenditure which are

not charged on the Consolidated Fund are submitted to the Legislature

in the form of Demands. In pursuance of this provision, a notice of

Demands for Grants to be moved by the Minister concerned is

presented to the Legislature. In the case of Demand which concerns a

single Minister the Demand is moved by that Minister. In the case of

a composite Demand concerning more than one Minister, the Demand

is moved generally by the Minister under whose portfolio the larger

part of the Demand falls.

Annual Plan

45. This publication deals with the annual plan allocations

comprising Sectoral, Head of Development and Scheme wise detailsfor Budget. Since this is a new State proportionate share of combined

State ceilings have been indicated. However, approval is sought from

GOI/Planning Commission for amounts proposed in Annual Plan.

46. Volume-VII/2 deals with Tribal Sub Plan allocations

comprising Sectoral, Head of Development and Scheme wise details

for Budget. The allocations for Tribal Sub-Plan are made in

proporation to the Tribal population as per 2011 Censes.

47. Volume-VII/3 deals with Scheduled Castes Sub Plan

allocations comprising Sectoral, Head of Development and Schemewise details for Budget. The allocations for Scheduled Caste

Sub-Plan are made in proporation to the Scheduled Caste population

as per 2011 Censes.


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How to Refer Budget Documents

48. The Publications mentioned at items (4) to (6) in para 29

above give details of the estimates of receipts and expenditure by

major heads, sub-major heads, minor heads, sub-heads, detailed

heads and sub-detailed heads under certain detailed heads etc., in the

form prescribed by the President of India in consultation with

Comptroller and Auditor General of India for Government accounts.

According to this for Revenue Receipts major heads are given

numbers from 0020 to 1606 while the Revenue Expenditure heads are

from 2011 to 3606. The capital major heads are given numbers from

4055 to 5475 and the Public Debt major heads are given numbers

from 6001 to 6004 while the loan major heads are given numbers from

6075 to 7615. The numbers from 8001 to 8797 are given to Public

Account major heads. The numbers for major heads have been so

designed that generally receipt head corresponds to expenditure heads

under Revenue Account, Capital Account and Loan Account for a

particular function with a gap of 2000 in between each head e.g. the

major head for receipts under Medical and Public Health it is "0210Medical and Public Health" and for expenditure on Medical under

revenue account it is "2210. Medical and Public Health" for

expenditure under Capital Account on Medical and Public Health it is

"4210. Capital Outlay on Medical and Public Health" and for

expenditure on Loans for Medical and Public Health it is "6210". The

Major Heads are again divided into minor heads (there are sub-major

heads also in between major heads and minor heads in certain cases),

sub-heads, detailed heads and sub-detailed heads.

49. The Budget Publications give information for not onlyestimates of the Budget year but also the actuals in respect of previous

year and the Budget and Revised Estimates of the year prior to the

Budget year.


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Example – I

50. If the information regarding estimated receipts under "Sales

Tax" 2014-15 is required it can be obtained by referring to "0040.

Taxes on Sales, Trade etc." in Volume-II Detailed Estimates of

Revenue and Receipts, while the information regarding the

expenditure towards collection of Sales Tax can be gathered by

referring to "2040. Taxes on Sales, Trade etc." in Volume-III/4 of

Revenue Department.

Example – II

51. If provision made for Sri Ram Sagar Project is to be known, it

can be found by referring to the following heads of account in

Volume-III/13 Irrigation and Command Area Development

Department.Administration-cum-Chief Engineer, SRSP State-I, HOD.

Major Head: 4700 - Capital Outlay on Major Irrigation

Sub-Major Head: 01 - Major Irrigation

Minor Head: 101 – Sri Ram Sagar project

G.H.11. Normal State Plan

Example – III

52. If information regarding the provision made towards buildingsfor Hospitals and Dispensaries is to be known, it can be found by

referring to head of account "4210 Capital Outlay on Medical and

Pulbic Health - 01. Uban Health Services - MH.110 – Hospitals

and Dispensaries - GH.11. Normal State Plan - S.H.(71) Construction

of new buildings for OGH, Hyderabad in the Volume III/8, Medical

and Health Department.


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Conclusion

53. As will be seen from the foregoing paragraphs, the main

Budget Publications are "Annual Financial Statement, Volume-I,

Detailed Estimates of Revenue and Receipts, Volume-II, Details of

Demand for Grants, Volume-III, Part 1 to 17, Budget in Brief Vol.VI

and Annual Plan Vol.VII". Most of the information required

ordinarily will be found in these publications. I hope that this booklet

will be of substantial help to the Hon'ble Members of the Legislature

in their study and analysis of the Budget especially when each demand

comes up for disussion.
