THE ANDHRA PRADESH BUDGET MANUAL - ap-finance

620 Pages·2011·6.57 MB·English

THE ANDHRA PRADESH BUDGET MANUAL

(Corrected upto April, 2011)

FINANCE DEPARTMENT
ANDHRA PRADESH
HYDERABAD
THE ANDHRA PRADESH BUDGET MANUAL

(Corrected upto April, 2011)

FINANCE DEPARTMENT
ANDHRA PRADESH
HYDERABAD
PREFACE

Classification of transactions in Government Accounts on a function-cum-
programme basis was introduced from 1st April, 1974. This functional classification
was evolved with the twin objectives of reflecting Government transactions in terms
of functions, programmes and schemes and securing correspondence between
accounting classification and plan heads of development.

2. The Budget heads of account and rules of classification prior to 1974 were
not easily understood. Budget heads and plan heads (adopted by the Planning
Commission for Plan purposes) did not match and meaningful comparison between
these two became almost impossible. In order to obviate this and to enable easy
preparation of performance budgeting, the Administrative Reforms Commission
appointed by Government of India had made certain recommendations for changes
to the classification of budget heads. Based on these recommendations, the
Comptroller and Auditor General of India prescribed a new List of Major heads and
minor heads to come into force with effect from 1st April 1974. Andhra Pradesh
Government adopted these heads leaving certain functions and programmes that
were not needed by the State Government (given in Appendix-XI in Part III).

3. The budget manual incorporated these new heads of account. It also
presented at one place, the rules framed by the Finance Department for the
guidance of estimating officers and the Departments of Secretariat in the
preparation and examination of Budget Estimates and the control to be exercised on
expenditure so as to ensure that expenditure does not exceed the voted amount.
Five tier system of classification corresponding to Sectors, functions, programmes,
schemes and object heads has come into force for the first time in country to
facilitate global comparison on activities of Government. The manual is brought out
in three parts. Proposed changes from time to time have been explained in Part-I of
this manual. Part-II brings up to-date the various instructions to the estimating
officers for the preparation and examination of the Budget Estimates. Part-III
contained Appendices I to XI showing the list of Major and Minor Heads of Account
Acts and Rules etc.,

4. Due to increase in the gap between classification of plan programmes and
accounting classification over the years and to bring about a closer correlation
between plan schemes and account heads, Government of India constituted a
committee to review and rationalize the heads of account where required. We have
the present accounting classification with effect from the Budget for 1987-88 as
prescribed by the Controller General of Accounts in consultation with the Comptroller
and Auditor General of India. The basic principles and broad structure of accounts
remained as before and a few new sub-sectors have been introduced raising level
from function (major head) to sub-sector. Also minor heads have become major
heads because of their importance. Plan programmes have been provided at the
minor head level, wherever possible such that expenditure on plan programmes
could directly be extracted from accounts. The code numbers allotted to major
heads have been changed from three digits to four to provide room for
accommodating new functions, as and when they are evolved. The sub-major heads
have been changed to two-digit numerical code from the earlier alphabetical code
and the minor heads have been allotted three digit code numbers.

5. The Government of Andhra Pradesh has taken up the Revision of Budget
Manual as a part of implementation of World Bank assisted "Strengthening of Public
Financial Management in Andhra Pradesh" IDF Grant.

6. This Edition is being issued by Finance Department, Government of Andhra
Pradesh, Hyderabad after incorporating all the amendments as issued by the
Controller General of Accounts in the form of Correction slips upto April, 2011.

7. The fourth edition has been thoroughly reviewed and revised by Sri A.V.G.K.
Acharyulu, Deputy Secretary to Government (Retd.), Sri G.V. Somayajulu, Section
Officer (Retd.,), with the help of Sri P.V. Ramana Rao, Computer Analyst and Sri
K. Hari Krishna, under the guidance of Smt. Vasudha Mishra, I.A.S., Secretary to
Government (IF) and overall supervision of Sri G. Sudhir, I.A.S., Special Chief
Secretary to Government.

8. If any error, inaccuracy or omission is noticed, the undersigned will be
grateful and thankful if it is brought to his notice for correction in the next edition.

G. SUDHIR
Special Chief Secretary to Government
Finance Department

Date: May, 2011.
Government of Andhra Pradesh, Hyderabad

ii
PREFACE TO THE EARLIER EDITIONS
FIRST EDITION

The need for some far reaching reforms in the budgetary procedures has
been felt for a very long time. The existing heads of account and rules of
classification are not easily understood. Moreover they do not correspond to the
heads of development adopted by the Planning Commission for Plan purposes with
the result that a meaningful comparison of the plan and the budget becomes well
nigh impossible. In order to obviate this and to enable easy pteparationofperf-
6rmance budgeting, the Administrative Reforms Commission appointed by the
Government of India made certain recommendations for changes in the existing
system of classification and budgeting.

2. The Government of India appointed a team of officers to make detailed
recommendations on the above lines. Based on these recommendations the
Comptroller and Auditor General of India, had, under Article 150 of the Constitution
prescribed a new list of major and minor heads of account, to come into force with
effect from 1st April, 1974. the list of major heads and minor heads Sector-wise
adopted by the State Government is at Appendix II in Part-III.

3. The present budget manual incorporates these new heads of account. It
also presents on one place the rules framed by the Finance Department for the
guidance of estimating officers and the Departments of the Secretariat in the
preparation and examination of Budget Estimates and the control to be exercised on
expenditure so as to ensure that expenditure does not exceed the voted amount.

4. The new system of heads of account to come into force on 1st April, 1974
will have a five tier classification corresponding to sectors, functions, programmes,
schemes and inputs of Governmental activities.

5. The present volume is in three parts. The proposed changes in the
classification have been fully explained in Part-I of this Manual. Part-II brings up to-
date the various instructions to the estimating officers for the preparation and
examination of the Budget Estimates. Part-III contains Appendices I to V-B.,
Appendices VI to IX and Forms A to M are being brought out separately.

6. If any error, inaccuracy or omission is noticed, the undersigned will be
grateful and thankful if it is brought to his notice for correction in the next edition.

N. RAMESAN,
Secretary to Government, Finance Department

Hyderabad,
October, 1973.

iii
SECOND EDITION

The previous Edition of this Manual was brought out in October, 1973. The
amendments issued upto 31.12.1979 have been incorporated in this edition. The
Computer code numbers have also been incorporated against minor heads in
Appendix-II and detailed heads in Appendix-III to this edition.

2. Appendices VI to IX and Forms A to M are being brought out separately as
supplement to the Budget Manual.

3. Errors or omissions, if any, may kindly be brought to the notice of the
Finance and Planning (Finance) Department, Government of Andhra Pradesh,
Hyderabad.

R.K.R. GONELA, .
Secretary to Government, Finance Department

Dated: May, 1981,
Government of Andhra Pradesh, Hyderabad.

THIRD EDITION

The previous Edition of this Manual was brought out in May, 1981. The
amendments issued upto 01.04.1987 have been incorporated in this edition. The
Computer code numbers have also been incorporated against minor heads in
Appendix-II and detailed heads in Appendix-III to this edition.

Errors or omissions, if any, may kindly be brought to the notice of the
Finance Department, Government of Andhra Pradesh, Hyderabad.

S. NARAYANAN,
Secretary to Government,
Finance Department

Dated: June, 1989,
Government of Andhra Pradesh, Hyderabad.

iv
CONTENTS

Pages
PART - I THE STRUCTURE OF BUDGET AND ACCOUNTS

CHAPTER - 1. General Introduction to the Budget or the
Annual Financial Statement 1 - 2

2. Definitions 3 - 13

3. Broad Objectives of the New Budget & Accounting
Classification Adopted from 1st April, 1974 14 - 34

4. Classification of Receipts Classification Adopted
from 1st April, 1974 35 - 38

5. Classification of Expenditure on Revenue Account
Adopted from 1st April, 1974 39 - 47

6. Classification of Capital Expenditure Adopted
from 1st April, 1974 48 - 52

7. Public Works Classification Adopted from 1.4.1974 53 - 55

8. Public Debt Classification Adopted from 1.4.1974 56

9. Loans and Advances Classification Adopted
from 1st April, 1974 57 - 58

10. Public Account Classification Adopted from 1.4.1974 59 - 67

11. Inter-Departmental/Governmental Adjustments 68 - 70

12. Exhibition of Recoveries of Expenditure in Accounts 71 - 72

PART - II INSTRUCTIONS FOR THE GUIDANCE OF ESTIMATING
OFFICERS IN THE PREPARATION AND EXAMINATION OF
BUDGET ESTIMATES

CHAPTER - 13. Instructions for the Preparation of Departmental
Estimates Receipts & Expenditure 73 - 81

14. Preparation and Scrutiny of Part-II Estimates 82 - 86

15. Preparation of the Budget Action in the Legislature -
Appropriation Act 87 - 93
v
Pages

16. Control of Expenditure 94 - 101

17. Savings in Appropriation - Expenditure non provided
for in the Budget Estimates criteria for treating
expenditure as new service/new instrument of service-
Reappropriations - Supplementary Appropriations -
Savings in or Excesses over the Financial
Appropriations 102 - 128

18. Committee on Public Accounts 129 - 130

19. Financial Powers as per Constitution of India 131 - 138

PART - III APPENDICES

APPENDIX I. List of New Object Heads 139 - 144

II. Detailed procedure/or distribution of establishment/
tools and plant, etc., in respect of common public
works establishments 145 - 146

III. The Andhra Pradesh Contingency Fund Act, 1957 147 - 151

IV. Accounting Procedure for expenditure met out of
advances from the Contingency Fund 152

V. List of Non-Lapsable & Lapsable deposits as per
G.O.Ms.No.43, Finance (W&M) Dept., Dt. 22.4.2000 153 - 162

VI. A.P. Fiscal Responsibility and Budget Management
(APFRBM) Act., 2005 163 - 170

VII. A.P. Fiscal Responsibility and Budget Management
(APFRBM) Rules, 2006 as per G.O.Ms.No.183,
Finance (BG-I) Dept., Dt. 30.6.2006 171 - 192

VIII. List of Demands and HODs 193 - 200

IX. Approval of Non-Plan and Plan Schemes 201 - 210

X. Sectoral and Major Head Classification of Govt.
Transactions Prescribed by the Comptroller
General of Accounts 211 - 236

XI. List of Sectors (including Sub-sectors), Major Heads
(Including Sub-Major) and Minor Heads as adopted
by the State Government 237 - 602

XII. Proforma for Number Statement 603 - 606
vi
PART - I

THE STRUCTURE OF BUDGET AND ACCOUNTS
2