A GUIDE TO THE BUDGET

EATALA RAJENDER
Minister for Finance

Issued by

FINANCE DEPARTMENT
GOVERNMENT OF TELANGANA

A GUIDE TO THE BUDGET

EATALA RAJENDER
Minister for Finance

Issued by

FINANCE DEPARTMENT
GOVERNMENT OF TELANGANA

A GUIDE TO THE BUDGET

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 of
the 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.

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.

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 the
issue 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
3

(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, Receipts
from 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 275
of the Constitution etc.
13.
The statement styled as "A Statement of Revenue, Grants-inaid 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 receipts
under each major head.
Revenue Expenditure
14.
The expenditure under Revenue Account is incurred for
administering the different departments of the Government, for
payment of interest charges on the borrowings of the Government, for
4

relief measures on natural calamities and on the maintenance and

repairs of various capital assets like buildings, roads, irrigation
sources etc. Broadly speaking expenditure which does not result in
creation 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. 117 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 which
yield 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
5

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 to
Local 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 Dairy
Corporation, 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.

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 headwise 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 proposed
size 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.

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 Provident
Fund 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
8

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 been
formulated 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.

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 by
sanctioning 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
10

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 substantial
expenditure. 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.

11

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 sanctioned
grants, 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
12

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
13

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
14

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.

15

(5)

(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)

Volume- III - Details of Demands for Grants for NonPlan and Plan. There are 17 parts in Volume-III, each
part contains demands for grants or departments coming
under each department of Secretariat.
Volume-IV - Public Account
Volume-V - Annexures to Budget.
Volume-VI - Budget-in-brief.
Volume-VII/1 - Annual Plan
Volume-VII/2 -Tribal Sub Plan (TSP)
Volume-VII/3 - Scheduled Castes Sub - Plan
Volume-VIII/1&2 - Appendices to the Budget
Estimates.
Volume-IX - Analysis of the Demands for Grants by
Ministers.
Volume-X - Government Commercial Undertakings
Supplement to the Detailed Budget Estimates.
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.

16

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 the
manufacturing, 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
17

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 AuditorGeneral.
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.

18

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 details
for 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 Scheme
wise 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 "0210
Medical 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 only
estimates 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:
Sub-Major Head:
Minor Head:

4700 - Capital Outlay on Major Irrigation

01 - Major Irrigation
101 Sri Ram Sagar project
G.H.11. Normal State Plan

Example III
52.
If information regarding the provision made towards buildings
for 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.

EATALA RAJENDER
Minister for Finance

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