CHAPTER V PREPARATION OF THE BUDGET—III

January 20, 2025

SCRUTINY OF DEPARTMENTAL ESTIMATES BY THE ADMINISTRATIVE DEPARTMENT

47. On receipt of Part I of the departmental estimates from the estimating officers, the Administrative Department of the Secretariat will scrutinize the revised estimates for the current year and the budget estimates for the next year, and purpose such alterations as it may consider necessary in view of circumstances which it may be aware of or sanctions accorded after the estimates were framed by the estimating officers or which they may have failed to take into account. The Administrative Department should forwarded to the Finance Department its comments on the estimateswithin ten days of receipt of the estimates.The estimates themselves need not, however, be sent to the Finance Department. These may be retained by the Administrative Department, along with office copies of notes, for future reference.

എസ്റ്റിമേറ്റിംഗ് ഓഫീസർമാരിൽ നിന്നുള്ള ഡിപ്പാർട്ട്മെന്റൽ എസ്റ്റിമേറ്റിന്റെ ഒന്നാം ഭാഗം ലഭിച്ചുകഴിഞ്ഞാൽ, സെക്രട്ടേറിയറ്റിന്റെ അഡ്മിനിസ്ട്രേറ്റീവ് ഡിപ്പാർട്ട്മെന്റ് നടപ്പുവർഷത്തെ പുതുക്കിയ എസ്റ്റിമേറ്റുകളും അടുത്ത വർഷത്തെ ബജറ്റ് എസ്റ്റിമേറ്റുകളും പരിശോധിക്കും, കൂടാതെ അത്തരം മാറ്റങ്ങൾ ആവശ്യമായി വരാം എസ്റ്റിമേറ്റ് ചെയ്ത ഉദ്യോഗസ്ഥർ എസ്റ്റിമേറ്റ് തയ്യാറാക്കിയതിനുശേഷം അല്ലെങ്കിൽ അവ കണക്കിലെടുക്കുന്നതിൽ പരാജയപ്പെട്ടേക്കാവുന്ന സാഹചര്യങ്ങളെക്കുറിച്ച് അറിയാവുന്നതോ ഉപരോധിച്ചതോ ആയ സാഹചര്യങ്ങൾ. എസ്റ്റിമേറ്റുകൾ സ്വീകരിച്ച് പത്ത് ദിവസത്തിനകം അഡ്മിനിസ്ട്രേറ്റീവ് വകുപ്പ് എസ്റ്റിമേറ്റിനെക്കുറിച്ചുള്ള അഭിപ്രായങ്ങൾ ധനകാര്യ വകുപ്പിന് കൈമാറണം. എസ്റ്റിമേറ്റുകൾ സ്വയം ധനകാര്യ വകുപ്പിലേക്ക് അയയ്‌ക്കേണ്ടതില്ല. ഭാവിയിലെ റഫറൻസിനായി ഇവ കുറിപ്പുകളുടെ ഓഫീസ് പകർപ്പുകൾക്കൊപ്പം അഡ്മിനിസ്ട്രേറ്റീവ് ഡിപ്പാർട്ട്മെൻറ് നിലനിർത്താം.

SCRUTINY OF DEPARTMENTAL ESTIMATES BY THE FINANCE DEPARTMENT

48. (1) The Finance Department will get from the Accountant General the actuals of the previous financial year and the first five months of the current year. It will examine the estimates in the light of these figures and also the remarks of the estimating officers and the Administrative Department, with due regard to all relevant factors, and, make such modifications in the figures as are, in its opinion, justified.

(2) If, after a preliminary scrutiny of the non-Plan estimates, it is felt that a discussion with the Heads of Departments and the Administrative Departments of the Secretariat would be necessary to finalise the estimates, the Finance Department will arrange such a discussion, so that the financial requirements of the departments could be viewed against a broader perspective. These discussions will also provide an opportunity to consider absolutely essential items if new expenditure.

(3) The orders passed by the Finance Department on the estimates will be communicated to the Administrative Department, which may, in turn, communicate them to the Head of the Department concerned.

SUBSEQUENT MODIFICATION OF ESTIMATES

49. (1) After orders have been passed by the Finance Department on the Part I estimates may be proposed subsequently by the Heads of Departments and the Administrative Departments if the Secretariat, based on any further information that may become available, having a bearing on the estimates already proposed, sanctions accorded later by Government, or a statement of expenditure laid before the Legislature under Article 205(1) of the Constitution. All such proposals should, however, reach the Finance Department before the end of December.

(2) The Board of Revenue will send to Government in the Finance Department and the Revenue Department, towards the end of January, a report on the modifications to be made in the estimates of receipts relating to State Excise, based on the results of auction of the various items. A similar report will be submitted by the Board early in February, on changes necessary in the estimates of receipts in respect of Agricultural Income Tax and Sales Tax, based on the amounts actually collected upto the end of January.

(3) The Finance Department will review the Part I estimates in respect of all heads of account, with reference to the actuals for the first eight months of the current year, furnished major head-wise by the Accountant General by the 31st of December, and the corresponding actuals of the preceding year. It will again review the estimates in respect of the principal heads of revenue, in the light of the first 9 month’s actuals. If possible, it will incorporate in the estimates, at this stage, any proposed change found necessary.

FIXATION OF PART I ESTIMATES AND SELECTION OF PART II SCHEMES

About the end of January, Government will pass final orders on the Part I estimates, and will decide, keeping in view the availability of funds, which of the Part II schemes should be provided for in the budget estimates for the ensuing year.

Note:—Although provision for new schemes may be included in the Demands for Grants, no officers may take any action in respect of any such scheme which will have the effect of committing Government to incur expenditure, until the Appropriation Act is published in the Government Gazette and the scheme is formally sanctioned by Government. The Administrative Departments should, at the same time ensure that formal sanction for the implementation of schemes included in the budget is issued as expeditiously as possible, and that there is no hold up on this account.

PREPARATION OF THE BUDGET DOCUMENTS

(1)The Finance Department will then correct the estimates with reference to the Government’s final orders, and incorporate therein the provision to be made for Part II schemes. The budget documents will then be prepared. These include—

സർക്കാരിന്റെ അന്തിമ ഉത്തരവുകളുമായി ബന്ധപ്പെട്ട് ധനകാര്യ വകുപ്പ് എസ്റ്റിമേറ്റുകൾ തിരുത്തുകയും അതിൽ ഭാഗം II സ്കീമുകൾക്കായി ഉൾപ്പെടുത്തുകയും ചെയ്യും. തുടർന്ന് ബജറ്റ് രേഖകൾ തയ്യാറാക്കും. ഇതിൽ ഉൾപ്പെടുന്നവ-

(i) Annual Financial Statement (Budget).
(ii) Detailed Budget Estimates of Revenue.
(iii) Demands for Grants and Detailed Budget Estimates.
(iv) Explanatory Memorandum on the Budget.
(v) Appendix I (Details of Staff).
(vi) Appendix II (Details of Works).
(vii) Detailed Estimates of Receipts and Disbursements under Debt Heads.
(viii) Five Year Plan—Programme for the year.
(ix) Performance Budgets.
(x) Evaluation Reports.

(2) The ‘Explanatory Memorandum on the Budget’ will indicate the nature of the various items of receipt and expenditure included under each head, and explain substantial variations between the budget estimates and the revised estimates of the current year and the budget estimates of the current and coming years.

‘ബജറ്റിനെക്കുറിച്ചുള്ള വിശദീകരണ മെമ്മോറാണ്ടം’ ഓരോ തലക്കെട്ടിനു കീഴിലുള്ള വിവിധ രസീതുകളുടെയും ചെലവുകളുടെയും സ്വഭാവം സൂചിപ്പിക്കും, കൂടാതെ ബജറ്റ് എസ്റ്റിമേറ്റുകളും നടപ്പുവർഷത്തെ പുതുക്കിയ എസ്റ്റിമേറ്റുകളും നിലവിലുള്ളതും വരാനിരിക്കുന്നതുമായ ബജറ്റ് എസ്റ്റിമേറ്റുകളും തമ്മിലുള്ള കാര്യമായ വ്യത്യാസങ്ങൾ വിശദീകരിക്കും.

The following statements are appended to the memorandum:—

(i) Abstract showing Revenue Receipts in terms of percentages.
(ii) Abstract showing Revenue Expenditure in terms of percentages.
(iii) Statement showing the receipts and disbursements of the State Government for the preceding two years (Actuals) the current year (Revised Estimates), and the ensuing year (Budget Estimates).
(iv) Statement of outstanding guarantees given by the Government.
(v) Particulars of Government properties leased out at subsidised or concessional rates of rent and for which standard rent has not been fixed.
(vi) Particulars of properties or assets proposed to be transferred free of cost or sold at concessional rates to outside bodies/institutions/parties.
(vii) List of cases/schemes where the expenditure is expected to exceed appreciably the amounts originally intimated to the Legislature.
(viii) Statement showing the assets and liabilities of Government.
(ix) Comparative statement of gross expenditure under Plan and Non-Plan by Major Heads.
(x) Abstract showing comparison of the rise or fall in expenditure on establishment on establishment during a period of three years and the percentage of establishment charges to total revenue.

(xi) Abstract showing comparison of the rise or fall in expenditure on other charges and expenditure other than salaries, travel expenses, and other charges during a period of three years.

Ordinarily, there will be a separate Demand for Grant in respect of each major service, e.g., Medical, Public Works, Housing, Irrigation, Transport, etc. But, in some cases, more than one Demand for Grant may be presented for one service, or, conversely, more than one service may be included in a single Demand for Grant, according to convenience.

As a rule, the Demand for Grant for each service will incorporate the budget provisions on revenue account as well as on capital account (including loans and advances) relating to that service.

The Demand for Grant will be for the gross expenditure, without taking into account the recoveries to be accounted as reduction of expenditure. A demand for grant can be made only on the recommendation of the Governor.

വീണ്ടെടുക്കൽ ചെലവുകൾ കുറയ്ക്കുന്നതായി കണക്കാക്കാതെ മൊത്തം ചെലവുകൾക്കാണ് ഗ്രാന്റിനുള്ള ആവശ്യം. ഗവർണറുടെ ശുപാർശയിൽ മാത്രമേ ഗ്രാന്റ് ആവശ്യപ്പെടൂ.

ESTIMATES IN RESPECT OF UNION (AGENCY) SUBJECTS

52. (1) An agency subject is a subject administrative by the State Government on behalf of the Union Government.

(2) The State Government administers at present the following subjects as the agent of the Union Government:—

കേന്ദ്രസർക്കാരിന്റെ ഏജന്റായി സംസ്ഥാന സർക്കാർ നിലവിൽ ഇനിപ്പറയുന്ന വിഷയങ്ങൾ നിയന്ത്രിക്കുന്നു: –

(i) Registration and surveillance of foreigners. വിദേശികളുടെ രജിസ്ട്രേഷനും നിരീക്ഷണവും

(ii) Deportation of foreigners. വിദേശികളെ നാടുകടത്തൽ.

(iii) Indo-Pakistan Passport/Indo-Bangladesh Passport Work.

(iv) Payment of Political Pensions from Central Revenues.

(v) Administration of Central Acts, such as Explosives Act, Petroleum Act, Indian Arms Act, Rice milling Industry (Regulation) Act, etc.

(3) The annual estimates of expenditure in respect of subjects (i) to (iii) are forwarded by the Home Department of the Secretariat to the Union Ministers concerned, in such form and on such dates as may be prescribed by the Union Government from year to year.

(4) As regards item (iv), the payment of Political Pensions is arranged by debit to Central funds, and the annual contributions made by the Government of India to the State Government for the discharge of this agency function is not based on any estimate of expenditure forwarded by the State Government to the Union Government. At the time of reorganisation of States in November 1956, administration of 95 Malikhana allowances was transferred from the then Government of Madras to the Government of Kerala, on the condition that the Government of India would make an annual payment of Rs. 1,937.15 to the State Government for performing the agency function. This amount was later raised to Rs. 2,000 per annum, with effect from 1961-62.

(5) In the case of item (v), beginning from the financial year 1976-77, the receipts realised in the administration of these Central Acts and Regulations are credited directly as receipts in the State Section of the accounts. No receipt/expenditure on this account will, therefore, appear in the budget and accounts of the Union Government.

(6) Other Particulars, like the heads of account, their respective Estimating Officers, etc., regarding Union subjects administered on agency basis by the State are given in Appendix 8.

PERFORMANCE BUDGETING

53(1) Short history.—In January 1968, the Administrative Reforms Commission set up by the Government of India recommended the introduction of performance budgeting both at the Centre and in the States, in departments, organizations which are in direct charge of development programmes. The Government of India accepted the recommendation, and advised the State Governments accordingly. In Kerala, the first attempt at performance budgeting was made in 1970-71, when the Performance Budget of the Public Works Department (Buildings and Roads Branch) was prepared. Since then, the State Government has been preparing the Performance Budgets of selected departments each year.

ഇന്ത്യൻ സർക്കാർ ശുപാർശ അംഗീകരിച്ചു, അതനുസരിച്ച് സംസ്ഥാന സർക്കാരുകളെ ഉപദേശിച്ചു. കേരളത്തിൽ, പൊതുമരാമത്ത് വകുപ്പിന്റെ (കെട്ടിട, റോഡ് ബ്രാഞ്ച്) പ്രകടന ബജറ്റ് തയ്യാറാക്കിയ 1970-71 ൽ പ്രകടന ബജറ്റിംഗിനുള്ള ആദ്യ ശ്രമം നടന്നു. അതിനുശേഷം, ഓരോ വർഷവും തിരഞ്ഞെടുത്ത വകുപ്പുകളുടെ പ്രകടന ബജറ്റുകൾ സംസ്ഥാന സർക്കാർ തയ്യാറാക്കുന്നു.

(2) Significance of performance budgeting.—The present system of budgeting with its emphasis on the financial aspect of Government operations, is not suited to evaluate the performance of the different departments. The budget specifies the maximum amount that may be spent on each service during year, but does not indicate what exactly is sought to be achieved thereby. It lays more emphasis on the cost aspect, without corresponding emphasis on the results excepted. In other words, the budget does not provide an adequate link between the financial outlay and the physical target.

Performance budgeting is essentially a technique of presenting the operations of Government in both financial and physical terms, thus enabling evaluation of the Performance of each department. The performance Budget defines the work to be done or the service to be rendered, besides estimating the cost at which this proposed to be done. It is not specifies how much is to be spent on a service during a year, but explain, in sufficient detail, what the provision is meant to achieve. In short, the Performance Budget provides a meaningful classification of the activities of Government, that serves to establish a proper relationship between inputs and outputs.

പ്രകടന ബജറ്റിംഗ് അടിസ്ഥാനപരമായി ഗവൺമെന്റിന്റെ പ്രവർത്തനങ്ങൾ സാമ്പത്തികവും ഭൗതികവുമായ രീതിയിൽ അവതരിപ്പിക്കുന്നതിനുള്ള ഒരു സാങ്കേതികതയാണ്, അതിനാൽ ഓരോ വകുപ്പിന്റെയും പ്രകടനം വിലയിരുത്താൻ ഇത് സഹായിക്കുന്നു. ഇത് ചെയ്യാൻ ഉദ്ദേശിക്കുന്ന ചെലവ് കണക്കാക്കുന്നതിനൊപ്പം ചെയ്യേണ്ട ബജറ്റ് അല്ലെങ്കിൽ ചെയ്യേണ്ട സേവനത്തെ പ്രകടന ബജറ്റ് നിർവചിക്കുന്നു. ഒരു വർഷത്തിൽ ഒരു സേവനത്തിനായി എത്രമാത്രം ചെലവഴിക്കണമെന്ന് ഇത് വ്യക്തമാക്കുന്നില്ല, എന്നാൽ എന്താണ് നേടാൻ ഉദ്ദേശിക്കുന്നതെന്ന് മതിയായ വിശദമായി വിവരിക്കുക. ചുരുക്കത്തിൽ, പ്രകടന ബജറ്റ് ഗവൺമെന്റിന്റെ പ്രവർത്തനങ്ങളുടെ അർത്ഥവത്തായ വർഗ്ഗീകരണം നൽകുന്നു, ഇത് ഇൻപുട്ടുകളും ഔട്ട്പുട്ടുകളും തമ്മിൽ ശരിയായ ബന്ധം സ്ഥാപിക്കുന്നതിന് സഹായിക്കുന്നു.

(3) Structure of the Performance Budget.—The Performance Budget has three parts. Part I Introductory in nature, and is meant to convey briefly the aim and objectives of the department/Organisation, its range of work, broad organisational structure, and the assignment of responsibilities. Part II of the budget presents the requirements in financial terms, and is called the Financial Requirements Table. It has three sections.

Section (i)—Programme and Activity Classification, as the name indicates, classifies the work of the department into meaningful categories, such as programmes and activities and specifies the financial requirements there against. Section (ii)—Object-wise Classification—shows the distribution of the same amount among the different objects of expenditure, such as Establishment, Travelling Allowance, Materials and Equipments, Loans, Grants, Works Outlay, etc. Section (iii)—Sources of Financing—gives the different heads of account under which the funds required have been provided in the ordinary budget. The three sections of the table view the same set of operations from three different angles, viz., the activities, the items of expenditure, and the source of funds, and, as such, the totals of the three sections should be the same. It will be seen that most of the information included in Part II is available in the ordinary budget also and all that has been done is to rearrange it in a manner that would suit the purposes of performance budgeting. Part III of the budget is concerned with the “Explanation of Financial Requirements”.

The budgeted funds are needed to finance certain activities, schemes and other forms of action, and this part is meant to explain the programme of action, with as much of physical data as is possible and relevant. The nature of the activity, the work done during the budget year will inter alia, be mentioned here. The idea is to indicate the results expected in a manner susceptible of measurement, so that the actual achievement could later be compared with that anticipated.

(4) Evaluation.—Performance budgeting will have no meaning without proper evaluation of the physical achievements of each department. The objectives of evaluation include assessment of the progress and impact, finding out the areas of success and failure in implementation, analysing the reasons for the success or failure, and deriving lessons for improvement and implementation. Attention is focused mainly on how far the objectives of the schemes have been achieved, and on how far the Department has been able to execute the works within the estimated cost and stipulated time. Based on such evaluation studies, Evaluation Reports on the performance of the selected departments are prepared, and presented to the Legislature.