Sub: Budget Estimates 2003-2004- Preparation of- Instructions - Issued.
The attention of all the Heads of Departments and other Estimating Officers is invited to paragraph 31 of the Kerala Budget Manual and they are requested to take immediate steps for the formulation of the Budget Estimates for 2003-2004. The dates fixed for the receipt of the estimates in this Department are given below:
Non-Plan Expenditure : Not later than 31st October, 2002
Plan Expenditure : Not later than 30th November, 2002
Revenue and other Receipts : Not later than 30th November, 2002
The estimates shall be sent to the Finance Department direct with a copy to the Administrative Department. The Administrative Department should forward their comments on the estimates to the Finance Department within ten days of the date of receipt of the estimates. Detailed notes on the points to be kept in mind while formulating the Budget Estimates for 2003-2004are given below:
Revised Estimates for 2002-2003
2. The Revised Estimates for 2002-2003 should be prepared as realistically as possible with reference to the following facts, instead of repeating the budget figures in a routine way.
the progress of expenditure during the first five months of the year;
(ii) the expenditure likely to be incurred during the remaining months of the year;
(iii) the additional funds already obtained or proposed to be obtained by Supplementary Grants;
(iv) the re-appropriation or resumption of funds already made or proposed to be made;
(v) the new schemes that have been sanctioned during the course of the year;
(vi) the new heads of account opened during the year either for booking expenditure on new schemes or for accommodating any adjustments and the new heads of accounts opened while distributing existing lump sum provisions; and
(vii) any other relevant factors that will materially affect or have a bearing on the expenditure during the year.
Each of these factors should be spelt out in sufficient details, enclosing copies of the relevant orders. If new heads of account had been opened during the year, copies of the relevant orders should be sent so as to incorporate all of them in the budget documents without any omission. In short, the revised estimates should represent the anticipated expenditure of the year, with reference to all relevant post budget developments, and should closely correspond to the actual expenditure. As the closing balance of the year is worked out with reference to the revised estimates, any large variation between revised estimates and actual expenditure would upset the Ways and Means forecasts. On account of financial constraints, the Revised Estimates in the aggregate should not normally exceed the Budget Estimates. In the case of lumpsum provisions included in the budget for the current year, the revised estimates for the year and the budget estimates for the coming year should be furnished detailed head-wise.
Note:-The actual expenditure for a representative month say May 2002 booked under each detailed head of account should also be furnished along with the revised estimate proposed.
Budget Estimates for 2003-2004
3. The Estimates in respect of revenue and other dues to the Government should be prepared taking into account the need to accelerate collections. The extent of arrears at the end of 2001-2002 should be indicated year-wise and brief account given on the steps taken or proposed to be taken to collect the arrears. The reasons for accumulation of arrears should also be furnished. Similar details should be furnished while forwarding the estimates in regard to recovery of loans and advances. Separate statements on arrears of tax and non-tax revenue and arrears of loans and advances in the proforma shown in Annexure I and II should also be furnished along with the Estimates.
4. The budget estimates of expenditure should be prepared as accurately as possible so that the amount proposed for each function, programme or scheme do not turn out to be either excessive or inadequate later on. The attempt should be to assess the precise requirements with reference to all available data. The revised estimates proposed for the year should form the basis for preparing budget estimates for the coming year, making due allowance for any special factors. Thus, if the current year estimates provide for any non-recurring items of expenditure, a corresponding reduction should be made in the budget estimates for the coming year. The variation between the revised estimates for 2002-2003 and the budget estimates for 2003-2004 should be clearly and precisely explained. Otherwise any proposed increase will not be considered.
5. Certain schemes may involve expenditure under more than one head of account. While proposing provision for such schemes under any one of the heads of account, the full details of the provisions proposed under the other heads should also be indicated in the remarks column, so that a complete picture of the financial requirements would be available. The explanation of the scheme should also be comprehensive covering all the components of the proposed expenditure.
Need for Economy
6. The serious financial constraints being faced by the State Government make it imperative for the Government to prepare the Budget 2003-2004 with extreme austerity. As a thumb rule, the non-plan Revenue Budget excluding salaries of each unit should be retained at the current year's level. Retention of the Revenue Budget of the current years Revised Estimate level will, therefore require introduction of economy measures in all other spheres of activity. It might necessitate the dropping of uneconomical schemes and perhaps deferment of certain measures including maintenance expenditure, which can be postponed. The success of the exercise depends to a large extent on the personal involvement of the Head of Department who should go through each and every unit of appropriation and decide upon where the cut should be made. Budget preparation should not become a mechanical incremental exercise. In the event of a scheme or activity being deferred or dropped, there will be surplus staff who, however, cannot be retrenched. The officer concerned should prepare a complete list of such staff declared as surplus and keep such a list ready for future use, so that they can be absorbed in arising vacancies.
7. The Heads of Departments and Controlling Officers should critically review the programmes/schemes/works and justify their continuance and send such a review report along with their Budget Estimates without fail. The Heads of Departments/Estimating Officers should note that it is the primary responsibility of the Officers concerned to rationalise the process of implementation of programmes/schemes/works and to bring economy wherever possible. In this exercise, some schemes may have to be wound up and some others merged with or transferred to the activities of other Departments. This should none the less be an opportunity to critically review the activities of each department.
Recovery of Expenditure
8. For certain schemes, the expenditure is recoverable from other Governments or bodies. Full details of the percentage of recovery, the arrears relating to previous years pending recovery etc., should be included in the proposals. Such recoveries will be treated as receipts in the case of those coming under Revenue Account and reduction in expenditure in the case of those under Capital Account.
9. For all new schemes for which provision is proposed in the Budget Estimates for the first time, necessary details on which the requirement of funds is based, and the number and date of the order sanctioning the scheme should be furnished along with the copy of the relevant Government Orders. As far as possible lump provision should not be proposed. "Part II schemes" under Non Plan will not be entertained on any account along with budget proposals. In this connection attention is also invited to para 24 of Kerala Budget Manual by which provision should be proposed for sanctioned schemes only and not for new schemes awaiting Government sanction.
10. The provision will include pay and allowances in all forms except travel expenses. The forecast of estimates on salary requirements should be accurate. Re-appropriation from salary head will not be allowed in the normal course. The provision should be worked out with reference to the actual pay drawn by the various incumbents. To verify the calculations a statement showing the sanctioned strength, the actual strength in position, their scales of pay and actual pay should be furnished. While preparing estimates on “Salaries”, the stipulations in G.O(P) No.56/2002/Fin dated 16.01.2002 (given as Annexure XII) in regard to salaries of new entrants in service should also be taken into consideration. The variations between the strength of staff included in the budget for 2002-2003 and that proposed in the budget for 2003-2004 should be explained forwarding copies of the relevant sanctions. The estimates under “Salaries” should be furnished showing separately the provision required under (1) Pay including Special Pay (2) D.A. (3) H.R.A. (4) Medical reimbursement and (5) Other Allowances. Full details of estimates on salaries as required in the forms given as Annexures III, IV and V should be furnished without fail. Brief explanation for large variations with reference to the actual expenditure of the past three years and revised estimates of the current year should be given. Estimates of Conveyance Allowance to Physically Handicapped Employees, other allowances like CCA, HTA, Risk Allowance, Compensatory Allowance, Special Allowance, etc. and Adhoc Bonus/ Special Festival Allowance payable to employees have to be included under 'Other Allowances'. Details of each such allowance should be indicated in separate columns in the statement..
11. Provisions should not normally be proposed for posts, which are kept in abeyance. Provision for existing temporary establishments, whose continuance in the ensuing year is anticipated should however, be made. In the case of posts declared as surplus, provisions need be proposed only upto such time when the incumbents in such posts get absorbed in arising vacancies or get deployed elsewhere.
12. A statement of officers drawing House Rent Allowance at different rates (Annexure VI) and another statement of Part-time and Full-time Contingent Employees in Annexure VII should also be furnished.
13. Separate statements /details should be furnished in respect of those employees, who are given the scales of pay/salaries equivalent to the UGC,ICAR,CSIR,AICTE,ICMR or any other similar schemes. The copies of the Government Orders by which such employees have come over to such scales should also be furnished.
14. Provision for "Works" is mostly included under Plan. In respect of "Continuing Works" the estimates may be forwarded before plan allocations are known so that the details can be verified sufficiently early. The estimates should also include the details of sanction by competent authority. The estimated cost of the work and the progressive expenditure up to the end of 2001-2002 should be furnished in the remark column. The Volume I of Appendix II contains the details of works for which administrative sanction is accorded and Volume II contains 'New Works' having no administrative sanction. The works for which Administrative Sanction obtained during 2002-03 shall be included under Volume-I of Appendix II (Works Appendix) of 2003-04. The Chief Engineers/Administrative Departments should not forward proposals for any New Works along with the budget proposals, unless Government specially clears them. No provision need be proposed for those works, which have been transferred to the local body institutions.
15. There have been instances where proposals for change of the description and name of works are made later in the year. This evidently shows lack of proper scrutiny by the estimating officers while submitting proposals. The works should be properly and correctly worded while sending the budget proposals. The details of works included in ‘Works Appendix’ need be forwarded only in Malayalam.
16. The works proposed by the estimating officers under plan should be linked to the plan scheme concerned in the Plan Budget. This linking may be done duly furnishing the name of Work/Works coming under a particular plan scheme indicating also the code number of the scheme. Heads of Departments may note that the works, which are not linked to the connected Plan Scheme, will not be included in the "Works Appendix".
Travel Expenses, Office Expenses, Rent, Rates and Taxes etc.
The estimates proposed against each detailed head should be accompanied
by supporting statements. The estimates under Travel Expenses should be
furnished showing separately the provisions required under, (1) Tour T.A,
(2) Transfer TA, and (3) PCA/PTA. While preparing estimates under Travel
Expenses, the following guidelines prescribed in the Ninth Report of the
Kerala Administrative Reforms Committee shall be adhered to:
Head of Department should give a statement indicating the arrears of Travel Allowance in his Department and the requirement for the coming year. Both these figures should be split into following categories.
(a) For tours related to defending government cases in various court of law.
(b) For tours which, if not undertaken will directly result in financial loss to Government.
(c) For tours of inspection as per standing orders laying down such inspections.
(d) For journeys for training purposes.
(e) For other tours.
Administrative Departments concerned are required to make realistic assessment of estimates under Travel Expenses based on the information as detailed above.
The provision proposed under 'Office Expenses' should indicate the requirement of funds under (1) Water Charges (2) Electricity charges, (3) Telephone Charges and (4) Other items excluding petrol charges and repair/maintenance charges of vehicles. Detailed statements indicating the details of telephone connections such as Telephone Number, office to which the telephone is attached, whether an office phone or a residential phone, whether with or without STD facility, the bimonthly rent payable etc., should be furnished. Provision for non-recurring items (furniture, equipment etc.) of expenditure should not be repeated merely on the basis of average expenditure for the previous years; but should be restricted to the actual requirement. Statements showing the requirements and the approximate cost should be furnished. A break-up of recurring and non-recurring expenditure should also be given in respect of each item. The specific economy restrictions shall be kept in view while working out the requirements. Details of buildings taken on rent and the rate of rent fixed by Government for each building should be furnished separately.
18. The estimates for meeting the expenditure on petrol, oil etc. should be proposed under the detailed head ’P.O.L‘. The provision proposed should indicate actual requirements along with statements showing Registration Number, office to which the vehicle is attached, Make and Year, monthly ceiling of consumption of fuel etc. and statement of actual consumption during the financial year 2001-2002 and that for the first 5 months of 2002-2003. The estimates for petrol charges etc. should be prepared after taking into account the restrictions imposed by Government through various economy orders.
19. The provision required for the purchase of new vehicles, repairs and maintenance of existing vehicles etc., should be classified under the detailed head ’Motor Vehicles’ itself. The estimates proposed under ’Motor Vehicles‘ should indicate separately the amount required under (i) purchase of new vehicles and (ii) repairs and maintenance. Copies of orders sanctioning purchase of vehicles should invariably be furnished in support of proposals relating to estimates under 'purchase of vehicles’.
20. The expenditure towards Water Charges and Electricity charges for functional purposes (Medical Colleges and Hospitals, Colleges, Technical Institutions etc.) should be debited under the object heads viz., (1) Water Charges (2) Electricity Charges and (3) Other items below the detailed head ‘34 Other Charges’. The Chief Controlling officers/Estimating officers are instructed to forward estimates accordingly.
Interest on Loans
21. The payment of interest charges on loans availed by various Government Departments is an inevitable item of expenditure.The Heads of Departments/Administrative Departments should ensure that sufficient provision for payment of interest on loans availed by them from Financial Institutions concerned are duly proposed while sending budget proposals.
22. (i) Provision should be proposed for meeting charged expenditure that may be necessary to satisfy court decrees. - A special review of all claims that have gone to Courts or are likely to be taken to the Courts should be conducted for assessing the likely requirements. It is also desirable to provide for unforeseen expenditure arising from Court decrees.
(ii) Decretal Claims – Land acquisition cases. - For satisfaction of Court decrees relating to land acquisition cases which have no scope for appeal, the charged appropriation required should be provided exclusively under the Major head of account ‘2075 – Miscellaneous General Services’. This appropriation will be provided under two sub heads viz., ‘54 Deposit of Decretal amount to Courts for satisfaction of Court decrees connected with land acquisition cases in respect of Government Departments – Lump provision’ and ‘53-Deposit of Decretal amount to Courts for satisfaction of Court Decrees connected with the land acquisition cases in respect of Local Bodies/Public Sector Undertakings/Other Institutions – Lump Provision’ under the Major head ‘2075- Miscellaneous General Services’ for meeting the Expenditure. Revenue Department in the Secretariat is the Chief Controlling Department in respect of the above Sub-heads of account. The Heads of Departments and Controlling Officers should assess the requirement and propose the estimates for inclusion in the Revised Budget 2002-2003 and Budget Estimates 2003-2004 to the Revenue Department in the Secretariat. The Revenue Department will consolidate the requirement received from various Departments/Chief Controlling Officers and send a consolidated proposal to the Finance (Budget Wing) Department for inclusion in the Budget.
23. The Estimating Officers shall ensure that adequate provision is proposed for carrying out inter-departmental adjustments and for effecting adjustments between different heads of account. Proposals for Supplementary Demands for Grants for such purposes will not normally be entertained.
24. The outlay fixed for each scheme in the Annual Plan programme for 2003-2004 (second years Programme of Tenth Five Year Plan 2002-2007) may be taken as the basis for proposing provision in the Budget for plan schemes. For new schemes or expansion of existing schemes, separate statements containing sufficient details in support of the provision should be furnished. While making provision for a plan scheme under a particular head of development, it should be ensured that the funds to be provided for execution of works, payment of loans/share participation etc., are well accommodated within the Annual Plan outlay fixed for the schemes.
25. A consolidated statement showing the estimates proposed for Plan Schemes should be furnished in the form given in Annexure VIII. The physical and financial targets in respect of each scheme, stage of implementation and other relevant details should also be furnished. A copy of Annexure VIII and the statement regarding the physical and financial targets should be sent to the Planning and Economic Affairs Department as well.
26. While proposing provision for Centrally Sponsored Schemes, the instructions issued from Planning and Economic Affairs Department should be taken care of. Information regarding allocation approved by Government of India in 2001-2002 and 2002-2003 for each scheme may be furnished. If it is a new scheme pending approval of the Government of India, details of the scheme forwarded to the Government of India may be furnished.
Foreign Exchange Budget
27. In order to initiate annual exercise on formulation of the Foreign Exchange Budget for the year 2003-2004 by Government of India, the Departments concerned may furnish to this Department the estimates of foreign Exchange Commitments and outgoes (Payments) in respect of such Department or Departmental Undertakings/Public Sector Undertakings under their control for the current year (Revised Estimate) and for the next year (Budget Estimate) with specific supporting details.
28. With a view to analysing the extent of Central Assistance due to the State, the concerned Officers should give a list separately of all Externally Aided Projects, 100% Centrally Sponsored Schemes and 50% Centrally Sponsored Schemes in the proforma given in Annexure IX to this Circular.
29. A list showing the total amount of subsidies/grants released during 2001-2002 and proposed to be released in 2002-2003 and 2003-2004 should also be given.
30. The estimated cost of land acquisition for the year 2003-2004 may be given indicating separately amounts to be paid on account of court decrees and otherwise.
31. New requirements not normally catered to like special maintenance, replacement of vehicles etc., should be given in a separate note for consideration by Finance Department.
Scrutiny by Administrative Department
32. The Administrative Department may scrutinise the estimates in the light of the sanctions given from time to time particularly in regard to the necessity for the continuance of temporary staff during the year 2003-2004 and will suggest modifications, if any, found necessary before the end of October 2002, in the case of Non-Plan estimates. The Estimates received from the Departments may, however, be retained by the Administrative Department together with the office copies of their notes for future reference. If, in the light of the subsequent orders or other developments, any alterations in the Budget Estimates are found necessary such alterations should be intimated to the Finance Department not later than December 1, 2002.
33. Certain schemes already under consideration in the Secretariat are sometimes left out in the Budget proposals and are sent to the Finance Department after the Budget Estimates are finalised. As Finance Department cannot consider belated proposals for inclusion in the Budget, the Departments of the Secretariat are requested to ensure that all pending proposals are considered along with the budget proposals.
34. A Statement of guarantee given by the Government of Kerala is given in Appendix IV to the Explanatory Memorandum. Similarly the particulars of Government properties leased out at subsidised or concessional rates of rent and for which standard rent has not been fixed are given in Appendix V. Heads of Departments and concerned Administrative Departments of the Secretariat are requested to examine these statements and indicate the changes necessary to make them up-to-date.
35. The following information has to be brought to the notice of the Legislature according to rules:
(a) Cases already approved by the Legislature but where the expenditure is subsequently expected to exceed appreciably the amount intimated to the Legislature. Full details with reasons for the variations may be furnished in the form given, in Annexure X to this Circular.
(b) Full details of Government properties or assets proposed to be transferred free of cost or sold at concessional rates to outside bodies/institutions/parties. In the case of land, particulars relating to the extent, survey number, location, name of transferee and purpose for which transfer is made etc., may be furnished. The details given in Appendix VI of the Explanatory Memorandum may, therefore be verified and up-to-date details furnished.
(c) Statement showing the details of dues from Public Undertakings proposed to be waived should be sent as laid down in Circular no.54/79/Fin. Dated 7.6.1979 given as Annexure XI to this Circular.
Need for personal attention by the Controlling Authorities
36. As the preparation of the Budget involves the Co-operation of all Departments of Government at different levels, it is necessary that the time schedule for the various stages of the work be strictly adhered to. Government also wish to emphasise that the preparation of the estimates should not be done in a routine manner in the accounts branches; but should receive the personal attention of all estimating and controlling authorities so that the estimates would, apart from being as close to realities as possible indicate the policies and directions of Government.
37. All the Controlling/Estimating Officers are requested to ensure that the time schedule prescribed in para 1 of this Circular is strictly adhered to.
Principal Secretary (Finance)
The Accountant General (Audit), Kerala, Thiruvananthapuram.
The Accountant General (A&E), Kerala, Thiruvananthapuram. All Heads of Departments and Offices. All Departments (All Sections) of the Secretariat.
The Secretary, Kerala Public Service Commission (with C.L.)
The Registrar of High Court, Ernakulam (with C.L.)
The Registrar, Kerala Lokayukta, Thiruvananthapuram (with C.L.)
The Secretary, Ombudsman for Local Self Government Institutions, Thiruvananthapuram.
The Registrar, University of Kerala/Cochin/Calicut/Kannur/ Sanskrit University.
The Registrar, Mahatma Gandhi University, Kottayam.
The Registrar, Kerala Agricultural University, Mannuthy, Thrissur. The Advocate General, Ernakulam (with C.L.)
The Secretary, Kerala State Road Transport Corporation (with C.L.) The Secretary, Kerala State Electricity Board (with C.L.]
The Secretary to Governor.
The Additional Secretary to the Chief Secretary.