51. General observations - The revised estimate is an estimate of the probable receipts or expenditure for a financial year, framed in the course of that year, with reference to the transactions already recorded and anticipation for the remainder of the year in the light of the orders already issued or contemplated to be issued or any other relevant facts. It does not authorise any expenditure, nor does it supersede the budget estimate as the basis for regulation of the expenditure. If an excess is anticipated in the revised estimate under any particular head, it is necessary for controlling authority to apply separately in proper time for additional funds required, unless the excess can be met by                   re-appropriation of savings from other heads or has already been sanctioned by the competent authority. On the other hand, if the figure taken for the revised estimate is less, it is the duty of the controlling officer to see that as far as possible the expenditure during the remaining part of the year is so restricted that the total expenditure for the year does not exceed that figure. The savings may be due to one or more of the following causes :

(i)     actual postponement of expenditure ;

(ii)    real savings due to economy measures ;

(iii)   normal savings due to either over-estimation or administrative causes, e.g. casualties, etc. and

(iv)    compulsory savings notified by the Government

It is essential that the revised estimates should be prepared with great care, so that they may approximate as closely as possible to the actuals which will not be available for some months after the close of the financial year. These estimates, besides enabling the Government to arrive at the approximate closing balance of the current year (which will be the opening balance of the next year) are prima facie the best guide to the next year's estimates.

52.    A revised estimate is based on :

(i)   ascertained actuals of the past months of a financial year, and

(ii)   an estimate of the probable figure for the remaining months of that year.

The figure for (i) above being definitely known, it is only that for (ii) which has to be estimated and in doing so the actuals for the same period during previous years, chiefly those of the preceding year, should be the main guide, due allowance being made for any exceptional factors or unusual characteristics which may have affected the actuals of the last preceding year or which may affect those of the current year. If the revised figure differs appreciably from the previous year's figure, the reason or reasons for the variation should be clearly explained. Also, if any special factors have affected the figure for (i) above, this should be mentioned and it should be explained whether or not they are likely to continue throughout the year. The usual adjustments with other Governments and departments, etc. which take place during and after the close of the year should be duly taken into account when framing the revised estimates.

53. Methods for framing the revised estimates - The revised estimates are generally based on the actuals of the first six months of the year. Assuming that at the time of the preparation of the revised estimates the actuals for the first six months of the current year are available, the estimates will generally be framed in one of the following ways :

(i)   by adding the actuals of the first six months of the current year to those of the last six months of the previous year, or

(ii)   by taking a proportionate figure so that the revised estimates will be twice the actuals for the first six months, or

(iii) by assuming that the revised estimates for the current year will bear the same proportion to the actuals of the first six months as the actual in the previous year bore to those of the first six months of that year.

The Heads of Departments and other estimating officers should use their discretion and adopt one or other of the above methods or any other suitable method for each particular case in the light of the actual trend of revenue or expenditure during the previous years, due allowance being made for any abnormal features in those years and for factors which may modify the realisation of original expectations. It would always be of advantage to base the forecast on a careful study of the figures of three years immediately preceding rather than those of a single year.

54. Preliminary statements of excesses and savings - A statement of anticipated excesses and savings in expenditure in Form B.M. 2 (Part I) shall be submitted by each controlling officer to administrative department, so as to reach Government in the Finance Department not later than 30th November every year. Only those items should be shown in the statement in which any excess or saving is anticipated. The reasons for the variations should be explained fully and clearly against each such item. If no excesses or savings are anticipated a blank statement should be submitted. It is essential that the statement is prepared with the utmost care, as inaccurate statements may at times have serious repercussions.

Note : Explanations of all important variations in the Revised Estimates as compared to Budget Estimates should invariably be given. The explanation should be precise and informative, and vaguely worded phrases such as “decrease in receipts was due to smaller receipts obtained” or “increase in expenditure was due to larger expenditure on certain items” should be avoided. The reasons for decrease in revenue and increase in expenditure should be clearly stated.

55. Revised estimates to be framed by the Finance Department The revised estimates to be included in the annual budget will be prepared by the Finance Department with the help of –

(a) registers of actuals of revenue and expenditure maintained by it for the purpose :

(b) rough preliminary estimates furnished by the Accountant General in appropriate column of the budget form showing estimates of various departmental budgets for the next year;

(c) the preliminary statements of anticipated excesses and savings in expenditure submitted by officers (vide para. 54 above); and

(d) the revised estimates in respect of different heads furnished by the administrative departments concerned .

56. Revised estimates for particular receipt heads - Revised estimates of revenue receipts should also be submitted so as to reach the Finance Department not later than 30th November every year by the Controlling Officers and Departments .No particular form is prescribed, but the forwarding memorandum should explain fully and clearly how the revised figures have been arrived at.

The administrative departments of the Government and controlling officers may obtain such information from subordinate authorities as they may consider necessary.

57. Corrections to revised estimates - Any appreciable variations discovered in the revised figures of expenditure and receipts subsequent to their communication to the Finance Department should be communicated through administrative department in any case not later than December 5.