CHAPTER IX

PREPARATION OF THE ESTIMATES AND THE BUDGET BY THE FINANCE  DEPARTMENT

73. Finance Department’s responsibility for preparing the Budget : Under the rules made by the Governor under Article 166 (2) and (3) of the Constitution and the instructions issued thereunder, the Finance Department has been charged with the responsibility to prepare a statement of estimated revenue and expenditure, to be laid before the Legislature in each year. Although the material is supplied by the Heads of Departments and other estimating officers, the actual preparation of the estimates and the budget thus falls upon the Finance Department and it is solely the business and responsibility of that department to settle the estimates of receipts and disbursements.

74. Scrutiny of departmental estimates : On receipt of the departmental estimates (Ref: Chapter III), the Finance Department will scrutinise the estimates, item by item, with due regard to (a) the explanations furnished by the estimating officers, (b) the comments of the Accountant General and (c) the recommendations, if any, of the administrative departments concerned on the estimates submitted through them ( Ref: para. 19 of Chapter III ).

75. In respect of the estimates of receipts the Finance Department will take into account any special information affecting the estimates for the forthcoming year which it may possess and which has not already been taken into account by the estimating officer, the Accountant General or the administrative department.

76. In respect of the estimates of disbursements the Finance Department will direct the closest scrutiny to the items relating to fluctuating and non-recurring charges. It is only in rare instance that it should be necessary for the Finance Department to make any modification in the estimates of recurring charges proper; it will nevertheless particularly examine the estimates under primary units related to salary , and if necessary, modify them on the basis of actuals of previous year. The Finance Department will scrutinise the estimates of fluctuating charges, item by item, and will excise any increases which are not adequately or satisfactorily explained. It will further scrutinise items in respect of which no increase is proposed, with the object of effecting any legitimate reduction which can be made. It will similarly scrutinise the estimates of non-recurring charges, excising any amounts which are not covered by sanction and eliminating or reducing the estimates for the forthcoming year where there is no reasonable certainty that the amount estimated will be spent. It will also scrutinise and make such corrections as are necessary in the classification of receipts and disbursements (i) under the various major heads, minor heads and primary units of appropriation and (ii) under –

(a) votable and charged,

(b) revenue and capital,

(c) plan and non-plan.

77. Enquiries by the Finance Department to be attended to  promptly : In the course of the examination of the estimates, the Finance Department may find that in respect of particular items further explanations or clarifications, etc., are necessary before the estimates can be settled. The necessity of such further information being supplied to it with the least possible delay needs no emphasis. The Finance Department will normally address their inquiries to the administrative departments concerned of the Secretariat and the latter will furnish the required information after consulting their Heads of Departments, etc., where necessary. In cases where it is clear that the details will have to be obtained from the Heads of Departments and other estimating officers, the Finance Department may address their inquiries direct to the officers concerned and send a copy to the administrative departments concerned. Final action will, however, ordinarily be taken by the Finance Department only on the basis of the report received from the administrative department which should be full and clear. The required information must be furnished to the Finance Department within the time allotted for the purpose, failing which the Finance Department will finalise the estimates at its own discretion and the responsibility for any incorrectness of the estimates will ultimately devolve on the officers of the administrative departments concerned.

78. Compilation of Detailed Estimates by the Finance Department : As a result of its scrutiny of each departmental estimate the Finance Department will adopt figures for each item included in the estimate and will cause the estimate as so adopted to be compiled in the form it appears in the Detailed Estimates. The Finance Department may, if it considers necessary, send either before or after its scrutiny, any departmental estimate to the Secretary of the administrative department concerned either for information or to enable him to clear up any doubtful point. It must, however, be clearly understood that this is not obligatory and it is for the Secretary concerned to go through each departmental estimate received from the estimating officer before it is sent to the Finance Department.

79. Further scrutiny and submission of the estimates to the Council of Ministers : When all the departmental estimates have been settled and detailed estimates are complete in all respects, the Finance Department will re-examine the estimates as a whole and will make such changes as may be found to be necessary due, for example, to overall unsatisfactory financial position or modification of the contemplated loan programme or any other financial factor affecting the estimates. A preliminary note by the Finance Secretary, based on the figures in the consolidated estimates, together with the schedule of new expenditure and the connected explanatory notes, shall then be placed by the Finance Department before the Council of Ministers ordinarily in the second week of January. The Council may then consider questions of policy arising from the budget, such as fresh taxation, floatation of loans in the market and select, with reference to the funds available, the new items which are to be included in the budget. The amounts for items thus selected shall be added under the appropriate demands for grants in the detailed estimates to be presented to the Legislature. Other decisions taken by the Government affecting those estimates will also be incorporated therein. The Budget is then ripe for presentation to the Legislature.

80. Last stage modification : The Finance Department may, at any stage before the budget is presented to the Legislature, make such modifications in the estimates as may be necessitated by the emergence or the discovery of factors disturbing the estimates so far framed. Such action is incumbent on the Finance Department in the fulfilment of its responsibility to present the estimates as correctly as possible.