12.2.1 The Finance Accounts comprises of two parts- Part I and Part II. Part I presents the summarized statements in respect of Revenue, Capital, Debt, Deposit, Suspense and Remittances transactions and Contingency Fund. Part II has detailed statements in respect of thesetransactions, along with other related statements. Part II of the Finance Accounts is further sub- divided into two sections `A' & `B'. While section `A' comprises of detailed accounts and statements relating to Receipts and Expenditure on Revenue and Capital accounts, section "B' has detailed accounts and statements relating to Debt, Deposit, Suspense & Remittances and the Contingency Fund.
12.2.2 The basic inputs for compilation of Finance Accounts are as follows:-
(1) SCT; (2) Journal Entries; (3) Prior Period Adjustments; (4) Proforma Adjustments; and (5) Disclosures relating to Guarantees, Grants-in-aid, Loans and advances and Investments. (6) Progressive figures up to the end of the previous year relating to DDSR Heads and Capital Expenditures
12.2.3 While the first five inputs mentioned above are received from the various accounting authorities, progressive figures up to the end of previous year are available in the records of Finance Accounts Section.
12.3 MATERIAL FOR FINANCE ACCOUNTS:
12.3.1 The Finance Accounts Section in the office of CGA issues a circular before the close of each financial year, prescribing the time schedule for preparation and closing of Union Government Accounts. Circulars are also issued by this section detailing guidelines relating to the preparation and submission of SCT, Journal Entries and other materials for the Finance Accounts.
12.3.2 The Finance Accounts is prepared on the basis of materials indicated in the Table below, including the SCT that constitute the base material, and is furnished by the authorities indicated below.
(a) Statements of Finance Accounts, SCTs and other materials. Principal Accounts Offices relating to Ministries / Departments, AG and separated Accounts Organizations of Union Territory Administrations/Governments.
(b) SCTs and other material. Dy. Director General, Postal Accounts.
(c) SCTs and other material. Dy. Director General, Telecommunications.
(d) SCTs and other material. Controller General of Defence Accounts.
(e) SCTs and other material. Railway Board.
What This Means
The Finance Accounts of the Union Government is a comprehensive financial statement in two parts. Part I has summarized statements covering Revenue, Capital, Debt, Deposit, Suspense, Remittances, and Contingency Fund. Part II has detailed accounts split into Section A (Receipts and Expenditure) and Section B (Debt, Deposit, Suspense, Remittances, and Contingency Fund). The accounts are compiled from SCTs, Journal Entries, Prior Period Adjustments, Proforma Adjustments, disclosure statements, and progressive DDSR figures.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
1Finance Accounts has Part I (summary statements) and Part II (Section A: Receipts & Expenditure; Section B: Debt, Deposits, etc.)
2Basic inputs: SCT, Journal Entries, Prior Period Adjustments, Proforma Adjustments, and disclosures
3SCTs (Statement of Central Transactions) constitute the base material for compilation
4Progressive figures up to previous year-end for DDSR heads and Capital Expenditure come from existing records
5Inputs received from various accounting authorities across all Ministries and Departments
Practical Example
The Finance Accounts Section in CGA's office begins compiling the annual Finance Accounts by collecting SCTs from all Principal Accounts Offices across Ministries. They also receive journal entries for corrections, proforma adjustments for past-year items, and disclosure statements on guarantees, grants, loans, and investments. Using these inputs along with progressive DDSR balances from their own records, they compile all 17 statements that make up the Finance Accounts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the difference between Finance Accounts and Appropriation Accounts?▼
Appropriation Accounts show grant-wise comparison of budget vs actual expenditure for each Ministry. Finance Accounts present the overall financial position of the Union Government — revenue, capital, debt, deposits, and balances — covering all transactions across all Ministries.
What are Prior Period Adjustments in Finance Accounts?▼
Prior Period Adjustments are corrections relating to transactions of earlier financial years that are identified and rectified in the current year. Under IGAS-4, these are disclosed separately in the Finance Accounts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
12.3.3 The following instructions shall be followed with regard to the preparation and submission of the SCTs to the CGA.
12.3.4 The SCT shall be submitted to the CGA, in the prescribed form. The figures of expenditure under CFI in SCT should reconcile with the figures of Appropriation Accounts, prepared subsequently.
12.3.5 The SCT should include the progressive figures up to Supplementary-I accounts. After its submission to the CGA, any further correction to the SCT, shall only be carried out by proposing a Journal Entry after obtaining the approval of CGA. The proposal for Journal Entries shall be sent to the CGA up to the time limit specified in the yearly circular of Time Schedule and Annual closing of Accounts, along with the justifications for the corrections. These proposals should be supported by Journal Entries in Form CAM-34, duly signed by the concerned Head of Accounting Organization viz. Pr.CCAs/CCAs/CAs(i/c) as the case may be. This shall be accompanied with the related corrections to the SCT, for seeking the approval of CGA and including them in the Accounts. The figures in the SCT and JEs are to be indicated in ‘thousands of rupees’.
12.3.6 Material for Statement No.13 comprising of:
(a) figures of receipts/disbursements during the year; and
(b) opening/closing balances under various Debt heads under the Consolidated Fund, Reserve Funds, Deposits and Advances, Suspense and Remittance heads; and the Public Account shall be furnished in the following format:
(In Thousands of Rupees)
Head of Opening Balances adopted Revised Receipt Disbursement Closing account balance through proforma from opening during during the balances (Major & as on As.G./ Pr.A.Os during balance the year as on Minor 1st April the course of year (AG- as on year 31st head of wise details and the 1st March account) particulars of April communications (Col. 2- returning certified 3) proforma 'B' should be given separately in an
Annexure) 1 2 3 4 5 6 7
Note:- Proforma corrections in respect of Statement No.13 of Finance Accounts etc. will be carried out in terms of para 5.15.2 and as below the line entries and reflected distinctly under a separate line named “Prior Period Adjustment Account” below the relevant major/minor head. The closing balance under the head will be worked out after taking into account the effect of “Prior Period Adjustment Account”.
12.3.7 The following points should be further kept in view while furnishing material for Statement No.13 and other subsidiary statements like Statement No.14 and 15:
(i) The minor heads of account indicated under each major head are strictly in accordance with the revised List of Major and Minor Heads of Account.
(ii) The ‘Receipts’ and ‘Disbursements’ against each major/minor head of account during the year matches with the corresponding figures shown in the SCT.
(iii) The figures appearing under Disbursement (column 6) and Closing balance (col.7) under the Minor heads below Major Head 8658 to Major Head 8662-Suspense Accounts, as the case may be, indicates that certain items/transactions remain outstanding. This may be on account of non-clearance or adjustment to the final head. No Outstanding balance should normally remain under any of the minor heads at the end of a year, and the same should be ensured.
(iv) If there are debit balances under the heads against which there should normally be credit balances or vice versa, the reasons for such Adverse Balances should be explained fully through footnotes. The action taken for liquidation of the adverse balances should also be indicated.
(v) Normally, there should be no minus figures under the columns relating to receipts/disbursements during the year. In case there are any such minus figures, the full reasons are required to be indicated.
(vi) The opening balances under Debt, Deposit, Suspense and Remittance heads should match with the respective closing balances in the preceding year's statement.
Note: In some cases, rectifications may be required on being detected due to reconciliation of balances, or otherwise. In such cases, the rectification of misclassification relating to earlier years will be carried out through Prior Period Adjustments as envisaged in para 5.15.3.
(vii) If any footnote in the Statement of Finance Accounts during earlier year was in the form of promise for further action/probe/remedial step, it should be ensured that such action is taken in the subsequent year, and if it was not done the reasons for the same should be indicated.
totalling will be done for each sector/sub-sector/major head at every stage, with the
grand total being recorded at the end.
12.4 COMPONENTS OF FINANCE ACCOUNTS: Apart from the certificates to be recorded in the Finance Accounts and introductory portion,Finance Accounts contains 17 Statements in all. Part-I of Finance Accounts contains summary statements whereas Part-II contains detailed accounts and other statements. These Statements, in brief are discussed below.
Finance Accounts contains five summarised statements (Statements No. 1 to 5).
12.4.1 Part-I Statement No.1 – Summary of Transactions: This statement is prepared in crores of Rupees upto two decimal places. It shows a summary of all transactions of the Union Government for the current and the previous year, with the Receipts and Expenditure transactions shown separately total Receipts matching with total Disbursements. The Summary of Transactions includes an Annexure containing Major Head-wise details of Taxes and Duties assigned to States during the year.
The total Revenue Receipts and Expenditure for the current year are compared with those of the previous year. The increase in respect of Defence, Railways and Posts is shown as a single figure, while the reasons for increase in civil departments are explained for those major heads where the increase is marked.
At the end of the Statement, transactions of Ministry of Railways are analyzed, showing their Revenue Receipts and Revenue Expenditure, the net surplus, transfer to the respective Reserve Funds and the distribution of net revenue into dividend for General Revenues if any. This write up is vetted by the Ministry of Railways before incorporating in the Statement.
12.4.2 Statement No.2 – Summary of Debt Position: This statement is prepared in crores of Rupees upto two decimals. It has three parts-
(i) Statement of Borrowings: This part contains the debt position at the commencement of the year, Receipts and Repayments during the year, the debt position at the end of the year and the net increase during the year relating to Public Debt and the liabilities on Small Savings, Provident Funds, etc. The components of Market Loans raised during the year are also shown separately as well as the total outstanding liability of the Central Government.
(ii) Other Obligations: This part of the statement includes similar information as mentioned in
(i) above in respect of Reserve Funds and Deposits (both for Funds/Deposits bearing interest and not bearing interest) separately.
(iii) Service of Debt: In this part of the statement, transactions of the current year and the previous year are compared in relation to total interest paid by the Government indicating the interest on
(a) Public Debt and Small Savings and Provident Funds
(b) Reserve Funds and
(c) Other Obligations. Total expenditure on interest and net amount of interest charges after adjustment of
(i) interest received on loans to State/UT Governments,
(ii) interest received from investment of cash balances & other items and
(iii) interest from Departmental Commercial Undertakings, PSUs/PSEs and other undertakings including Railways and Posts & Telegraphs, are reflected in this statement. These are also shown in terms of Percentage to the total revenue receipts. A footnote showing the amount of Dividend received on investments in the commercial undertakings is also incorporated.
12.4.3 Statement No.3 (IGAS-3)–Loans and Advances by the Union Government: The details under “Loans and Advances made by the Union Government” shall be disclosed as per the Indian Government Accounting Standard (IGAS) 3 on “Loans and Advances” made by Governments as detailed below:-
(i) the summary of Loans and Advances showing Loanee group-wise details.
(ii) the summary of Loans and Advances Sector-wise details
(iii) the summary of repayments in arrears from State/UT Governments and other loanee entities.
1. Out of total amount of ₹ ……… lakhs paid as loans to State/Union Territory Governments, loans granted to cover gaps in resources of the State/Union Territory amounted to ₹ …… lakhs.
2. In pursuance of the recommendations of the 13th Finance Commission, repayments by the States/Union Territories amounting to ₹ ……… lakhs have been written off up to March 31, (xxxx).
3. At the beginning of the year, there was a balance of Rs……lakhs sanctioned to State Governments as Ways and Means Advances. During the year, an amount of ₹ …......Lakhs was paid as Ways and Means Advances to State Government for clearance/avoidance of overdrafts from the RBI. The State Governments repaid ₹ …... lakhs during the year leaving a balance of Rs….. lakhs.
4. Following are the cases of a loan having been sanctioned as “loan in perpetuity’: (In lakhs of rupees)
S. No. Loanee entity Year of Sanction Sanction Order No. Amount Rate of Interest 1 State and Union Territory Governments 2. Other loanee entities TOTAL