Para 18.2 — CAM
Original Rule Text
18.2 BUDGETING IN GOVERNMENT OF INDIA
18.2.1 Budgeting exercise is not only cyclical, but a continuous process. Budget formulation is just the beginning of this process. This first stage (Budget Estimates (BE)) is based on expenditure patterns of past year(s), committed liabilities of current and anticipated financial commitments of next financial year.
18.2.2 However, as no estimation can fully match the exigencies of real world, soon demands for funds from various quarters for unanticipated activities start emanating. Thus, the process of re-appropriation of funds starts. Pressing demands are processed for the approvals of the competent authorities as defined in the Delegation of Financial Power Rules (DFPRs). As per the delegation of powers, some re-appropriation proposals can be approved by the Secretary of the Ministry/Department, some need the approval of Secretary, Department of Expenditure, Ministry of Finance, and some other proposals attracting New Service/New Instrument of Service (NS/NIS) need approval of the Parliament. For the proposals attracting NS/NIS, approval of the Parliament are obtained through Supplementary Demands for Grants (SDGs).
18.2.3 The initial estimates i.e. BE undergo a mid-year review in October/November every year and Revised Estimates (RE) are projected. At the RE stage, Ministries/Departments get an
opportunity for a comprehensive review of their allocations so as to re-align their budgetary requirements and correct the errors of estimations. At this stage expenditure of six months of the current year is available as an indicator of utilization pattern. Significantly, in the discussions at the RE stage, the BE of the next financial year is also discussed and finalised. Thus, the next cycle begins.
18.3 ROLE OF HEAD OF ACCOUNTING ORGANIZATION i.e. Pr.CCAs/CCAs/CAs(i/c) IN BUDGETING:
As financial management specialists in Ministries/Departments, Head of Accounting Organization i.e. Pr.CCAs/CCAs/CAs(i/c) as the case may be, have a critical role to play in various activities related to Budget formulation and budget execution as detailed below:
What This Means
Government budgeting is a continuous cycle, not a one-time exercise. It starts with Budget Estimates (BE) based on past expenditure patterns and anticipated commitments. As unanticipated needs arise during the year, re-appropriation or Supplementary Demands for Grants (SDGs) are processed — some needing Ministry-level approval, some requiring Finance Ministry approval, and those involving New Service/New Instrument of Service requiring Parliament's approval. In October-November, Revised Estimates (RE) provide a mid-year correction opportunity, and simultaneously, the next year's BE is discussed. The Head of Accounting Organization plays a critical role throughout.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Budgeting is cyclical and continuous — BE, re-appropriation, RE, and next year's BE discussions overlap
- 2BE is based on past expenditure patterns, committed liabilities, and anticipated financial commitments
- 3Re-appropriation authority varies: Secretary of Ministry, Secretary (Expenditure), or Parliament depending on the nature
- 4New Service/New Instrument of Service proposals require Parliament's approval through Supplementary Demands for Grants
- 5RE stage (October-November) reviews 6 months of actual expenditure and simultaneously finalizes next year's BE
Practical Example
In September, the Budget Division issues its annual circular. The Pr. CCA of the Ministry of Education analyzes actual expenditure for April-August and finds that the Mid-Day Meal scheme has spent only 30% of its BE while the scholarship scheme is at 65%. For RE, the Pr. CCA recommends reducing the Mid-Day Meal allocation and increasing scholarships. During the same October meeting, the Pr. CCA also provides realistic BE projections for the next financial year based on 5-year expenditure trends and new policy announcements.
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 re-appropriation and Supplementary Demands?▼
When are Revised Estimates prepared?▼
What is a New Service/New Instrument of Service (NS/NIS)?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.