Para 18.3.5 — Under FRBM Rules, specific fiscal transparency dis
Original Rule Text
18.3.5 Preparation of FRBM disclosures 18.3.5.1 As per Fiscal Responsibility and Budget Management Rules, 2004, as a measure of fiscal transparency, certain statements are to be included in Receipt Budget. They are Guarantees given by the Government, Tax Revenues raised but not realized, Arrears of Non - Tax Revenues, and Asset Register.
18.3.5.2 Head of Accounting Organization i.e. Pr.CCAs/CCAs/CAs (i/c) as the case may be should ensure that the data provided for the purpose of these disclosures exactly matches with accounts data, wherever applicable.
18.3.6 Preparation of Medium-Term Expenditure Framework (MTEF) 18.3.6.1 Section 3 of the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the Government to lay the Medium-Term Expenditure Framework (MTEF) Statement in both Houses of Parliament. The MTEF Statement sets a three-year rolling target for the expenditure indicators with specification of underlying assumptions and risks involved. MTEF gives a medium-term perspective to the Central Government finances and specifies a path for Government’s fiscal consolidation.
18.3.6.2 As per FRBM Rules, 2004 MTEF Statement has to be laid in the session immediately following the session of the Parliament in which the budget has been presented. Therefore, Ministries/Departments are expected to start the work related to preparation of MTEF immediately after budget is passed by the Parliament.
18.3.6.3 Since MTEF shows estimated expenditure for next three financial years, Head of Accounting Organization i.e. Pr.CCAs/CCAs/CAs (i/c) as the case may be, should play active role in the process of finalizing the estimates. Analysis of the past trends of expenditure and approved scheme outlays are the key to providing useful inputs in projecting estimates in consultation with administrative divisions.
18.3.7 Preparation of Detailed Demands for Grants (DDGs) 18.3.7.1 Based on final ceilings of RE and BE decided in pre-budget meetings, Ministries/Departments prepare their respective DDG in UBIS. PFMS fetches DDGs data from UBIS directly and makes it available for Ministries/Departments for incurring expenditure in the new financial year.
18.3.7.2 Head of Accounting Organization i.e. Pr.CCAs/CCAs/CAs (i/c) as the case may be, should ensure that allocation for each spending unit is realistically projected. Here again analysis of past expenditure patterns would help in decision making.
18.3.7.3 Ministries/Departments shall ensure that the totals for each Major Head and the total provisions by Revenue and Capital Sections separately for ‘charged’ and ‘voted’ included in the DDG exactly correspond to the provisions included in the DG prepared by the Budget Division.
18.3.7.4 Administrative Divisions, being primarily concerned with the programme implementation, are not expected to know the intricacies of the budget classification systems, and the Budget Sections have to assist in this regard. Whenever in doubt, the Principal Accounts Office of the Ministry must be consulted.
18.3.7.5 Therefore, while preparing the DDG it is important to ensure that the classification, namely, major head, minor head, etc. is as per the heads of account prescribed in the List of Major and Minor Heads of Account, and available in Account Code Directory of PFMS.
18.3.7.6 While sending proposal for opening of a new budget line in DDG to Budget Division, Ministry of Finance it shall be ensured that Minor Heads like 800 (Other Receipts/Other Expenditure/Other Deposits/Other Loans), and Object Heads like 43 (Suspense),49 (Other Revenue Expenditure),60 (Other Capital expenditure), and 77 (Other Fixed Assets) are avoided as much as possible. Efforts should be made to identify account head which best describes the function/activity for which budget head is proposed to be allocated. Further, Head of Accounting Organization should frequently analyse expenditure being captured under these account heads and suggest program divisions to avoid the same to the extent possible.
18.3.7.7 All other instructions detailed in Budget Circular related to DDG preparation should be followed scrupulously. It shall also be ensured to upload DDGs in respective administrative Ministry/ Department website.
What This Means
Under FRBM Rules, specific fiscal transparency disclosures must be included in the Receipt Budget: Guarantees given by Government, Tax Revenues raised but not realized, Arrears of Non-Tax Revenues, and Asset Register. The Head of Accounting Organization must ensure this data matches actual accounts. Additionally, the Medium-Term Expenditure Framework (MTEF) provides a 3-year rolling expenditure forecast laid before Parliament after the budget session. For Detailed Demands for Grants (DDGs), the Head of Accounting Organization ensures realistic allocation, correct classification under LMMHA heads, and avoidance of residual heads like 800/43/49/60/77.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1FRBM disclosures: Guarantees, Unrealized Tax Revenue, NTR Arrears, and Asset Register — data must match accounts exactly
- 2MTEF provides a 3-year rolling expenditure forecast; laid in Parliament after the budget session
- 3DDG allocations must use correct heads from LMMHA/PFMS Account Code Directory
- 4Avoid residual heads: Minor Head 800, Object Heads 43 (Suspense), 49, 60, and 77 wherever possible
- 5DDGs must be uploaded on the Ministry/Department website and totals must match DG prepared by Budget Division
Practical Example
While preparing the DDG, the Budget Section proposes to allocate Rs 100 crore under 'Other Revenue Expenditure' (Object Head 49). The Pr. CCA reviews and identifies that Rs 70 crore is for a specific training programme. She advises creating a proper budget line under the relevant functional head instead of using the catch-all Object Head 49. She also checks the FRBM disclosure data: the guarantee register shows Rs 5,000 crore in outstanding guarantees, which she verifies against the PAO records before submission to Budget Division.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why should residual heads like Minor Head 800 or Object Head 49 be avoided?▼
What is the Medium-Term Expenditure Framework (MTEF)?▼
Who is responsible for FRBM disclosure accuracy?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.