Appendix 2 — GFR

APPENDIX - 2 [See Rule 52] PROCEDURE FOR PREPARATION OF DETAILED ESTIMATES OF RECEIPTS 1. Revenue receipts. - These comprise

(i) Central taxes, duties and cesses administered by the Central Board of Direct Taxes and the Central Board of Excise and Customs;

(ii) local taxes and duties and other receipts in relation to the Union Territories without Legislature;

(iii) interest receipts of loans and advances by the Central Government as also interest charged to commercial departments, etc.,

(iv) notional receipts from adjustments based on principles of accounting like grant assistance from foreign Governments or International institutions; and

(v) all other revenue receipts including dividends on equity investments of the Central Government, cesses collected by the Ministries and Departments, etc. 2. Capital Receipts. These comprise

(i) Internal debt (market loan, treasury bills, etc.);

(ii) External debt;

(iii) Repayment of loans and advances made by the Central Government;

(iv) Disinvestment Receipts

(v) Other Liabilities. 3. (1) Estimates of receipts of Central Taxes and Duties and External Aid receipts are prepared within the Ministry of Finance by the Central Board of Direct Taxes, the Central Board of Excise and Customs and the Controller of Aid Accounts and Audit. Estimates of internal debt (market loans) receipts are framed by the Budget Division. (2) Estimates of revenue receipts of the Union Territory Administrations will be furnished to the Ministry of Finance by the concerned Audit Officer / Accounts Officer wherever departmentalization of accounts has not taken place and by the Controller of Accounts of the Union Territory Administrations where departmentalization of accounts has been introduced. (3) Estimates of receipts in all other cases will be prepared by Controller of Accounts of each Department after obtaining necessary data by the 30th November from the various organizations / field units and such scrutiny as may be necessary in the light of policy decisions and other post Budget developments. 4. Estimates will be furnished to the Ministry of Finance in prescribed forms (GFR 2, 2-A and 2-B) by the prescribed date, each year for the ensuing Budget. 5. (1) In preparing the Revised Estimates, while previous year's actuals and current year's trends will be material factors to review the original Budget Estimates, special attention should be devoted to making as realistic an estimate as possible of receipts which are likely to materialize during the rest of the financial year. (2) In framing the Budget Estimates for the ensuing year, the estimating authorities should exercise utmost care. While all receipts which can be foreseen in the light of latest trends, decisions and developments must be provided for, care should be taken to ensure that undue optimism does not influence these estimates. Similarly, where the receipts have a seasonal character, due note should be taken thereof in preparing the estimates. (3) Receipts by way of recoveries from Central Government Ministries / Departments, are to be excluded in preparing Receipt Estimates. Other recoveries (from the State and Union Territory Governments, foreign Governments, companies and statutory bodies, individuals, etc.) will, however, be included in the Receipt Estimates. (4) Estimates of receipts by way of interest on loans and advances will be based on the terms of the loans sanctioned, as entered in the Loan Registers, including defaults, if any. The estimates should be realistic; that is to say, that the estimates should reflect not merely what is due but what is likely to be realized during the year together with the reasons for non-recovery of the difference between receipts due and assumed in the estimates. In the case of Public Sector Units, interest receipts expected from their internal resources should be distinguished from notional recoveries offset by corresponding expenditure provisions in the form of subsidies and loans. Similarly, where repayments due are refinanced by further loans or by conversion of past loans into equity, the details should be furnished. (5) In reporting estimates of receipts by way of foreign grant assistance in cash or in kind, care should be taken to classify foreign grant receipts in cash under the Major Head '1605 External Grant Assistance' and those in the form of commodities under the Major Head '1606 Aid Materials and Equipment'. In the case of commodities grants, identical provision will be made in expenditure estimates under the Major head '3606 Aid Materials and Equipment's' (both as debits to represent the notional payment therefor and as credits - recoveries in reductions of expenditure - to reflect the counter-balancing entries), as well as under the final functional Head of Account showing the final destination and use of the aid materials and equipment.(Refer to Form GFR 2A). NOTE. For utilization of cash grants, provision in expenditure estimates under the final functional Heads of Account will be necessary. (6) In reporting the estimates, the estimating authorities should confine their estimates to those items of receipts which are to be accounted for finally in their own accounts and ultimately in the accounts of the Ministry/ Department to which they are subordinate. All other receipts/recoveries entering the accounts of another Ministry/ Department should be communicated to the concerned Ministry/Department for consolidation in their estimates (e.g., receipts of CGHS contributions and rent recoveries in respect of Government accommodation).