Para 4.10 — MSO (A&E)
Original Rule Text
4.10 Expenditure debitable to capital may be financed from the following sources:-
(i) specific for a particular purpose;
(ii) non-specific for all Government purposes;
(iii) unfounded; and
(c) Sources other than revenue and borrowings e.g. accumulated balances.
For the purpose of accounts
(b) and
(c) are grouped together the capital expenditure met from these sources being described as outlay financed outside the Revenue Account and being quite apart from treatment from expenditure met from Revenue. On the other hand expenditure of a capital nature met from revenue is accounted for under the appropriate major head within the Revenue Account as any other expenditure of a revenue nature.
What This Means
Capital expenditure can be financed from three sources: revenue, borrowings (either specific-purpose or general-purpose loans, funded or unfunded), and other sources like accumulated balances. For accounting purposes, capital expenditure funded from borrowings or accumulated balances is shown 'outside the Revenue Account,' while capital expenditure met from revenue is recorded under the appropriate major head within the Revenue Account itself.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Capital expenditure can be financed from revenue, borrowings, or accumulated balances
- 2Borrowings may be specific (for a particular purpose) or non-specific (for general government purposes)
- 3Capital expenditure from borrowings/balances is shown outside the Revenue Account
- 4Capital expenditure met from revenue is treated like any other revenue expenditure in accounts
- 5The accounting treatment depends on the source of financing, not the nature of expenditure
Practical Example
A state government decides to build a new secretariat building costing Rs. 200 crore. If it finances this from a specific loan, the expenditure appears outside the Revenue Account under the relevant Capital head. But if the state has a revenue surplus and decides to fund the building from current revenue, the same Rs. 200 crore is accounted for under the appropriate major head within the Revenue Account, just like salary or maintenance expenditure.
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 'specific' and 'non-specific' borrowings?▼
Why does the same capital expenditure appear in different places depending on its funding source?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.