Para 4.6 — MSO (A&E)
Original Rule Text
4.6 It should be borne in mind that regarding the question as to whether expenditure shall be met from current revenues or from borrowed moneys the decision of the Executive should normally be acceptable to the Accountant General so long as the decision is generally in conformity with the budget proposals passed by the Legislature or has otherwise received its specific approval. It is, however, the duty of the Accountant General to bring to notice of the Government cases in which the classification of expenditure between revenue and capital or its distribution between current revenues and loan funds appears to be contrary to the dictates of sound and prudent financial administration. The principles upon which classification of expenditure
between capital and revenue should be based are described in the following paragraphs.
What This Means
The AG should generally accept the Executive's decision on whether expenditure is met from current revenue or borrowed funds, as long as it aligns with the budget passed by the Legislature or has specific legislative approval. However, the AG has a duty to flag cases where the classification between revenue and capital or between current revenue and loan funds appears contrary to sound financial principles.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1The AG should normally accept the Executive's decision on funding source for expenditure
- 2This acceptance is conditional on the decision conforming to the Legislature-approved budget
- 3The AG must flag cases where revenue-capital classification appears financially unsound
- 4The AG must also flag improper distribution of charges between current revenue and loan funds
- 5The detailed principles for capital-revenue classification are in subsequent paragraphs
Practical Example
A state government decides to fund a Rs. 1,000 crore irrigation project from current revenue instead of borrowings, as approved in the budget. The AG accepts this classification. However, if the same government classifies routine annual canal maintenance of Rs. 50 crore as capital expenditure to reduce its revenue deficit figures, the AG should object because maintenance is a revenue charge — this classification violates sound financial principles.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
When can the AG challenge the government's classification decision?▼
Does the AG have veto power over the government's classification?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.