CHAPTER V
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Instructions for Preparing Estimates of Ordinary Expenditure
28. Estimates to be complete and accurate. - The estimates of ordinary expenditure are those for the expenditure expected to be incurred in the coming year for the normal working of the departments with reference to existing sanctions. No item constituting 'new expenditure' (See Chapter VIII) should, therefore, be included in these estimates. The estimating should be as close and accurate as possible and the provision to be included in respect of each item should be based on what is expected to be actually paid or spent (under proper sanction) during the year, including arrears of past years, and not merely confined to the liabilities pertaining to the year. The need for every item must be fully scrutinised before provision for it is included and the amount should be restricted to the absolute minimum necessary. Even in framing estimates in respect of what are called 'fixed charges' it must be borne in mind that nothing is irrevocably fixed for all time and the position should be brought under review periodically. The various general or specific orders issued by Government or by Heads of Departments for economy in expenditure must be carefully borne in mind and complied with. All estimating officers must know that an avoidable extra provision in an estimate is as much a financial irregularity as an excess consequences for which the officers found to be a fault may be held personally responsible.
Under para-6 of the manual, 45 standard objects had been prescribed and they can further be grouped as under:
i. Salary: includes standard object pay, dearness allowance, other allowances, interim relief and grants-in-aid for pay and allowances.
ii. Compensatory allowances and Honoraria: includes standard object traveling allowance, transfer traveling allowance, honorarium and Leave travel concession.
iii. Establishment Expenditure: it includes standard objects wages, office expenses, electric dues, water taxes/water charges, printing and stationary, office furniture and apparatus, telephone expenses, purchase of vehicles and its maintenance (Standard Object code 14,15,27 & 28). Professional and special services, rent, rate and taxes, publications, advertisement, trade and taxes, hospitality expenses, secret fund, training and other expenses.
iv. Grant-in-aid and Scholarship/Stipend: includes standard object grant-in-aid/contribution/State assistance (standard object code – 20) and Scholarship/Stipend.
v. Capital work, supplies and maintenance: includes standard objects Major
construction work, Minor construction work, machines, its allied work and appliances, maintenance, materials and supplies, medicine and chemicals, hospital equipments and diet expenses.
vi. Investment, Repayment of Loan and Interests, Depreciation and book adjustment:
includes standard objects investment/loan, interest/dividend, depreciation, inter account suspense, losses and defalcation and suspense.
vii. Retirement Benefits: includes standard objects pension/gratuity/ commutation.
Utmost care is to be taken to classify the scheme ;on the basis of ;
29. Obsolete items to be omitted. - The estimates of the current year must never be adopted blindly as a basis for framing those of the following year. There is always a temptation to save trouble by taking the current year's estimates for granted and adding something to certain items on which increased expenditure is foreseen. This tendency is to be strongly deprecated. The estimating officer must give his closest personal attention to each and every item and see that the items of expenditure, which have become obsolete, are omitted. At the same time it is his duty to see that provision for all expenditure that can be reasonably foreseen and does not constitute 'new expenditure' is made in the estimates. Care must, however, be taken that no provision for increased expenditure requiring specific sanction of the competent authority is included unless that sanction has already been obtained and that even in the case of a sanctioned scheme provision is made for only so much of it as can actually be brought into effect in the budget year.
30. Past actual to be consulted. - In preparing the estimates, the average of the actual of the past three years, as also the revised estimates for the current year, should invariably be kept in sight; not as something that could conveniently be repeated but as a basis for an intelligent anticipation which takes into account any noticeable tendency for the expenditure to rise or decline, any abnormal features during the past years, any recognisable regularity in the pitch of the expenditure and any special features known to be certain or likely to arise during the budget year. When any item of expenditure, although covered by standing sanction, is to be held in abeyance under the orders of the competent authority, provision for it should be omitted. If it is proposed that it should be revived, specific reference to the competent authority should be made well in time and in that case the estimating officer can include the provision in the estimates but he must draw pointed attention to this in his budget note at the appropriate place.
31. Lump provision to be avoided. - Lump provisions should not, as a rule, be made in the estimates. In some cases, however, lump provisions become unavoidable (e.g. provisions in the grant of Finance department for future increase in dearness allowance). Except when the expenditure out of lump allotments is regulated by standing sanctions, instructions or rules, full explanation in justification of the provisions proposed, with indication of the principal items, should be given in the budget note and the working out of details should be started immediately after the amounts have been finally included in the budget so that there may be no delay in their examination and the issue of sanctions.
32.Estimates for pay and leave salaries - The estimates should be framed on the basis of expenditure required to be incurred in the coming year on account of the pay (including special pay and personal pay but excluding compensatory allowances) of the officers and the staff likely to be on duty and the actual pay to be drawn by each, irrespective of the sanctioned strength. In the case of holders of posts carrying time scales of pay provision should also be made for increments falling due during the year. In the case of a cadre which includes leave or training reserves, the estimate should provide not only for such of its members as are likely to be on duty but also those who are likely to take leave or be under training, but no separate provision should be made on account of leave salaries. In small cadres of gazetted officers provisions for salaries need not be made unless it is definite that certain officers will go on leave. Provision for leave salaries in respect of large cadres of gazetted officers and of non-gazetted establishments should not be made on any percentage basis but on the average of the past actual plus such increase for new posts as may be considered necessary. It will be advantageous if information is obtained beforehand as to the number of persons intending to take leave in the budget year, the period for which each intends to take leave and the likely leave salary payable in each case.
No provision should be made for posts held in abeyance. If it is considered necessary to revive any of them in the ensuing year, proposals therefore should be submitted in good time and necessary orders of the competent authority obtained.
33. Numerical strength and pay scales to be indicated - The number of posts budgeted for in the current year and those for which provision has been proposed for next year in the estimates should be clearly indicated, both for permanent and temporary posts. The scales of pay should also be indicated under each standard object, but it will be sufficient if only the minimum and the maximum pay is shown instead of the full scale. In the case of temporary posts, provisions should be made only for the continuance of such posts are definitely required to be retained for which they will actually be required. The number and date of the orders by which each post was created or last retained should invariably be quoted for reference. If any additional temporary posts are required for any sanctioned scheme or project on the basis of the approved programme of work, provision for them may be included in the budget estimates. Their necessity should, however, be clearly explained and it should be reported whether the cost involved is included in the sanctioned cost of the scheme or project.
34. Provision for pay and fixed allowances for March to be made in the budget of the following year - The pay, leave salary and fixed allowances of a government servant for a month become due only at the end of the month. Provision for them for the month of March should, therefore, be made in the budget estimates of the following financial year.
35. Compensatory Allowances and Honoraria - In the case of fixed allowances the estimates should be based on the sanctioned rates and after making actual calculations of amounts to be drawn by the incumbents of the various posts in the budget year and after taking into account changes, if any, in the rates due to increase in pay on accrual of annual increments. The estimates for fluctuating items should generally be based on the current year’s allotment viewed in the light of the average of the past three years’ actual, allowance being made for any causes likely to modify that figure. Particular care should be taken to see that the estimate for traveling allowance (other than fixed traveling allowance) is restricted to the absolute minimum amount necessary. Unless full and convincing reasons have been given in the budget note, all increases proposed by the estimating officers are liable to be cut down by the Finance Department.
36. Establishment Expenditure. – The estimates in the relevant standard object of expenditure should invariably be prepared keeping in view the changed requirement and should not be a mere extrapolation of the historical expenditure. The justification should be worked out with a view to reduce cost without adversely affecting work efficiency. Sufficient care is to be taken that the expenditure is classified under proper standard object, not camouflage under the omnibus ‘Other Expenditure’
37. Estimates for the Categories other than salary, allowances and Establishment expenditure. – The estimates related to categories (iv) to (vii) of para 28 should be prepared with reasonable accuracy. The scrutiny related to prescribed formalities like; technical specification, costing, cost and benefit analysis, purchase procedure, clearance of project/fund from the concerned agency, financing pattern, survey of location or individuals (say, category of institution/student), calculation of amount due for payment, justification of continuity of project/function, time schedule etc. No increase can be proposed by the estimating officers in the fixed annual allotments, save in exceptional circumstances. The estimate should generally be framed on the basis of the average of the actual of the past three years and the revised estimate of the current year, but care must be taken to see that all non-recurring and extraordinary items of the past years and the current year are ignored while provision for all foreseeable items not constituting 'new expenditure' and likely to be required in the budget year is included in the estimates. There is always need for utmost economy in non-committed expenditure and the estimates proposed by the departmental officers are likely to be cut down considerably by the Finance Department if the budget notes are wanting in details of the principal items or do not give full and convincing reasons in justification of the estimates proposed. Vague statements, such as 'normal growth of expenditure' or 'normal expansion of the scheme' will not be accepted. The reasons must be precise and the estimates supported by details and past actual.
38. Provision for payment of decretal amounts or awards by arbitral tribunals, etc. - As stated in para. 15 (10) (v) of Chapter II, expenditure on payments made in satisfaction of any judgement, decree or award of any court or arbitral tribunal is to be treated as charged on the Consolidated Fund of the State. Provision for such expenditure should, therefore, be made under the relevant standard object, "Payments in satisfaction of decrees of courts, awards of arbitral tribunals, etc. (Charged)" under specific head of accounts. As re-appropriation between charged and voted provisions is not permissible, it is necessary that the charged provision should be restricted to the absolute minimum, additional funds being arranged later, if required, through the supplementary estimates. In emergent cases advances can be obtained from the Contingency Fund to be recouped by presentation of supplementary demands at the earliest opportunity.
