P.M.SomanAO, RTTC, Trivandrum

Types of BudgetTwo types of budget

Revenue Budget

Capital Budget

Importance & MeaningBudgeting is the process of creating a plan to spend your money. Its a tool to help you prioritize your spending and manage your money Planning and monitoring your budget will help you identify wasteful expenditures and achieve your financial goals

Classified as Capital or Revenue based on the nature of activitiesCapital budget relates to Capital nature of expenditure, ie., for construction/acquisition of assetRevenue budget relates to Revenue /Recurring nature of expenditure

REVENUE BUDGETDue date of RE/BE to Corporate Office 15th SeptemberRevised Estimate(RE) (for current financial year)- Actual expenditure upto August(5 months) and anticipated expenditure from September to March(7 months)Budget Estmate(BE) Anticipated Expenditure for the ensuing financial year(12 months)

Guidelines for preparationFigures should be in thousands of rupees in Working Expenses and lakhs of rupees in revenue income Should be object wiseShould be realisticAdditional Allotment if any should be shown separately

Economy measures for controlling the expenditure should be kept in mind while preparing the RE/BEEstimates of License Fees/Spectrum charges should be shown separatelyPension contribution and Leave salary contribution should be calculated as per provisions of FRs

No additional Fund for OTANo honorarium for general purpose. Honorarium only for setting up of question papers, valuation of answer papers, Membership verification duty, Departmental enquiries etc.

Revenue ReceiptsThe estimates of Revenue are worked out on the basis of number of telephone lines, WLL lines and CMTS working as well as proposed to be given and by applying average Revenue per such line.

Capital BudgetCircles have to send component wise demand of capital outlay is to be sent to Corporate Office Planning branch in the month of OctoberPlanning branches will consolidate the demand and send to Budget section for allotment of funds

Capital Works ProgrammeCapital works programme shall be compiled only for works costing Rs.20 crores and above The proposals for RE and BE have to be finalized in consultation with the Planning Cell of the Circle/Unit and closely scrutinized by the Internal Financial Advisor in order to ensure realistic provision of funds. IFA has to issue a certificate in this regard.

Cash Budget Two important tools used in financial planning and cash projections 1. Cash Flow Statement( based on historical/ past data)2. Cash Budget

Guidelines for cash drawal

Budget allotments are taken as base for determining of cash drawls Taking the trend of past recoveries, an amount equivalent to 60% of gross pay and allowances is taken as net pay and allowances for disbursement in cash

Expenditure under Working Expenses other than salaries and wages will be restricted to proportionate periodical allotment unless specified for unusual demand. Twelve Percent of telephone revenue realization based on targets communicated will be authorized for drawals towards service tax payment.

Authorisation under Payment of Loans and Advances including HBA will be restricted to budget allotment to each circle/unit.

Control over expenditure DDOs are not authorized to incur expenditure out of the revenue collected. Revenue collected is transferred to BSNL CO on day to day basis For operational purpose, cash is authorized by BSNL CO periodically

Economy Measures

10% CUT ON THE BUDGETARY ALLOCATION FOR SEMINARS AND CONFERENCES SHALL BE EFFECTED

Holding of exhibitions/seminars/conferences abroad is strongly discouraged except in the case of exhibitions for trade promotion.

Complete ban on holding of meetings and conferences at five star hotels.

No travel on government account by air will take place by first class. Travel by economy class only, irrespective of the entitlement.

Where travel is unavoidable, it will be ensured that officers of the appropriate level dealing with the subject are sponsored

The size of delegation and the duration of visit will be kept to the absolute minimum.

Proposals for participation in study tours, workshops/conferences/seminars/presentation of papers abroad at government cost will not be entertained except those that are fully funded by sponsoring agencies.

Expenditure Management 5-10% cut in Non-Plan Expenditure

No increase in the budgetary allocations under the heads of non plan expenditure, will be allowed at RE Stage , except under very extra-ordinary and compelling circumstances.

Fleet Card Program For cashless purchase of diesel/petrol from IOC/BPCL/HPCLEffected through smart card system( Xtra Power)W.e.f. 1.10.2009 Card fee Rs.100/- and validity three years from the date of issueMaster card with DDO and user card with concerned SDE/Unit for purchase of fuel

QuestionsFill in the blanks

1. There are mainly following two types of budget in BSNL: (a)__________________________________(b) ________________________________ (Capital Budget, Revenue Budget)

2. In REBE statement for Working Expenses, the figures should be shown in _________________ of rupees. (thousands)

3. Capital Works Programme shall be compiled only for works costing Rs. __________________ and above. (20 crs. And above)

4. Under economy measures, holding of exhibitions in abroad is strongly discouragd except in case of exhibition for ______________. (trade promotion)

5. As a part of expenditure control BSNL has introduced cash less purchase of __________________________ through Fleet Card. (petrol/diesel)

6. Fleet/Smart Card fee will be Rs. __________ per card and validity of the card is for _________ years from the date of issue. (100,3)

7. In REBE statement Revised Estimate is for ____________ financial year and Budget Estimate for _____________ financial year. (current, ensuing)

State True or False.

1. Cash Flow statement is based on historical (past) data. (True)

2. Budget allotment are taken as base for determining cash drawal. (True)

3. Drawing & Disbursing Officers (DDOs) are authorised to incure expenditure out of the revenue collected. (False)

4. Any cash payments made through Imprest/Temporary Advance towards purchase of fuel after 1-10-2009 are to be disallowed by DDOs (True)

5. Under Fleet card scheme, the Pay & Accounts Officer of each SSA will hold the master card & will arrrange to issue user card to their intending units. (True)

6. Planning for activities of a recurring nature is covered by Capital budget. (False)

Thank You