1. Day 6 – Session: 3 (b) Session Title : Preparation and usefulness of (i) “Accounts at a Glance” and (i) “Combined Finance and Revenue Accounts”

2. Session Overview In this session we will discuss about the usefulness of (i) “Accounts at a Glance” and (ii) “Combined Finance and Revenue Accounts”

3. Learning Objective By the end of the session, we will be enlightened with the usefulness of (i) “Accounts at a Glance” and (ii) “Combined Finance and Revenue Accounts”. The session will begin with discussion on preparation of each chapter of the ‘Accounts at a Glance’ and sources of data required for the preparation thereof. Thereafter, the usefulness of the “Combined Finance and Revenue Accounts” will be dealt with.

4. Part I – Accounts at a Glance

5. What is Accounts at a Glance ? ‘Accounts at a Glance’ is an important additional document to the Government from the C & A G, which provides a broad overview of Governmental activities, a macro analysis based on comparison between (i) the Financial Statement (Budget) of the Government and (ii) the Finance Accounts and Appropriation Accounts prepared and presented by the C & AG to the State Legislature.

6. Components of Accounts at a Glance The document is presented in 3 chapters: Chapter I : an overview on the principles of Government Accounting, Forms and Divisions in which the Government Accounts are maintained. It discloses the status of the presentation of Annual Accounts and Audit Reports to the Legislature. Data for various information are taken from the Chapter II – Highlights of Accounts.

7. Chapter II : projects the Highlights of Accounts. It is the main linkage and data provider for all other Chapters of the document. This Chapter brings out the following additional information also: (i) Revenue Disbursements, Capital Disbursements, Plan Disbursements and Non-Plan Disbursements. (ii) Sectoral distribution of expenditure and its percentage to total revenue expenditure. (iii) 5 years TREND OF EXPENDITURE of selected sectors. (iv) DEBTS AND LIABILITIES. (v) INVESTMENTS AND RETURNS. (vi) LOANS AND ADVANCES BY THE STATE GOVERNMENT. (vii) RUSH OF EXPENDITURE (viii) RECONCILIATION OF ACCOUNTS (ix) SUBMISSION OF ACCOUNTS BY TREASURIES

8. Chapter III : TRENDS IN GOVERNMENT REVENUE AND EXPENDITURE (5 years). This chapter further deals with : (i) LIABILITIES of the State Government (ii) STATE PROVIDENT FUND including interest. (iii) GUARANTEES given by the State Government. (iv) WAYS AND MEANS ADVANCES, GENERAL CASH BALANCES, and CONTINGENCY FUND

9. Part II - Combined Finance and Revenue Accounts

10. - An Overview Courtesy : Paper on “Overview of Combined Finance and Revenue Accounts (Union & the States)” by Shri M.C. Singhi, IES published in Indian Journal of Public Audit & Accountability, Institute of Public Auditors of India, New Delhi (April 2006 issue).

11. What is CFA? A user desired Annual Report showing the recognition of physical assets; actual liabilities on pension and ongoing programmes; tax expenditure; budgetary outcomes; measures of deficit; performance indicators and disaggregated information preferablyaccording to programme and region along with timeliness of their presentation.

12. Architecture of Governments Financial Information Flow Citizens Legislatures DonorsInternational Agencies Domestic Investors MediaSpecial Interests Groups Executive DepartmentsPlanning, Allocating and Raising of Resources Audit ReceiptsDisbursementsSurplus/ Deficit Fresh Liabilities AssetsDebt Stock Performance Indicators Economic and Social Well being FlowStockUse of resources Surrogate Performance Measure Broad architecture of government’s financial information

13. Balance Sheet of the Core Government The Liabilities of the government include its internal debt, external debt, small saving and provident funds, reserve funds and other deposits. The Assets of the government include its capital expenditure on creation of economic and social infrastructure and its loans & advances. Table (on next page) shows Assets & Liabilities and the Statement of Balances (as on 31 March 2000). It facilitates an analysis of assets & liabilities of the Union and States.

14. Assets and Liabilities and the Statement of Balances (Position as on 31 March 2000) (Rs. in crore) UnionStatesCombinedUnionStatesCombined Capital Expenditure General Services1041497899112048Internal Dept714254104956819210 Social Services93423663045972External Dept584370 Economic Services 199628201286400914Loans from CG0236212 Total313119245815558934Small Savings17221280523252735 Loans and AdvancesReserve Fund61951976925964 General Services26751605018725Others310455065081695 Social Services6821236513047Total Liabilities (Available Funds) 9821434921101474253 Economic Services 4970167103116804 State Governments 2145920 Total26765095518363168Other Receipts03386 Cash Balances2655-9741681Cumulative Resource Gap (Revenue Deficit) 398599141938540537 Investments11964276546 Total Assets583544346786930330Resource Use583544346786930330

15. Total Assets (Rs in Crore) Per Capita Assets (Rupees) Per Capita Assets Index (Percent) Ratio of Assets Liabilities (percent) Ratio of Assets to revenue receipt (ratio) Andhra Pradesh24545327094.2573.011.46 Bihar17058162746.9159.941.60 Delhi1450311068319.02279.813.39 Goa184614049404.9682.071.50 Gujarat245905018144.6475.501.76 Haryana84214141119.3567.881.46 Karnataka199413848110.9289.361.55 Kerala10654331495.5350.451.34 Madhya Pradesh18336231566.7371.951.39 Maharashtra457114848139.7384.841.81 Orissa12032333596.1359.442.04 Punjab136545724164.9954.601.83 Rajasthan199723669105.7566.672.04 Tamil Nadu13494219863.3646.580.83 Uttar Pradesh45366268577.3861.432.11 West Bengal18626236168.0542.621.82 Total and Per Capita Assets, ratio of Assets to Liabilities and Revenue Receipt (Inter-State variations)

16. Total Assets (Rs in Crore) Per Capita Assets (Rupees) Per Capita Assets Index (Percent) Ratio of Assets Liabilities (percent) Ratio of Assets to revenue receipt (ratio) Special Category States Pondicherry94810000288.23135.721.08 Arunachal Pradesh275925885746.10467.532.73 Assam7461286282.5192.611.54 Himachal Pradesh49678289238.9272.271.34 Jammu & Kashmir1020810368298.85113.581.85 Manipur264011479330.88164.132.47 Meghalaya20239105262.44180.932.14 Miziram156518113522.10149.051.82 Nagaland16919140263.46111.241.49 Sikkim116266623652.07160.370.77 Tripura26138222236.98140.381.82 All States3467863469100.0070.471.68 Total and Per Capita Assets, ratio of Assets to Liabilities and Revenue Receipt ( contd…)

17. Summary of Annual Accounts Shows the states ability to raise resources - both taxes and user charges from its various services, expenditure and cost of delivery of services, allocative priorities of its disbursement, revenue and fiscal deficit (or fiscal imbalances) and net annual increase in its liabilities, etc.

18. Revenue Receipts Revenue receipts of a government are composed of the receipts from the entities own taxes; receipts from entities’ sovereign functions, financial intermediation and user charges; devolution of taxes collected by the Union and transferred to the States and grants- in-aid.

19. Application of Resources – Revenue Expenditure The Union and the States raise resources to perform their sovereign functions, maintain their existing network of delivery of social and economic services, extend the network of these services through capital expenditure and investments and discharge their debt servicing obligations. Over 85% of the combined expenditure of the Union and States was in the nature of current or revenue expenditure, primarily to maintain the existing level of social economic services network and for their sovereign functions.

20. Total gross revenue expenditure of the Union and States as Rs.5763 billion in 1999-2000 as shown in the table below: UnionStatesCombined Organs of States158133374918 Fiscal Services297867579735 Financial Intermediation9459346379140971 Administrative Services93502362232972 Miscellaneous General Services384323906233 Pensions14286282255436840 Defence366320 Total General Services163263105039268301 Social Services1663895698112336 Economic Services10587754720160598 Grants in aid30459458835047 Total316237260045576282