All Public Undertakings are
dependant upon Finance . Hence , Foremost attention should be paid to treasury - Kautilya
Govt is FINANCE only - LORD
GEORGE.
Broadly
v can classify FINANCIAL ADMINISTRATION into two parts
1. Maintenance and Expenditure
2. Financial ADMINISTRATION +
Maintainence and DEVELOPMENT EXPENDITURE...
It
consists of the following parts
1. PLANING of PUBLIC EXPENDITURE and REVENUE (BUDGETING
-EXECUTIVE)
2.
MAKING FUNDS AVAILABLE FOR GOVERNMENTAL ACTIVIES (ROLE
OF LEGISLATURE)
3.
ENSURING and AUDIT)LAWFUL nd EFFICIENT EXPENDITURE nd
MONEY (Process of Accounting
Why
FINANCIAL ADMIN. is called a DYNAMIC PROCESS ?
It
is called as Dynamic Process because it includes -
- formation and
enactment of BUDGET
- legislation of
budget
- execution of
budget
- treasury
management
- rendering of
accounts of executive for Auditing
Evolution of BUdget
1250 AD . .... First Time in form of political document MAGNA
CARTA
1. No taxation without representation
2. Head of executive cannot suspend a law noted in Parliament
3. executive has no power to raise the tax without approval of
Parliament
What is a Budget...
in layman's language ....it is a annual statement of estimated
receipts and expenditure of Govt. in respective financial year
this very definition challenged by MOHIT BHATTACHARYA
1. this definition does not mention post , present ,as well as
future operations
2. der is no distinction between Act of Administration and Act of
Poitics
What are the objectives of Budget ???
1. ensures financial accountability of the executive with
that of legislature
2. ensures accountability of Subordinate to the Superior
3.ensures socio - eco policy and itzz implementation
4. acts as the instrument facilitating adminstrativ management and
unifies into a single plan
BUDGET ACTS AS A pOLITICAL inSTRUMENT
itzz not merely a technical instrument but it is a political instrument...!.
--that is a political document....
--it explains what the govt will nd what will do ?
--it refelcts the priorities on the basis of Group Demand and Sectoral Demands and Regional DEmand
--reflcts the relative properties of the deciosion made for local and constituency purpose.
--it provides a powerful tool for accountability to people
--it also refelects citizen preference for different forms of taxation nd different levels of society (influence of lobbies is also reflected here)
Harold Smith
* he says that in India in 1980s ,it became more like a political influenced bu the ideologies of the coalition era of politics
*Budget as a tool for the implementing electoral commitments e.g. Bharat NIrman , Comman Minimum Programme,etc
BUDGET ACTS AS A ECONOMIC inSTRUMENT
- basically budget consists of two components that is the revenues and the expenditures
- Government comes with the fiscal policy
- it provides for the packs and the previleges
- thru budgeting the public resources are used which can help implement public policies
- 'AARON WALDESKY' states that Budget is a set of goals having PRICE TAGS attached to it which means every Budget has financial implications results into impacting the economic progress overall.
BUDGET ACTS AS A SOCIAL inSTRUMENT
- taxation policy
in the Govt Budget aims at narrowing down the class distinctions and
social inequalities.
- those who earn
more pay more taxes while those who earn less pay less taxes
- in
- Budgeting system
in our society creates avenues for employemnt and dey r used for acheving
social schmes and programmes to remove poverty
- taxation policy
in the Govt Budget aims at narrowing down the class distinctions and
social inequalities.
Principles of BUDGET
- Clarity and Precision
- Integrity
- Publicity
- Accuracy
- Comprehensiveness
- UNITY
- Periodicity