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Under Standing  Terminology & Coding Pattern of Budet










What is..........?


Coding Pattern

What is..........?





Demand No.

 A two digit code allotted for Demand No. It represents Demands for the Department during the Budgeted Year. This number could be changed in next budget year if demand not continued for the next year.


Major Head

 A four digit code has been allotted to the Major Head, the digit indicating whether the Major Head is a Receipts Head or Revenue Expenditure Head or Capital Expenditure or Loan Head. If the first digit is ‘0’ or ‘1’ the Head of Account will represent Revenue Receipts, ‘2’ or ‘3’ will represent Revenue Expenditure, ‘4’ or ‘5’ – Capital Expenditure, ‘6’ or ‘7’ Loan Head (4000 for Capital Receipts) and ‘8’ will represent Contingency Fund and Public Account.

 Adding 2 to the first digit of the Revenue Receipt will give the number allotted to corresponding Revenue Expenditure Head, adding another 2 – the Capital Expenditure and another 2 – the Load Head of Account, for Example:

 0401-Receipt Head for crop husbandry

 2401-Revenue Expenditure Head for crop husbandry

 4401-Capital Outlay on crop husbandry

 6401-Loans for crop husbandry

*In a few cases, where Receipts/Expenditure is not heavy, certain Major Heads have been combined under a single number, the Major Head themselves forming Sub-Major Head under that number.


Sub-Major Head

 A two-digit code has been allotted, the code starting from ‘01’ under each Major Head. Where no Sub-Major Head exists it is allotted a code ‘00’. In budget books it appears in [ ] brasses.


Minor Heads

 These have been allotted a three-digit code, the codes starting from ‘001’ under each Sub-Major/Major Head. For example, Code ‘001’-always represents Direction and Administration. Non Standard Minor Heads have been allotted Codes from ‘101’ in the Revenue Expenditure series and ‘201’ in the Capital and Loan series. Code numbers from ‘900’ are always reserved for Deduct Receipts or Deduct Expenditure Heads. The Code for Other Expenditure is ‘800’. This has been done to ensure that the order in which the Minor Heads are codified is not disturbed when new Minor Heads are introduced. In budget books it appears in {} brasses.


Scheme No.

 A four digit, code allotted to Scheme No. This code is allotted by the Computer Section of Finance Department whenever a new Scheme is introduced in the budget. In budget books it appears in () brasses.


Segment Code

 A four digit, code allotted to Segment Code. A Segment Code is allotted only for the Plan Expenditure. First two digit, represent whether the Expenditure is State Plan Expenditure or Expenditure Funded by other Sources. Last two digit, represent whether the Expenditure for Normal Plan, Tribal Sub-Plan, Special Component Plan.

 01-Normal Plan.

 02-Tribal Sub Plan.

 03-Special Component Plan.


Development Head Code

 A five digit code allotted to Development Head. A Development Head is allotting for the Plan Expenditure. First two digits, represents the area of development rest three for sub-heads.


Object & Detail Code

 A two digits code allotted to Object code. It is the second lowest level entity of amount. It is further divided into detailed code. Detail code has three digits. In budget books Object code appear with ‘#’ symbol and detail codes with ‘-‘ symbol.


Understanding the Budget Terminology

Consolidated Fund

 Consolidated Fund of the State means the Fund into which the revenues received by the State Government, loans raised by that Government by the issue of Treasury Bills, Loans or Ways & Means Advances and money received by that Government in repayment of loans are credited, and from which the expenditure of that Government, when so authorized by the State Legislature is met.



Contingency Fund

Contingency Fund is the Fund established and mentioned under the provisions of Article 267(2) of the Constitution of India and is intended to enable advances being made there from for the purpose of meeting unforeseen expenditure pending authorization of such expenditure by the Legislature under Article 205 and 206 of the Constitution of India.



Public Account

 Public Account of the State means the Account into which all moneys other than those pertaining to the “Consolidated Fund of the State” received by or on behalf of the State Government are credited, e.g., State Provident Funds, Sinking Funds, Reserve Funds, Deposits and Remittances, etc., and from which disbursements are made in accordance with the prescribed rules.



Revenue Expenditure

 Revenue Expenditure should bear all subsequent charges for maintenance and all working expenses. These embrace all expenditure on the working and upkeep of the project and also on such renewals and replacements and such additions, improvements or extensions as under rules made by Government are debitable to the Revenue Expenditure Account.



Capital Expenditure

 Expenditure of a Capital nature shall broadly be defined as expenditure incurred with the object of either increasing concrete assests of a material and permanent character or of extinguishing or reducing recurring liabilities.

 Capital Expenditure should bear all charges for the first construction and equipment of a project as well as charges for intermediate maintenance of the work while not opened for service. It should also bear charges for such further additions, and improvements as may be sanctioned under rules made by competent autority.

 Expenditure by Government on Graint-in-aid to local bodies or institutions for the purpose of creating assest which will belongs to these local bodies or institutions cannot legitimately be considered as Capital Expenditure.



Recurring Expenditure

 Recurring expenditure means all expenditure which is not non-recurring.


Non Recurring Expenditure

 Non-recurring expenditure means expenditure sanctioned as a lump sum charge, whether the money be paid as a lump sum or by instalments.



 Grants are of two kinds (1) Conditional, and (2) Unconditioanl. A Grant is conditional when is is given for a specific purpose and special conditions are imposed at the time of the grant, regulating the manner in which the grant may be expended.

 A Grant is unconditional when no conditions are attached to be utilisation of the grant in the form of specifiecation of the particular objects of expenditure or the time within the money must be spent or otherwise. The sanction necessary for payment of grants-in-aid.


New Schemes

 The expression New Services/New Items occurs in Article 115(1)(a) and 205(1)(a) of the Constitution of India. According to the established practice, the expenditure arising out of a new policy decision (not brought to the Legislature's notice earlier) including a new activity or form of investment shall be regarded as an item of New Services/New Items. The Finance Department has issued detailed instructions in this regard. Copies thereof are appended.


Plan Expenditure

All expenditure which has been expressly classified as plan expenditure and which is covered by the plan ceiling fixed for the departments.

Non Plan Expenditure

All expenditure which has not been expressly classified as plan expenditure and which is not covered by the plan ceiling fixed for the departments is Non Plan Expenditure.

Voted Expenditure

Voted Expenditure means expenditure which is subject to the vote of the Assembly.


Charged Expenditure

Charged Expenditure means such expenditure as is not subject to the vote of the Legislature and is declared to be charged on the Consolidated Fund of Madhya Pradesh under Article 202(3) of the Constitution of India.


Supplementry Grant

Supplementary Grant means a grant voted by Legislature during the course of the year to which it relates and in addition to a grant  voted previously in respect of the same year and for the same item of service.



 Appropriation means the assignment to meet specified expenditure of funds at the disposal of the assigning authority.

Primary Unit of Appropriation - Primary unit of appropriation is the lowest accounting unit for the purpose of appropriation accounts under Major Head.

Appropriation Accounts - Appropriation Accounts mean the accounts prepared by the Comptroller and Auditor General of India for each Grant and charged appropriation in which is indicated the amount of each grant and charged provision included in the Appropriation Acts relating to that financial year and the amount spent under each sub head and on the grant as a whole. Important variations in the expenditure and sanctioned grant/appropriation are explained herein both with reference to the original grant and the final grant under each unit of appropriation.

Note:- It is intended to cover all the charges including the liabilities of past years to be paid during a financial year or to be adjusted in the accounts of that year. It is operative until the close of that year. Any unspent balance lapses and is not available for utilisation in the following years.


 Reappropriation means transfer of funds from one unit of appropriation to another scuh unit or from one standard object of expenditure to another such object of expenditure.


Controlling Officer

 Controlling Officer means a head of a department, or other Departmental Officer who is entrusted with the responsibility of controlling the incurring of expenditure and/or the collection of revenue by the authorities subordinate to the department.


Disbursing Officer

 Disbursing Officer means a Government servant who draws money from the treasury on bills or cheques, but excludes a Government servant who is not the head of an office and draws only his own pay and allowances finance from treasury.

 Revised Estimates

Revised Estimates are the estimates of probable revenue or expenditure of a financial year under the various major and minor heads and their primary units of appropriation framed in the course of the year on the basis of actual transactions till then recorded and in the light of the facts which may be known as regards the remainder of the year. A Revised Estimate is in no way a provision for expenditure, and an entry in it carries with it no authority for expenditure of any kind. Revised Estimates are not budgets nor appropriation of money, nor do they supersede the budget estimates as the basis for regulation of expenditure. The inclusion of increased expenditure in the revised expenditure does not aboviate the necessity for applying for an additional appropriation nor are Revised Estimates the proper channel for such applications. Similarly, the Revised Estimates do not obviate the necessity for formal surrenders of sums unlikely to be spent.

Technical Sanction

Technical Sanction means the sanction of the competent authority to a properly detailed estimate of the cost of a work. As its name indicates, it amounts to no more than a guarantee that the proposals are structurally sound and that the estimates are calculated and based on adequate data.

Token Demand

Token Demand is a demand made to the Legislative Assembly for a nominal sum either to secure advance approval of Legislative Assembly to the incurring of expenditure on a scheme, details of which are yet to be finalised or to bring new expenditure to the notice of Legislative Assembly when funds to meet it are available by re-appropriation within the grant.

Performance Budgeting

A performance budget is one which presents the purposes and objectives of a department, the cost of the programmes proposed for achieving these objectivies and qantitatives data measuring the accomplishments and works performed under each programme.

Accounts or Actuals

Accounts or Actuals of a year are the amounts of receipts or disbursements for the year begining from April 1 and ending on March 31 following as finally recorded in the Accountant General's Books.

Administrative Approval

This term denotes the formal acceptance by the administrative department concerned of the proposals for incurring any expenditure of a work initiated by, or connected with, the requirements of such administraive department. It is, in fact, an order to execute certain specified works at a stated sum to meet the administrative needs of the department requiring the work but is subject to allotment of funds.

Centrally Sponsored Schemes

The Schemes sponsored by the Central Government and financed wholly or in part by the Central Government are known as Centrally Sponsored Schemes. These are shown distinctly in the Budget Estimates.

Excess Appropriation/Grant

The terms refer respectively to appropriation authorised, and grants voted to meet expenditure which at the close of the year is found, through the Appropriation Accounts, to have been incurred in excess of the authorised appropriation/grant.

Zero Base Budgeting

In view of the increasing requirements for finding resources for the development of the State and in the context of severe constraints:

(a) the procedures for the scrutiny of expenditure proposals should be subjected to the discipline of cost effectiveness analysis, and

(b) the Zero Base Budgeting be introduced which requires the expenditure even on the on-going activities to be justified.

Zero Base Budgeting requires indentification and sharpening of objectivies, examination of various alternatives of achieving these objectives; selecting best alternatives through cost benefit and cost effectiveness analysis; priortisation of objectives and programmes; switching of resources from programmes with lower priority to those which higher priority; and identification and elimination of programmes which have out-lived their utility. Zero Base Budget provide a more logical basis for effecting them as compared to adhoc and across the board cuts.