GOVERNMENT OF HARYANA

ECONOMIC AND FUNCTIONAL CLASSIFICATION OF THE BUDGETS OF MUNICIPAL COMMITTEES/ COUNCILS/ CORPORATION IN HARYANA- 2009-2010

ISSUED BY: DEPARTMENT OF ECONOMIC AND STATISTICAL ANALYSIS HARYANA

Publication No.
Website- esaharyana.gov.in

GOVERNMENT OF HARYANA

ECONOMIC AND FUNCTIONAL CLASSIFICATION OF THE BUDGETS OF MUNICIPAL COMMITTEES/COUNCILS/CORPORATION IN HARYANA- 2009-2010

ISSUED BY: DEPARTMENT OF ECONOMIC AND STATISTICAL ANALYSIS HARYANA

PREFACE
Economic and Functional Classification of the Budgets of Municipal Committees/Councils/Corporation in Haryana is an attempt to recast the State Municipal transactions in order to assess the economic and functional significance of these transactions. Economic Classification groups together the items of receipts and expenditure by their economic character such as consumption expenditure, capital formation, transfer payments etc. whereas the Functional Classification groups them according to the particular purpose or function they perform such as education, medical and public health, economic services etc. The present report covers the classification of Municipal Budgets for the years 2007 -2008, 2008-2009 and 20092010. The main findings of the report are given in chapter-III of this report. It is hoped that the analysis presented herein will be found useful by the administrators, planners and research scholars engaged in the study of Municipal Budgets. This report has been prepared by Shri Sandeep Grewal, Research Officer with the assistance of Sh.Ramkumar Assistant Research Officer and Mr. Gautam Singh Saini Stenographer. R.K. Bishnoi Director, Deptt. of Economic & Statistical Analysis Haryana.

Panchkula ,2011

Chapter Page(s) I II III Introduction Set of Accounts –Economic Classification Main Findings-Economic Classification Notes on the Accounts.CONTENTS Sr.No. their Derivation and Rational Reconciliation: Income and Expenditure Principles of Functional Classification Functional Classification Scheme Notes on Functional Categories Graph --------------- 1 2-8 9-15 16-19 20-21 22-29 30-31 32-33 34 IV V VI VII VIII IX .

from the study of budget documents (G-1 Form). Thus.. economic services etc. it is not possible to have a clear idea of consumption expenditure. The present study covers the budgets of 2 Municipal Corporation.1 CHAPTER-1 INTRODUCTION The budget of a municipal committee/council/corporation presents detailed information about its revenue and expenditure and other financial transactions during the financial year in terms of various departments and purposes but it does not clearly explain the economic significance of various items of revenue and expenditure as these items are not recorded separately therein. Besides. as they are. Therefore. current receipts etc. “Economic and Functional Classification of the Budgets of Municipal Committees/Councils/Corporation – 2009-2010” an attempt has been made to bring together the details of significant heads under various accounts. required to be reclassified and regrouped into meaningful economic categories for understanding the real economic impact of the budgetary transactions of a municipal committee/ council/ corporation.2010. of a municipal committee/ council/corporation. capital formation. medical and public health. viz. the items of revenue and expenditure of Municipal Committees/Councils/Corporation have also been reclassified and regrouped according to particular purpose of function they perform such as education. The two types of classification are integrated into “Economic-cum-Functional Classification” and services are split horizontally into economic categories and vertically into functional categories. The accounts shown in the budget are. ………………… . therefore. 23 Municipal Councils and 53 Municipal Committees that existed in Haryana upto on February. in the present brochure.

Account-II Transactions in Commodities and Services and Transfers: Current Account of Departmental Commercial Undertakings of Municipal Committees/ Councils/Corporation. Account-IV Changes in Financial Assets and Liabilities: Capital Account of Municipal Committees/Councils/Corporation. Account-V Cash and Capital Reconciliation Account of Municipal Committees/Councils/Corporation. . Account-III Transactions in Commodities and Services and Transfers: Capital Account of Administrative Departments and Departmental Commercial Undertakings of Municipal Committees/Councils/ Corporation.2 CHAPTER-II THE SET OF ACCOUNTS The following five accounts containing the reclassified data of all the Municipal Committees/Councils/Corporation in Haryana for the years 2007-2008. 2008-2009 and 2009-2010 are presented in this chapter:Account-I Transactions in Commodities and Services and Transfers: Current Account of Administrative Departments of Municipal Committees/ Councils/Corporation.

2 Taxes on Commodities & Services 3959 2200 4952 (c) Less Sale of Commodities 2045 1098 2011 (a) Octroi 18 11 2. Transfer Payments 112 200 1320 (b) Water Tax 2.1Taxes on Income 11 21 196 1.1 Interest 110 191 1108 (c) Terminal Tax 243 230 271 2. in Lakhs) Sr. Consumption Expenditure 31319 30128 36533 4.1 Wages & Salaries 16372 18021 27000 4. 635 596 1025 341 635 Licence Fees and for Letting off Fire Works (i) Tolls on Vehicles & Animals 21 43 6 21 .3 Other Current Transfers (e) Taxes on Animals (including 51 33 17 Fee for registration of do 3. Savings on Current Account 10791 28624 47493 (f) Fee for Vehicle Licences 247 561 346 (g) Licence Fee for Job Porters 87 (h) Dangerous & Offensive Trade.2 Net Purchase of 14947 12107 9533 (a) Profession or Trade Tax 11 21 113 Commodities & Services (a) Purchase of Commodities 5094 5050 5418 (b) Servant Tax 83 (b) Servant Tax (b) Repairs and Maintenance 11898 8155 6126 4.Tax Revenue@ 20364 21500 14758 1. Expenditure 2007-08 2008-09 2009-10 Sr.2 Grants 2 9 212 (d) Taxes on Vehicles 704 700 770 2. Revenue 2007-08 2008-09 2009-10 No. No 1 2 3 4 5 6 7 8 9 10 1.3 ACCOUNT-I Transactions in Commodities and Services and Transfers: Current Account of Administrative Departments of Municipal Committees/ Councils/Corporation in Haryana (Rs.

.(j) Local Rate 4 1 2 3 4 5 6 7 (k) Income from Public Safety and Convenience 4. Revenue Grants and Contributions 7. Other Income from (a) Profit Transferred from Departmental Commercial Undertakings (Account-II) (b) Income from Investment (c) Interest Receipts 8.3 Taxes on Properties & Capital Transactions (a) Taxes on Buildings and Land (b)Income from Municipal Properties 5. Administrative Receipts 6. Miscellaneous Receipts Total - - - 8 2040 16394 8310 8084 112 4987 593 (-)416 20 989 16166 42222 9 1102 19279 6914 12365 98 9059 614 (-)333 205 742 27681 58952 10 419 11621 5937 5684 125 46892 1748 (-)441 689 1500 21823 85346 Total 42222 58952 85346 @ Includes income from municipal properties.

7 2007-08 8 981 981 2008-09 9 1160 1160 2009-10 10 1385 1385 6. (Rs. Expenditure No. 6 Revenue No. Interest (Sale of water) 5. Repairs & Maintenance 4. Profit Transferred to Current Account Total 2007-08 3 1371 7 18 1 (-)416 981 2008-09 2009-10 4 1483 5 1 4 (-)333 1160 5 1558 132 134 2 (-)441 1385 Sr. Commodities & Services 3. Wages and Salaries 2.5 ACCOUNT-II Transactions in Commodities and Services and Transfers: Current Account of Departmental Commercial Undertakings of Municipal Committees /Councils /Corporation in Haryana. in Lakhs) Sr. 1 2 1.Gross Sale Proceeds a)Electricity b)Transpor c) Water Supply Total 981 1160 1385 .

No. 9074 11579 8637 Contributions & Recoveries B Departmental Commercial 3690 4878 2642 6. . Administrative Departments 14068 24166 29491 Account 1.2 Machinery & Equipment 365 293 400 6. Capital Formation 17758 29044 32133 5. Revenue 2007-08 2008-09 2009-10 No.1 Capital Grants.1 Buildings & Other 13703 23873 29091 6. Increase in Inventories 1891 1971 6761 (Suspense Account) 3. Capital Transfers 10658 13919 10791 Construction 1. Disbursement 2007-08 2008-09 2009-10 Sr. Savings on Current 10791 28624 47493 A. 1 2 3 4 5 6 7 8 9 10 1.1 Buildings and Other 3689 4877 2624 Construction 1. Balance: Surplus/Deficit on 1800 11528 19390 all Transactions in Commodities and Transfers.2 Machinery and Equipment 1 1 18 2.2 Suspense Account 1584 2340 2154 Undertakings 1.6 ACCOUNT-III Transactions in Commodities and Services and Transfers: Capital Account of Administrative Departments and Departmental Commercial Undertakings of Municipal Committees/Councils/Corporation in Haryana (Rs. Capital Transfers 4. in Lakhs) Sr.

No.Total 21449 42543 58284 7 Total 21449 42543 58284 ACCOUNT-IV Changes in Financial Assets and Liabilities: Capital Account of Municipal Committees/Councils/Corporation in Haryana Sr.No. 5 938 116 (-) 847 6 Incomings 2007-08 2008-09 9 2753 (Rs. Loans and 605 Advances 605 2753 207 Total 605 2753 207 . Outgoings 1 1.in Lakhs) 2009-10 10 207 7 8 4. 2 Repayment of Loan and Advances Unearmarked Investment Balance: Net Increase in Financial Assets and Liabilities Total 2007-08 2008-09 3 39 164 4022 4 172 97 494 2009-10 Sr. 3. 2.

Surplus in al 1800 11528 19390 Balance Transactions in Commodities & Services and Transfers (Balancing Item of Account-III) 2. Net Increase in Financial Assets/ Liabilities (Balancing Item of Account-IV) 14012 18543 Total 402 2484 (-)847 Total 2202 2202 14012 18543 . No. in Lakhs) Sr. Increase in Cash 2202 14012 18543 1. 1 2 3 4 5 6 7 8 9 10 1. Outgoings 2007-08 2008-09 2009-10 Sr.8 ACCOUNT-V Cash and Capital Reconciliation Account of Municipal Committees/Councils/Corporation in Haryana (Rs. Incomings 2007-08 2008-09 2009-10 No.

00) (100.The municipal committees/councils/corporation incurred expenditure mainly on wages and salaries of municipal staff.40) (0.69) (3. III) 3.1.44) (1. The allocation by types of expenditure is given in table-3.The total expenditure (as per economic classification) of the municipal committees/councils/corporation in Haryana (excluding operating expenses of Departmental Commercial Undertakings) was Rs. 77801 lakhs during 2009-10 as compared to Rs. pavement and maintenance of streets and drainage works. construction of roads.08) (48.61612 lakhs during 2008-09 and Rs.90) (48.22) (0.62) (47.1 of Account-I)) (61.70) b) Capital Transfer (Vide item –3 of Account No. Transfer Payments to the rest of 112 200 1320 the Economy (0. Item 2007-08 2008-09 2009-10 No.32) (1.95) a) Consumption Expenditure 31319 30128 36533 (Vide item. (Accounts) (Account) (Account) 1 2 3 4 5 1.32) (1.14) (42. 51283 lakhs during 2007-08 registering an increase of 26. Table 3. in Lakhs) Sr.60) c) Suspense Account 1891 1971 6761 (vide item-2 of Account-III) (3.00) (100. Final Outlays 50968 61143 75427 (99.44) b) Capital Formation 17758 29044 32133 (Vide item-1 of Account-III) (34.20) (8. Financial Investment and Loans 203 269 1054 to the rest of the Economy (0.14percent in 2008-09 over 2007-08. .24) (96.96) 2.1: Total Expenditure by Municipal Committees/Councils/Corporation (Rs.70) a) Current Transfer 112 200 1320 (Vide item-2 of Account No.21) (0.88 percent in 2009-10 over 2008-09 whereas it increased by 20.35) (Vide item 1 & 2 of Account-IV) *Total Expenditure (as per economic 51283 61612 77801 Classification) (100.39) (99. 1) (0.00) * Exclusive of operating expenses of departmental commercial undertakings.9 CHAPTER-III MAIN FINDINGS The main findings emerging from the economic classification of municipal budgets are depicted below:Total Expenditure as per Economic Classification :.

1(b) Capital Formation: The expenditure incurred on capital formation during 2009-10 formed 42. 96. 3.30128 lakhs or 48.08 percent during 2007-08. 2374 lakhs forming 3.62 percent during 2007-2008. 469 lakhs (0.1(a) Final Outlays:-Final outlays represent direct demand for consumption expenditure. 36533 lakhs or 48. capital formation etc.10 3.75427 lakhs incurred during the year 2009-10.31319 lakhs or 61. 3.61 percent). Rs.90 percent during 2008-09 and Rs. and advances to the rest of the economy.60 percent of the total expenditure as against 37.14 per cent during 2008-2009 and 34.95 percent in 2009-10 as against 99.e.64 percent 2009-10 over 2008-09 where as an increased of 63. Of the final outlay of Rs.44 percent constituted consumption expenditure as against Rs.05 per cent of the total expenditure in 2009-10 represents transfer payments on current and capital accounts. Financial Investments and Loans The expenditure of Rs. The corresponding figure for 2008-2009 was Rs.55 percent in 2008-09 over . Final outlays constitute the major expenditure i.76 percent) and for 2007-2008 increase by 10. financial investment and loans was Rs. Capital formation was to the tune of Rs.39 percent in 2007-08. of the Municipal Committees/Councils/Corporation.315 lakhs (0. 29044 lakhs in 2008-2009 showing an 2007-08. 32133 lakhs in 200910 as compared to Rs.1( c) Transfer Payments.24 percent in 2008-09 and 99.

1 1. Table-3. 2008-2009 and 2007-2008 were 41.2 Total Financial Assistance for Capital Formation Sr. The percentage of total outlay for capital formation to the total expenditure during the years 2009-2010. in lakhs) Sr. the assistance was also provided to the rest of the economy for capital formation.3.55 respectively.2. 29141 lakhs in 2008-2009 and Rs.The details of amount spent for this purpose for the years under review are given in table-3.3: Capital Formation Out of Budgetary Resources of the Municipal Committees/Councils/Corporation. Table 3. Capital Formation by the Municipal 17758 29044 32133 Committees/Councils/Corporation (Vide item 1 of Account-III) 2. by showing an increase by 10.67 percent in 2009-2010 over2008-2009 and 64.30 and 34.3 Capital Formation Out of Budgetary Resources The details of total investment for capital 2008-09 4 97 97 (Rs. in Lakhs) 2009-10 5 116 116 formation by Municipal Committees/Councils/Corporation out of budgetary resources are indicated in table-3. Rs. (Rs.43 per cent in 2008-2009 over 2007-2008. 47.45.11 3. 2. Item 2007-08 2 3 Loans for Capital Formation Unearmarked Investments 164 (Vide item 2 of Account –IV) Total Financial Assistance 164 for Capital Formation111 3.No Item 2007-08 2008-09 2009-10 1 2 3 4 5 1. 17722 lakhs in 2007-2008.2 Financial Assistance for Capital Formation In addition to the capital formation directly undertaken. 32249 lakhs in 2009-2010. . Finance Investment /Unearmarked 164 97 116 Investment for Capital Formation to the rest of economy (Vide item 2 of Account-IV) Total Capital Formation out of the 17722 29141 32249 Budgetary Resources of Municipal Committees/Councils/Corporation The above table depicts that the total outlay provided for Capital Formation by Municipal Committees/Councils/Corporation out of their budgetary resources was Rs.

The total current revenue of Municipal Committees/Councils/ Corporation in Haryana was Rs. 85346 lakhs in 2009-2010 as against Rs. 42222 lakhs during 2007-2008. Miscellaneous Receipts (Vide item 8 of Account-I) 4.47) (17.94) 125 (0. Other Income 593 614 1748 (Vide item 7 of Account-I) (1. Out of total revenue of Rs. Revenue Grants and Contributions (Vide item 6 of Account-I) 5.The revenue increased by 44.17) 42222 58952 (100.29) 2.00) (100. Administrative Receipts (Vide item 5 of Account-I) Total* * 16166 (38.37) 21823 (25.12 3. For proper assessment of economic implications of municipal expenditure. Item 2007-2008 2008-09 2009-10 1 2 3 4 5 1.23) (36.04) (2.95) 9059 (15. Rs 14758 lakhs (17.in Lakhs) Sr. The corresponding percentages for .62 percent during 2008-2009 over 2007-2008.4 Current Receipts: In assessing the economic implications of municipal expenditure.40) (1. 2009-10. The State Govt.15) 85346 (100.05) 3.27) (0.85346 lakhs in 2008-2009 and 2007-2008 were 36.4. it is necessary to examine the resources from which they are financed.29 percent) was from tax revenue.77 percent during 2009-2010 over 2008-2009 whereas it increased by 39. The municipal committees/ councils/ corporation derive income mainly from taxes on buildings and land and income from municipal properties.47 and 48.57) 46892 (54.81) 27681 (46. also gives grants and loans to municipal committees/ councils/corporation for development works and for salary of the municipal staff.No. 58952 lakhs in 2008-2009 and Rs. Table 3.29) 4987 (11.23 respectively.4 Current Receipts of Municipal Committees/Councils/Corporation (Rs. Tax Revenue (vide item 4 of Account-I) 20364 21500 14758 (48. their sources of income have been grouped under significant economic heads in table-3.00) excluding receipts from departmental commercial undertakings.00) 112 98 (0.

This shows an decrease by 3. 99. .31431 lakhs during the year 2007-2008.51) 112 200 1320 (0.64) (99. 0.36 percent. Item 2007-08 2008-09 2009-10 1 2 3 4 5 1. The details are given in the following table No. Consumption Expenditure (Vide item 1 of Account –1) 2. 30328.66 percent and 3.3. Transfer Payments (Vide item 2 of Account-1) Total Current Outgoings* • 31319 30128 36533 (99.34) (96.34 percent and 96.49 percent respectively.5 Current Outgoings:The Current Outgoings which Consists of Consumption Expenditure and Transfer Payments were Rs.5:Table 3.00) (100.lakhs during 2008-2009 and Rs.81 percent during 2009-2010 over 2008-2009.00) excluding operating expenses of departmental commercial undertakings. Consumption Expenditure constitutes the major portion of the Current outgoings. in Lakhs) Sr.51 percent respectively during the above periods whereas the contribution of Transfer Payments to total Current Outgoings during the above periods were only 0. Its contribution to total Current Outgoing were 99.49) 31431 30328 37853 (100. 37853 lakhs during 2009-2010.36) (0.64 percent.66) (3.5:Current Outgoings of Municipal Committees/Councils/Corporation (Rs.No.13 3.51 percent during 2008-2009 over 2007-2008 and an increase of 24. Rs.00) (100.

3 of Account-1V) Surplus/Deficit Denoting Total 2202 Requirements of Finance (1+2) 2008-09 4 11528 2494 14022 2009-10 5 19390 (-)847 18543 3 10791 17758 4 28624 29044 5 47493 32133 (-) 6967 (-) 420 15360 . Investment/Capital Formation by the Municipal Committees/ Councils/Corporation (Vide item 1 of Account-III) Income Surplus/Deficit of the Municipal Committees/Councils/Corporations (1-2) 3. Item 2007-08 1 2 3 1. in Lakhs) Sr.No. Net Increase in Financial Assets 402 (Vide balancing item No. Savings by the Municipal Committees/ Councils/Corporation (Vide item 3 of Account-1) 2.No.4 of Account -III) 2.14 3. Surplus on all Transactions on 1800 Commodities and Services and Transfer (Vide balancing item No. the surplus of municipal current receipts over municipal current expenditure.6(b) Other Surplus/Deficit:The other surplus/deficit on income account as indicated in the balancing items of account-III and IV forms the overall surplus/deficit which denotes the total requirements of finance over and above the savings affected by the Municipal Committees/Councils/Corporation. The overall financial position of Municipal Committees/Councils/Corporation are given in table-3. 3.6(a) Income Surplus/Deficit: The income surplus/deficit of Municipal Committees/Councils/ Corporation is measured by the excess of investment over net saving and is shown in table-3. (Rs. Table 3. Item 2007-08 2008-09 2009-10 1 2 1. in Lakhs) Sr.6(b): Total Requirement of Finance for the Municipal Committees/ Councils/Corporation.6(a).6(b). (Rs.6(a): Income Surplus/Deficit of the Municipal Committees/Councils/ Corporation.6 Gross Savings: Gross savings comprise savings of the municipal administration i.e. Table 3.

2 Gross Receipts (Vide item 6 of Account-II) Operating Expenses (Vide item 1.7: Net Profit of Departmental Commercial Undertakings of Municipal Committees/Councils/Corporation (Rs. 2.No.7 Net Profit of Departmental Commercial Undertakings: The net profit of departmental Commercial Undertakings i. 3 and 4 of Account-II) Net Profit (1-2) 3 981 1397 (-) 416 4 1160 1493 (-) 333 5 1385 1826 (-) 441 . This is taken as profit and taken to current account of Municipal Committees/Councils/Corporation and add to their savings. in Lakhs) Sr.15 3. the excess of gross receipts over operating expenses exhibits the financial result of the working of these undertakings. Item 2007-08 2008-09 2009-10 1 1. The derivations of the net profit is shown in a table given below:Table 3.e. 2.

office supplies. The final outlays are made up of purchases of commodities and services and wages and salaries payments. The current expenditure of administrative departments consist of the final outlays of Municipal Committees/Councils/Corporation on current account which represents consumption. miscellaneous receipts accuring during the course of administration. travelling and daily allowances.e.2 Commodities and Services:. prizes etc. To meet the current expenditure. scholarships. taxes and rent . contributions and recoveries from the State Government and others. Municipal Committees/Councils/Corporation appropriate a part of the income of the community through a variety of taxes. telephone and telegraph charges. All departments other than those listed under Account-II in the chapter are considered as administrative for the purpose of this classification.This item includes all expenditure under contingency. In addition. THEIR DERIVATION AND RATIONAL Account 1: Transactions in Commodities and Services and Transfers : Current Account of Municipal Committees/Councils/Corporation : This account deals with the current revenue and expenditure of all the Municipal Committees/Councils/Corporation in the State. expenditure on repairs and maintenance. Besides final outlays. i. Municipal Committees/Councils/Corporation make transfer payments. grants.16 CHAPTER-IV NOTES ON THE ACCOUNTS. The Municipal Committees/Councils/Corporation also receive revenue grants. Some of the items included in this Account are explained as below:Item 1. to the rest of the economy which add indirectly to the disposable income of the community. Item 1. printing.This item including pay of the establishments (other than travelling and daily allowances) other allowances and honorarium and 50 percent of the expenditure incurred on un-classified miscellaneous heads. fuel and light. Municipal Committees/Councils/Corporation have an investment income from property and enterpreneurship. The excess of the current receipts over current expenditure denote the savings of the Municipal Committees/Councils/ Corporation is available for capital formation.1 wages and Salaries :. Wages and Salaries also include contributions to provident funds.

Item No. Item No.This item includes fines and penalties. however. They exclude. taxes on vehicles and animals and income under the head of public safety and convenience which include lighting. Taxes on income include tax on profession or trade. i. fire. 50 per cent lump-sum miscellaneous unclassified charges and other items for current operation. Item No. 4 Tax Revenue: This is classified into taxes on income. medical. contributions from the State Government for the purpose for administration. stipends. prizes and awards etc. Item No. scholarships. Item No. Taxes on commodities and services consist of octroi. dak bungalows. machinery and equipment. Contributions and Recoveries:.These are current receipts accruing from the State Government and various Committees and Boards. 8 Miscellaneous Receipts:. 7 Income from Property and Enterpreneurship:. Taxes on properties and capital transactions comprise taxes on buildings. taxes on commodities and services and taxes on properties. surplus of current receipts over current expenditure.of hired buildings. land and income from municipal properties (rent of land and buildings. public health. copying fees etc.e. terminal tax. gardens.Transfer payments include grants. . interest and dividend accruing to them from the ownership of buildings or financial assets. birth and death registration fees. fee for services of fire brigade etc.This record the income receivable by the Municipal Committees/Councils/Corporation from Departmental Commercial Undertakings as well as the net rent.2Transfer Payments:. 3 Savings on Current Account: The balancing item on the Current Account of the Municipal Committees/Councils/Corporation represent the saving of this sector. 6: Revenue Grants. 5 Administrative Receipts:. water supply and veterinary). Item No.These comprise of all kinds of receipts from administrative services (education. and capital transactions. 17 Item No. road side trees and tehbazari fees). water tax.

contributions and recoveries received by the Municipal Committees/ Councils/Corporation constitute the source of finance for all expenditure recorded in this Account. The difference between savings and capital formation and suspense account is often used in economic analysis as a measure of budgetary deficit. Account –III Transactions in Commodities and Services and Transfers: Capital Account of Administrative Departments and Departmental Commercial Undertakings of Municipal Committees/ Councils/ Corporation : This Account is concerned with the total capital outlay representing physical assets and capital formation by the Administrative Departments and Commercial Undertakings of the Municipal Committees/ Councils/Corporation. transport and water supply have been classified as Departmental Commercial Undertakings. repairs and maintenance. Repairs and maintenance expenditure is shown separately because of the importance of such expenditure of the efficient working of commercial enterprises. In this study electricity. The savings transferred from Account I and capital grants. The surplus/deficit which ia shown as balancing item in Account-III alongwith net increase in financial assets and liabilities in Account-IV gives the total requirements of finances of the Municipal Committees/ Councils/Corporation. . The essential characteristics distinguishing these departments from other administrative departments are that they charge for what they provide according to use and are thus able to meet a part or most of their costs from their sale proceeds. interest. The expenditure side of the Departmental Commercial Undertakings spell out the current expenditure into wages and salaries.18 Account. provision for depreciation and profit which is transferred to Administrative Departments. commodities and services.II : Transactions in Commodities and Services and Transfers: Current Account of Departmental Commercial Undertakings of Municipal Committees/Councils/Corporation : The Departmental Commercial Undertakings briefly be defined as agencies producing goods and services that are not provided free of charge.

2 Machinery and Equipment: Machinery and Equipment include expenditure incurred on the purchase of tools and plants by the Municipal Committees/ Councils/ Corporation of the State.1 Buildings and Other Constructions:. As stated earlier. .19 Item 1.This item includes all expenditure on works of buildings and reservoirs. Receipts on Capital Account:. Account-V: Cash and Capital Reconciliation Account of Municipal Committees/ Councils/Corporation in the State This Account sums up the net position in respect of Account-III and IV showing the effect of all transactions of the Municipal Committees/ Councils/ Corporation in the State on its cash position. This account which shows the changes in the financial assets and liabilities of the Municipal Committees/Councils/Corporation in the State is concerned with transactions in financial investment and repayment of loans and advances. Item 1.This item represents increase or decrease in work stores and stock of goods etc. construction of roads and pavement of streets. Account-IV: Changes in Financial Assets and Liabilities: Capital Account of Municipal Committees/Councils/Corporation in the State. Suspense Account is included under the head ‘ Work Stores’ .Receipts available for capital formation consists of gross savings on Current Account brought over from Account-I and capital grants. Account-III gives the net position in respect of all the transactions in commodities and services and transfers while Account-IV brings out the net position in respect of financial assets and liabilities. The balancing item of this Account representing net financial assets and liabilities when added to the deficit in Account-III which gives the total requirements of finance of the Municipal Committees/ Councils/Corporation for fixed assets formation and for the accumulation of financial claims against the rest of the economy. contributions and recoveries from the State Government and other institutions. Item 2 Increase in Inventories:.

Sale of Commodities and Services treated as 2045 deduction of consumption expenditure 3. 5. Table 5. 5. Profit of Departmental Commercial Undertakings Total Adjustments Revenue as shown in the Economic Classification (-) 19263 (-) 14835 58952 85346 . 1 1.No.1 Income: Reconciliation of Municipal Committees/Councils/Corporation Budgets: (Rs. Revenue 2 Total Income of the Municipal Committees/ Councils/Corporation 2007-08 3 56927 2008-09 4 78215 2009-10 5 100181 LESS: 2. 4.1. 6. ADD: 7. in Lakhs) Sr.20 CHAPTER –V RECONCILIATION In this chapter an attempt has been made to reconcile the figures relating to total income and expenditure of Municipal Committees/ Councils/ Corporation with the revenue and expenditure as worked out by the economic classification scheme. 1098 2011 Suspense Account 1584 Capital Transfers (Capital Grants and Contributions and recoveries) Sale Proceeds of Departmental Commercial undertakings Loans (Incomings) 9074 981 605 (-) 416 (-) 14705 42222 2340 11579 1160 2753 (-) 333 2154 8637 1385 207 (-) 441 5.1 Reconciliation : Income The various adjustments in the Economic Classification to arrive at the income as given in the Municipal Budgets for the years under review are spelt on in detail in the table no.

in Lakhs) Sr. Operating Expenses of Departmental Commercial Undertakings Total Adjustments Expenditure as shown in the Economic Classification 1397 (-) 3442 51283 1493 (-) 2591 61612 1826 (-) 3837 77801 . 5. Table 5.2: Expenditure: Reconciliation of Municipal Committees/Councils/ Corporation Budgets (Rs.2.21 5. Expenditure (Revenue & Capital) 2007-08 2008-09 2009-10 1 2 3 4 5 1. Total Expenditure of Municipal 54725 64203 81638 Committees/Councils/Corporation 2.2 Reconciliation Expenditure: The various adjustments in the Economic Classification to arrive at the expenditure as given in the Municipal Budgets for the years under review are spelt on in detail in the table No.No. LESS: Sale of Commodities and Services Y Treated as deduction of Consumption Expenditure 2045 1098 2011 3.

FUNCTIONAL CLASSIFICATION .

1968” serve as guidelines. Economic Services 9. General Public Services 2. The U.N. “ A Manual for Economic and Functional Classification of Government Transactions. These enterprises produce goods and services that are sold largely out -side the public sector. It gives information about public expenditure devoted to a particular service or group of services.22 CHAPTER-VI PRINCIPLES OF FUNCTIONAL CLASSIFICATION Economic classification groups the primary items of expenditure by their economic character while functional classification groups them according to the particular purpose they serve. Housing and Community Services 7. say education. It is designed to show how expenditure is divided into different types of services provided. It may also be noted that the functional classification is not applied to receipts except to those which may be considered as offsets to expenditure on goods and services included in this type of classification such as proceeds from sale of goods and services. Other purposes . Education 4. Medical and Public Health 5.e. All items of expenditure have been grouped under different broad functional categories. Civil Defence 3. Their current expenditure on goods and services is an intermediate expenditure which represents cost of production and net expenditure on final goods and services. health or housing and community services etc. Cultural. Recreational and Religious Services 8. reports i. The functional classification excludes current expenditure on goods and services of Departmental Commercial Undertakings. Social Security and Welfare Services 6. 1958” and “ System of National Account. The functional categories are as under:1.

medical and public health. health and water supply etc.23 Economic and Functional Classification have been combined into a single two way cross-classification by significant economic and functional categories.2 and 6. It relates to expenditure for the year 2007-2008 (Accounts).1. For example. The broad divisions of economic classification are current and capital expenditure while that of functional classification are general public services. it can be seen how much is spent on goods and services. welfare services. education. on capital formation or for promoting education. The Table 6. it is very easy to see the nature of expenditure on each group of services. social security. economic services and other purposes. . 2008-2009 (Accounts) and 2009-10(Accounts). housing and community services. defence. 6. recreational and religious services. From this. cultural.3 splits up horizontally the expenditure on each service for the years under review into significant economic categories.

Other Purposes i) Interest 33364 2045 -2 31431 939 77 58 58 1074 1074 1074 1074 1 1 1075 1075 i) Agriculture.24 TABLE: 6.939 77 9 38 138 138 1 139 2416 3528 11471 17415 17415 57 17472 38 9848 81004244 46 11096 46 11096 2 46 11098 Total Current Expenditure 11 1601 ii) Loans & Advances10 Grand Total 16372 5094 11898 31319 110 . Defence Education Medical & Public Health Social Security and Welfare Services Housing & Community Services 7. 5. General Public 3040 468 87 3595 2045 1550 51 services 2. 3.Recreational 91 & Religious Services Economic Services Fishing & Hunting ii) Water Supply 9. 8.3+4+5 Out ption Head Salaries and tenance side ExpenServices Sales diture 1 2 3 4 5 6 7 8 9 10 1.Forestry.Interest Grants No. Cultural.1 Economic and Functional Classification of Budgetary Expenditure of Municipal Committees/Councils/Corporation 2007-2008 (Accounts) (Rs in Lakhs) Current Expenditure Wages Purchase Repairs Total Less NetConsum. 6. Name of and of Goods & Main. 4.

) Economic and Functional Classification of Budgetary Expenditure Of Municipal Committees/Councils/Corporation 2007-2008 (Accounts) (Rs. 19 2361 164 19852 51283 * excluding operating expenses of departmental commercial undertakings.tal Ction (Suspetion mption ment Expense ndituAccount) re 2 12 13 14 15 16 17 18 General Public Services 2.Invest. 8. Other Purposes i) Interest ii) Loans & Advances Grand Total 3689 17392 1 366 1891 39 2 3692 3692 4541 852 1 2 .25 TABLE : 6.invenCapital Current marked CapiConstru.Consu.11375 28847 1 2841 136 4 1 2981 47 14079 563 33 164 760 Grand Total* 1 1. 5. Defence Education Medical & Public Health Social Security and Welfare Services Housing & Community 9255 Services Cultural. in Lakhs) Capital Expenditure Sr. Name of Head Buildings Machinery Increase in For For Unear Total & Other and Equip. 7.Forestry Fishing & Hunting ii) Water Supply iii) Transport Services iv) Electricity Services 9.ments teries Forma. . 6. 3.Recreational & Religious Services Economic Services i) Agriculture. No . 4. Loans .4544 852 5619 1927 191 191 330 229 1891 .1 (Concld.

26 TABLE: 6. Education Health 5.3+4+5 Out Salaries and tenance side Services Sarvices Sales 1 2 3 4 5 6 7 1. Housing and Community Services 7574 13607 13607 3 13610 15 1 279 16 12403 Consum. Economic Services 1019 i) Agriculture. Name of Wages Purchase Repairs Total Less No. Defence 3.2 Economic & Functional Classification of Budgetary Expenditure of Municipal Committees/Councils/Corporation 2008-2009(Accounts) (Rs.Interest Grants Total ption Current ExpenExpenditure diture 8 9 10 11 2664 187 9 2860 16 12403 1 16 12404 4. Social Security & Welfare Services 6.Cultural.Recreational 100 and Religious Services 8. General Public 3192 468 102 3762 1098 2. in Lakhs) Current Expenditure Sr.Forestry 1019 Fishing and Hunting ii) Water Supply iii) Transport Services iv) Electricity Services9. Medical & Public 10886 1238 2809 3224 7. Head and of Goods & Main. Other purposes Grand Total 18021 11 108 108 5050 42 158 158 - 153 1285 1285 - 1098 153 1285 1285 30128 191 9 153 1285 1285 30328 _______________________________________________________________________________ 8155 31226 ________________________________________________________________________________ .

ments teries Forma.tion mption ment Expense ndituaccount) re 2 12 13 14 15 16 17 18 19 General Public 634 59 97 790 3650 Services 2. 4. No .Total* Constru.27 TABLE: 6.Total Grand & Other and Equip. 8.Consu.Forestry. 3346 15750 31284 61612 * excluding operating expenses of departmental commercial undertakings. .tal ction (suspe.Capital Current marked Capi.Invest. 7.in inven. 3. Other PurposesGrand Total 4877 28750 1 294 1971 10 172 97 4888 4888 5697 1 10 5708 820 6993 2105 i) Agriculture. Loans . Defence EducationMedical & Public Health Social Security and Welfare Services Housing & Community 19038 Services Cultural. 820 145 145 298 233 1971 53 21295 34905 3236 60 50 16 1 1. 6. in Lakhs) Capital Expenditure Sr.2 (Concld) Economic and Functional Classification of Budgetary Expenditure of Municipal Committees/Councils/Corporation 2008-2009 (Accounts) (Rs.Recreational & Religious Services Economic Services Fishing & Hunting ii) Water Supply iii) Transport Services iv) Electricity Services9. Name of Head Buildings Machinery Increase For For Unear. 4.

Education 4. 1196 365331108 212 .28 TABLE: 6.Interest Grants Total and of Goods &Main.Recreational 110 and Religious Services 8. Cultural. Other purposes Grand Total 27000 1196 i) Agriculture.3 Economic & Functional Classification of Budgetary Expenditure of Municipal Committees/Councils/Corporation 2009-2010 (Accounts) (Rs.Forestry. Social Security & Welfare Services 6.3+4+5 Out ption Current Salaries and tenance side ExpenExpenServices Sale diture diture 3 4 5 6 7 8 9 10 11 6581 570 46 7197 2011 5186 74 5260 6 15271 3836 1254 3511 11 72 72 5418 6126 43 5925 12 100 100 38544 6 16568 13272 133 1368 1368 2011 6 16568 13272 133 1368 1368 957 77 77 212 212 37853 6 16568 14229 133 1657 1657 - 1 2 1. Name of No. Medical & Public Health 5. General Public Services 2. Defence 3.Economic Services Fishing and Hunting ii) Water Supply iii) Transport Services iv) Electricity Services 9. Housing and Community Services 7. Head Current Expenditure Wages Purchase Repairs Total Less Consum. in Lakhs) Sr.

411 Fishing and Hunting ii) Water Supply 2624 iii) Transport Services 9. Loans . Cultural. No Name of Head . Other purposes iv) Electricity Services - Grand Total 31715 311 6761 - 1045 116 39948 77801 * excluding operating expenses of departmental commercial undertakings. Education 4. Buildings Machinery Increase in For For Unear & Other and Equip. Economic Services 3035 i) Agriculture. General Public Services 2.3 (Concld.InvestCtion (Suspense tion mption ment Account) 12 13 14 15 16 17 1183 3402 23990 76 217 18 18 6761 854 93 77 21 21 116 Total Grand Capi. Social Security & Welfare Services 6.29 TABLE : 6. . Housing and Community Services 7.Forestry. in Lakhs) Capital Expenditure Sr.) Economic & Functional Classification of Budgetary Expenditure of Municipal Committees/Councils/Corporation 2009-2010 (Accounts) (Rs.invenCapital Current marked Construments teries Forma.Total* tal Expenditure 18 19 2153 3571 31045 105 3074 432 2642 7413 6 20139 45274 238 4731 2089 2642 - 1 2 1.Consu.Recreational105 and Religious Services 8. Defence 3. Medical & Public Health 5.

1: Functional Classification .1 : Functional Classification –Distribution of Expenditure of Municipal Committees/Councils/Corporation (Rs.09) 14079 (27.76) (3.31) 4731 (6.65) 7. Head 1 1. 2008-2009 and 2009-10 is given in table No.40) 77801 (100.49) 8.in Lakhs) Sr.03) 15750 (25. Table 7. 6.92) 16 (0. Forestry.1. 4. Recreational and Religious 330 298 Services (0.21) (7. 2007-2008.42) ii) Water Supply 3692 4888 (7.25) (56.60) 47 (0. The principles of the scheme have already been discussed in the previous chapter.00) (100.45) 2008-09 (Account) 4 3650 (5. It can be further expanded by introducing more programmes/activities under the main category of expenditure.93) iii) Transport Services iv) Electricity Services 9.19) 238 (0. 3. Other Purposes Total* 51283 61612 (100.00) * excluding operating expenses of departmental commercial undertakings Note: Figures in brackets are percentage to total . 2.88) 45274 (58. The detailed scheme which is presented in the following pages is put forward as an illustration of the classification of Municipal Committees/ Councils/Corporation expenditure by purpose.56) 2009-10 (Account) 5 7413 (9. Cultural. Economic Services 5619 6993 (10. Fishing 1927 2105 and Hunting (3. 2 General Public Services Defence Education Medical and Public Health Social Security and WelfareService Housing and Community Services 2007-08 (Account) 3 2361 (4.35) i) Agriculture.No.01 20139 (25.Distribution of Expenditure The Functional classification of Municipal Committees/ Councils/ Corporation budgetary expenditure for the year.08) 2089 (2. 7.68) 2642 (3.53) 6 (0.96) (11.64) (0. 7.00) 5. 28847 34905 (56.30 CHAPTER-VII DETAILED FUNCTIONAL CLASSIFICATION SCHEME This chapter presents a detailed scheme for the functional classification of Municipal Committees/Councils/Corporation budgetary expenditure.

.56) (25.77801 Lakhs in 2009-2010 as compared to Rs.25) 330 (0.00) 2008-09 2009-10 4 5 57962 70388 (94.07) (90.96) 2361 (4.07 percent in 2008-2009 and 90. 61612 lakhs in 2008-2009 and Rs. General Public Service 2.7.2 Developmental and Non-Developmental Expenditure of Municipal Committees/Councils/Corporation (Rs. Education Medical & Public Health Social Security and welfare Services Housing & Community Services Cultural. Heads 1 2 A.31) 4713 (6.53 percent) during 2009-2010.2 gives information regarding expenditure according to major heads and their percentages under developmental and non-developmental categories:Table: .92) 45274 (58.40 percent of total expenditure during 2007-2008 as compared to 94. 2.60 percent) during 2007-2008 and Rs7413 lakhs (9.64) 5619 (10. in lakhs) Sr. Non-developmental expenditure during 2008-2009 was Rs.31 7.00) *Excluding operating expenses of departmental commercial undertakings Note: Figures in brackets show percentages to total . Other Purposes Total* 61612 77801 (100.No.45) 28847 (56.49) 6993 (11.88) 34905 (56. 2361 lakhs (4.3650 lakhs (5.09) 14079 (27.40) 47 (0. 4. Developmental Expenditure 1. 5.01) 15750 20139 (25. 6.08) 7413 (9.35) 3650 (5.53) 7413 (9.47) 16 6 (0.60) 2361 (4.92) 3650 (5.92 percent) as compared to Rs.19) 238 (0. 3. Developmental and non-developmental expenditure of all municipal Committees/Councils/Corporation comes to Rs.Developmental Expenditure 1. Recreational and Religious Services Economic Services 2007-08 3 48922 (95.51283 lakhs in 2007-2008.60) 51283 (100.53) - B.00) (100.03) (0. Defence 3. Developmental expenditure has been dominating in the years under reference with a major share of 95. Table 7.65) 298 (0.2: Developmental & Non-Developmental Expenditure . Non.47 percent in 2009-2010 which is a good sign of developmental activities at urban local bodies level.

Subsidiary services such as transportation of school children. provision of drugs and appliances and similar field programmes.It consists of expenditure on relief measures. contributions to family welfare agencies etc. school meals and other ancillary services designed to promote and facilitate schools attendance are covered under this head of expenditure. . burning and burial of paupers. medical and dental clinics. promotion of school systems. Defence:. taxes on vehicles. dogs. advertisement tax. municipal engineer and supporting staff. slaughter houses. building application fee.It includes expenditure on public health direction. rents on municipal lands and building fee. Executive Officer.It includes establishment expenses on hospitals and dispensaries. prevention and control of malaria and other epidemic diseases.32 CHAPTER-VIII NOTES ON FUNCTIONAL CATEGORIES 1. (b) Public Health:. conservancy system and prevention of food adulteration. 3. It includes scholarships and grants to individuals for education and training purposes. tax on entry of goods into local areas.This head relates to expenditure incurred on general regulation and head. The activities relating to this head come under the Centre and State Governments. etc. Secretary and their supporting staff. 4. secondary schools and colleges. sickness and other benefits to compensate for the loss. Welfare services include expenditure on child welfare. 2. Social Security and Welfare Services:. 5. sewing schools. injury. charges for lunatics. composition fee and other taxes and duties on commodities and services. dentists. care for disabled. homes for aged. Medical and Public Health:(a) Medical:. antirabic treatment of paupers and outlays in respect of hospitals and dispensaries and services of individual doctors. management and support to primary schools. It comprises of payment of funds in case of accident.No expenditure is incurred at local bodies level under this functional Education:. animals. technical training institutions such as craft schools. anganwari centers. vaccination. It also covers expenditure incurred on collection of taxes on land and buildings. General Public Services :It includes remuneration of Head of Municipal Committees/Councils/Corporation.

.It includes expenditure incurred on plantation or road side trees. Recreational and Religious Services:. construction of water tank. public libraries. 7. purification and distribution of water.In Haryana Transport Services has not operated by the Municipal Committees/Councils/Corporation. street lighting. cost of canal water. (d) Electricity Service:9. road cutting. hostels and other lodging places which are not operated on a commercial basis. Fishing and Hunting:. 8. construction of dairy sheds. Expenditure on removal of dairies. repair of motors and consumer connections. water and sewerage connection charges. development of slums and expenditure on collection. It covers expenditure for provisions. octroi barriers and pavement of streets and drains. street watering and fire brigade services. Loans given to households for installation of water and sewerage connections are also included.It comprises expenditure on the schemes executed by Water Supply and Sewerage Board on behalf of Municipal Committees/ Councils/Corporation .It includes expenditure for upkeep of facilities such as land scaping and development of parks. dak bungalows and sarais. ( c ) Transport Services:. In Haryana Electricity Service has not been supplied by the Municipal Committees/Councils/Corporation. athletic fields.This head includes expenditure on promotion of activities and facilities in respect of housing and capital expenditure in connection with housing. assistance or support of housing and slum improvement activities. swimming pools. subsidy regarding water and sewerage connection charges. It also includes. Housing and Community Services:. storm water drainage. bushing and plant protection measures. Economic Services:(a) Agriculture. (b) Water Supply:.33 6. etc. rehri/rickshaw stands. construction of public toilets and urinals. repairs and renewal of pipes and hydrant installation of tubewells. Expenditure for religious purposes and contributions to religious organisations. Disbursement of loans to employees such as safai sewaks and other low income category of people for purchase and construction of houses. municipal booths and shops. purchase of material machinery and equipments. Cultural. It includes expenditure on wages and salaries of staff. Other Purposes:. water rates.This head includes interest payments and repayment of loans of general character which have not been classified elsewhere. Forestry. play-grounds.

34 56927 51643 60000 50000 30144 24972 26890 24996 40673 40000 21203 30000 13758 4548 20000 10000 0 1976-77 1986-87 1996-97 20012002 1388 1250 13313 19663 4443 20022003 Income 24430 20032004 20042005 29370 20052006 34931 20062007 47296 20072008 54724 70000 20082009 Expenditure 64203 80000 78215 INCOME AND EXPENDITURE OF MUNICIPAL COMMITTEES/COUNCILS/CORPORATIONS IN HARYANA (In Lakhs) .

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