CHAPTER 3
FINANCIAL ADMINISTRATION IN INDIA
3.1 In a Parliamentary set up, the overall
process of control over the financial administration in a State is threefold
one viz.
(a) Legislative control,(b) Administrative control; and(c) Audit control
ഒരു പാർലമെന്ററി രൂപീകരണത്തിൽ, ഒരു സംസ്ഥാനത്തെ സാമ്പത്തിക ഭരണനിർവഹണത്തിന്റെ മൊത്തത്തിലുള്ള നിയന്ത്രണ പ്രക്രിയ മൂന്നിരട്ടിയാണ്. (എ) നിയമനിർമ്മാണ നിയന്ത്രണം, (ബി) ഭരണപരമായ നിയന്ത്രണം; (സി) ഓഡിറ്റ് നിയന്ത്രണം
Q1.In a Parliamentary set up, which of the following does not apply on the overall process of financial administration ?
(A) Legislative Control
(B) Administrative Control
(C) Executive Control
(D) Audit Control
(A) Legislative Control
(B) Administrative Control
(C) Executive Control
(D) Audit Control
Q2.Legislative control over the finances is exercised first at the time of:
(A) Policy making
(B) Election
(C) Budget preparation
(D) Policy implementation
(A) Policy making
(B) Election
(C) Budget preparation
(D) Policy implementation
Legislative Control
3.2 Legislative Control over the finances is
exercised mainly in two stages. The first is at the time of policy making and
the second in controlling the implementation of the policy.
The Legislature has the control of the purse and determines the manner of raising the resources and the quantum and how the money so raised shall be spent.
The Legislature specifies object on which the money so raised shall be spent and determines each year the amount to be spent on each of the various objects. This initial control is exercised at the time of the presentation of the annual budget or the Annual Financial Statement showing the estimated receipts and proposed expenditure of the State Administration, for the financial year.
The second stage of control viz. the control over the implementation of the policies is to ensure that moneys voted by the Legislature have been utilized for the purpose for which and in the manner in which the Legislature wanted them to be utilized. This control is exercised through a purposive use of Parliamentary procedures and a system of Committees.
നിയമനിർമ്മാണ നിയന്ത്രണം പ്രധാനമായും രണ്ട് ഘട്ടങ്ങളിലാണ് നടപ്പാ ക്കുന്നത്. ആദ്യത്തേത് നയരൂപീകരണ സമയത്തും രണ്ടാമത്തേത് പോളിസി നടപ്പാക്കുന്നത് നിയന്ത്രിക്കുന്നതിലും.
The Legislature has the control of the purse and determines the manner of raising the resources and the quantum and how the money so raised shall be spent.
The Legislature specifies object on which the money so raised shall be spent and determines each year the amount to be spent on each of the various objects. This initial control is exercised at the time of the presentation of the annual budget or the Annual Financial Statement showing the estimated receipts and proposed expenditure of the State Administration, for the financial year.
നിയമസഭ അങ്ങനെ സമാഹരിക്കുന്ന പണം ചെലവഴിക്കേണ്ട വസ്തുവിനെ വ്യക്തമാക്കുകയും ഓരോ വർഷവും വിവിധ വസ്തുക്കൾക്കായി ചെലവഴിക്കേണ്ട തുക നിർണ്ണയിക്കുകയും ചെയ്യുന്നു. സാമ്പത്തിക ബജറ്റിനായി വാർഷിക ബജറ്റ് അല്ലെങ്കിൽ വാർഷിക ധനകാര്യ സ്റ്റേറ്റ്‌മെന്റ് അവതരിപ്പിക്കുന്ന സമയത്താണ് ഈ പ്രാരംഭ നിയന്ത്രണം നടപ്പിലാക്കുന്നത്, കണക്കാക്കിയ രസീതുകളും സംസ്ഥാന ഭരണകൂടത്തിന്റെ നിർദ്ദിഷ്ട ചെലവും കാണിക്കുന്നു.
The second stage of control viz. the control over the implementation of the policies is to ensure that moneys voted by the Legislature have been utilized for the purpose for which and in the manner in which the Legislature wanted them to be utilized. This control is exercised through a purposive use of Parliamentary procedures and a system of Committees.
Q3..Legislative control over the finances is exercised first at the time of:
(A) Policy making
(B) Election
(C) Budget preparation
(D) Policy implementation
(A) Policy making
(B) Election
(C) Budget preparation
(D) Policy implementation
Administrative
Control
3.3 The Administration is engaged in carrying
out the policies acceptable to the Legislature. It is accountable to the
Legislature regarding the manner in which it has collected moneys as authorized
by the Legislature, and utilized them for implementation of the policies laid
down by the Legislature and on the specified objects. The outstanding feature
of a democracy is this accountability of the Administration to the Legislature.
The Administration has also to ensure the formulation of similar accountability
on the part of each authority subordinate to the one immediately above in the
hierarchy of delegation.
നിയമസഭയ്ക്ക് സ്വീകാര്യമായ നയങ്ങൾ നടപ്പിലാക്കുന്നതിൽ അഡ്മിനിസ്ട്രേഷൻ ഏർപ്പെട്ടിരിക്കുന്നു. നിയമനിർമ്മാണസഭ അംഗീകരിച്ച പ്രകാരം പണം സ്വരൂപിച്ച രീതിയും നിയമനിർമ്മാണസഭ നിശ്ചയിച്ചിട്ടുള്ള നയങ്ങൾ നടപ്പിലാക്കുന്നതിനും നിർദ്ദിഷ്ട വസ്‌തുക്കൾക്കും അവ ഉപയോഗപ്പെടുത്തുന്ന രീതി സംബന്ധിച്ച് നിയമസഭയ്ക്ക് ഉത്തരവാദിത്തമുണ്ട്. നിയമനിർമ്മാണസഭയുടെ ഉത്തരവാദിത്തമാണ് ജനാധിപത്യത്തിന്റെ ശ്രദ്ധേയമായ സവിശേഷത. ഡെലിഗേഷന്റെ ശ്രേണിയിൽ ഉടനടി മുകളിലുള്ള അധികാരത്തിന് കീഴിലുള്ള ഓരോ അതോറിറ്റിയുടെയും ഭാഗത്ത് സമാനമായ ഉത്തരവാദിത്തത്തിന്റെ രൂപീകരണം ഉറപ്പാക്കേണ്ടതുണ്ട്.
Q4.The outstanding feature of a democracy is the accountability of the administration to the :
(A) Judiciary
(B) Executive
(C) Legislature
(D) Constitution
(A) Judiciary
(B) Executive
(C) Legislature
(D) Constitution
Audit Control
3.4 The scope of State Audit encompasses the following
elements:
(a) Fiscal accountability- which includes fiscal
integrity, full disclosure and compliance with applicable laws and regulations;
(b) Managerial accountability- which is
concerned with efficiency and economy in the use of public funds, property,
personnel and other resources; and
(c) Programme accountability- which is concerned
with whether Government programmes and activities are achieving the objective
established for them with due regard to both costs and results.
സ്റ്റേറ്റ് ഓഡിറ്റിന്റെ വ്യാപ്തി ഇനിപ്പറയുന്ന ഘടകങ്ങളെ ഉൾക്കൊള്ളുന്നു:
(എ) ധനപരമായ ഉത്തരവാദിത്തം- ഇതിൽ ധന സമഗ്രത, പൂർണ്ണമായ വെളിപ്പെടുത്തൽ, ബാധകമായ നിയമങ്ങളും ചട്ടങ്ങളും പാലിക്കൽ എന്നിവ ഉൾപ്പെടുന്നു;
(ബി) ഭരണപരമായ ഉത്തരവാദിത്തം - പൊതു ഫണ്ടുകൾ, സ്വത്ത്, ഉദ്യോഗസ്ഥർ, മറ്റ് വിഭവങ്ങൾ എന്നിവയുടെ ഉപയോഗത്തിൽ കാര്യക്ഷമതയും സമ്പദ്‌വ്യവസ്ഥയുമായി ബന്ധപ്പെട്ടതാണ്; ഒപ്പം
(സി) പ്രോഗ്രാം ഉത്തരവാദിത്തം - ചെലവുകളും ഫലങ്ങളും സംബന്ധിച്ച് സർക്കാർ പരിപാടികളും പ്രവർത്തനങ്ങളും അവർക്കായി സ്ഥാപിച്ച ലക്ഷ്യം കൈവരിക്കുന്നുണ്ടോ എന്നതുമായി ബന്ധപ്പെട്ടതാണ്.
Q5.In the Audit Control, scope of State Audit encompasses the elements.
(A) Fiscal accountability
(B) Programme accountability
(C) Managerial accountability
(D) All the above
(A) Fiscal accountability
(B) Programme accountability
(C) Managerial accountability
(D) All the above
3.5 State Audit is the main instrument to secure
accountability of the lower formation in the set up to the Administration and
of the Administration to the Legislature in the area of financial
administration.
അഡ്മിനിസ്ട്രേഷനും അഡ്മിനിസ്ട്രേഷനും നിയമനിർമ്മാണസഭയിലേക്കും സാമ്പത്തിക ഭരണ മേഖലയിലെ നിയമനിർമ്മാണത്തിലേക്കും രൂപവത്കരിച്ചതിന്റെ താഴ്ന്ന ഉത്തരവാദിത്തത്തിന്റെ ഉത്തരവാദിത്തം ഉറപ്പാക്കുന്നതിനുള്ള പ്രധാന ഉപകരണമാണ് സ്റ്റേറ്റ് ഓഡിറ്റ്.
Q6................. is the main instrument to secure accountability of the lower formation in the set up to the Administration and of the Administration to the Legislature in the area of financial administration.
(A) State Audit
(B) Audit Control
(C) Administrative Control
(D) Legislative Control
(A) State Audit
(B) Audit Control
(C) Administrative Control
(D) Legislative Control
Q7.“Without audit, no accountability, without accountability, no control”. Who said this?
(A) Dicksee
(B) Darwin
(C) Jawaharlal Nehru
(D) E.L.Normanton
(A) Dicksee
(B) Darwin
(C) Jawaharlal Nehru
(D) E.L.Normanton
E.L. Normanton states
“without audit, no accountability,
without
accountability, no control”.
ഇ.എല്‍. നോർമന്റൺ പറയുന്നു
“ഓഡിറ്റ് ഇല്ലാതെ, ഉത്തരവാദിത്തമില്ല,
ഉത്തരവാദിത്തമില്ലാതെ, നിയന്ത്രണമില്ല ”.
Structure of Administration
3.6 From January 26, 1950, (the date of
commencement of the Constitution) India has been constituted into a Union of
States. The Union of India is made up of 25 States and 7 Union Territories as
shown below:
States
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Union Territories
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Andhra Pradesh
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Meghalaya
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Andaman & Nicobar Islands
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Arunachal Pradesh
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Mizoram
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Chandigarh
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Assam
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Nagaland
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Dadra & Nagar Haveli
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Bihar
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Orissa
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Delhi
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Goa
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Punjab
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Daman & Diu
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Gujarat
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Rajasthan
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Lakshadweep
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Haryana
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Sikkim
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Pondicherry
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Himachal Pradesh
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Tamil Nadu
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Jammu & Kashmir
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Tripura
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Karnataka
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Uttar Pradesh
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Kerala
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West Bengal
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Madhya Pradesh
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Maharashtra
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Manipur
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3.7 The executive power of the Union vests in
the President, who is elected by an electoral college consisting of the elected
members of both Houses of Parliament and of the Legislative Assemblies of the
various States, and the power is exercised by him either directly or through
officers subordinate to him. The President has a Council of Ministers, with the
Prime Minister at the head, to aid and advise him in the exercise of his
functions.
The executive power of the Union extends to matters, with respect to
which Parliament has power to make laws, to the exercise of such rights,
authority and jurisdiction as are exercisable by the Government of India by
virtue of any treaty or agreement and to the giving of directions to the States
in specified matters.
പാർലമെന്റിന്റെ ഇരുസഭകളിലെയും വിവിധ സംസ്ഥാനങ്ങളിലെ ലെജിസ്ലേറ്റീവ് അസംബ്ലികളിലെയും തിരഞ്ഞെടുക്കപ്പെട്ട അംഗങ്ങൾ അടങ്ങുന്ന ഒരു ഇലക്ടറൽ കോളേജ് തിരഞ്ഞെടുക്കുന്നതാണ് രാഷ്ട്രപതിയെ.അദ്ദേഹത്തിന്‍റെ യൂണിയൻ എക്സിക്യൂട്ടീവ് അധികാരം, അധികാരം നേരിട്ട് അല്ലെങ്കിൽ ഉദ്യോഗസ്ഥർ മുഖേന അദ്ദേഹം പ്രയോഗിക്കുന്നു .രാഷ്ട്രപതിക്ക് മന്ത്രിമാരുടെ ഒരു കൗൺസിൽ ഉണ്ട്, അതിന്‍റെ തലപ്പത്ത് പ്രധാനമന്ത്രിയാണ് -രാഷ്ട്രപതിയുടെ പ്രവർത്തനങ്ങൾ നിർവഹിക്കാനും സഹായിക്കാനും ഉപദേശിക്കാനും.
Q8..Executive power of the Indian Union vests in the :
(A) Prime Minister
(B) Finance Secretary
(C) The President of India
(D) Finance Minister
Q9..Who is the head of the cabinet in Indian Union?(A) Prime Minister
(B) Finance Secretary
(C) The President of India
(D) Finance Minister
(A) President
(B) Prime Minister
(C) Parliament
(D) None of the above
Q10.Who elects the President of India ?
(A) Members of Parliament
(B) Elected members of both Houses of Parliament and the Legislative Assemblies of States
(C) Members of both Houses of Parliament and State Legislative Assemblies
(D) Elected Members of Parliament
(A) Members of Parliament
(B) Elected members of both Houses of Parliament and the Legislative Assemblies of States
(C) Members of both Houses of Parliament and State Legislative Assemblies
(D) Elected Members of Parliament
ഒരു സംസ്ഥാനത്തിന്റെ എക്സിക്യൂട്ടീവ് അധികാരം ഗവർണറുടെ കൈകളിലും മുദ്രയിലും വാറന്റിലൂടെ രാഷ്ട്രപതി ഗവര്‍ണറെ നിയമിക്കുന്നു.
This authority is exercised by the Governor directly or through officers
subordinate to him. The Governor has a Council of Ministers with the Chief
Minister at the head, to aid and advise him in the exercise of his functions
except in so far as he is, by or under the Constitution, required to exercise
his functions or any of them at his discretion. The executive Power of a State
extends generally to matters in respect of which the Legislature of the State
has power to make laws.
Q11.The executive power of a State is vested in :
(A) Chief Minister
(B) Chief Secretary
(C) Speaker
(D) Governor of the State
(A) Chief Minister
(B) Chief Secretary
(C) Speaker
(D) Governor of the State
Q12.The executive power of a State vests in the Governor who is appointed by:
(A) The President of India
(B) The Vice-President of India
(C) The Speaker of Lok Sabha
(D) The Chief Justice of the Supreme Court
(A) The President of India
(B) The Vice-President of India
(C) The Speaker of Lok Sabha
(D) The Chief Justice of the Supreme Court
3.9 Every Union Territory is administered by the
President acting to such extent as he thinks fit, through an administrator,
appointed by him with such designation as he may specify.
The Union Territories of Daman and Diu, and Pondicherry. Under the Government of Union Territories Act 1963, have separate Legislature. The Administration of each of these Union Territories has a Council of Ministers with the Chief Minister at the head to aid and advise him in the exercise of his functions.
Q13. Every Union Territory is administered by the President through:
(A) An administrator
(B) C & AG
(C) Chief Secretary
(D) The Vice - President
The Union Territories of Daman and Diu, and Pondicherry. Under the Government of Union Territories Act 1963, have separate Legislature. The Administration of each of these Union Territories has a Council of Ministers with the Chief Minister at the head to aid and advise him in the exercise of his functions.
Q13. Every Union Territory is administered by the President through:
(A) An administrator
(B) C & AG
(C) Chief Secretary
(D) The Vice - President
Q14.Union Territory is administered by whom?
A:-The President of India
A:-The President of India
B:-The Administrator
C:-The Council of Ministers
D:-The Governor
Answer:- Option-A
As regards matters in concurrent List , the Central law prevails over the State law, if any, on the subject, except in cases where the State Law has been specially assented by the President, Parliament is competent at any time to enact any law with respect to the same matter including a law adding to, amending, varying or repealing the law made by the State Legislature. Powers in respect of any other matter not enumerated in List II and III including any tax not mentioned in either of these lists vests in Parliament.
Q15.The distribution of the Legislative Powers between the Union and the States is governed by
(A) Article 245 of the Constitution of India
(B) Article 246 of the of the Constitution of India
(C) Article 256 of the of the Constitution of India
(D) Article 266 of the of the Constitution of India
Q16.The control over finances of Central Government was
traditionally confined to:
(A) Finance Department
(B) Ministry of Finance
(C) Council of Ministers
(D) Comptroller & Auditor General
traditionally confined to:
(A) Finance Department
(B) Ministry of Finance
(C) Council of Ministers
(D) Comptroller & Auditor General
Q17.The overall responsibility of coordination and control over the finances of State Governments are confined to :
(A) State Finance Department
(B) Ministry of Finance
(C) RBI
(D) Accountant General
(A) State Finance Department
(B) Ministry of Finance
(C) RBI
(D) Accountant General
Q18.The distribution of the Legislative Powers between the Union and the States is governed by which article of the constitution
A:-Article 166
A:-Article 166
B:-Article 149
C:-Article 150
D:-Article 246
Answer:- Option-D
3.11 The control over finances of Government was
traditionally confined to Ministry of Finance in the Centre and the Finance
Department in the States.
With the phenomenal growth and complexity of Government activities powers were delegated to Administrative Ministries though the Ministry of Finance/Finance Department continues to have the overall responsibility of co-ordination and control. For speedy and effective discharge of their functions in financial matters which include planning programming, budgeting, monitoring and evaluation, and Integrated Financial Adviser is attached to each Ministry/Department. The Integrated Financial Adviser in each Ministry/ Department acts as both internal and external financial adviser. He would be consulted as internal financial adviser in the exercise of powers delegated to the Ministries/ Departments under the Delegation of Financial Power Rules, 1978. He would act as an external financial adviser on behalf of the Ministry of Finance in respect of matters outside the competence of the Administrative Ministry/ Department.
With the phenomenal growth and complexity of Government activities powers were delegated to Administrative Ministries though the Ministry of Finance/Finance Department continues to have the overall responsibility of co-ordination and control. For speedy and effective discharge of their functions in financial matters which include planning programming, budgeting, monitoring and evaluation, and Integrated Financial Adviser is attached to each Ministry/Department. The Integrated Financial Adviser in each Ministry/ Department acts as both internal and external financial adviser. He would be consulted as internal financial adviser in the exercise of powers delegated to the Ministries/ Departments under the Delegation of Financial Power Rules, 1978. He would act as an external financial adviser on behalf of the Ministry of Finance in respect of matters outside the competence of the Administrative Ministry/ Department.
Q19.The overall responsibility of coordination and control over the finances of State Governments are confined to :
(A) State Finance Department
(B) Ministry of Finance
(C) RBI
(D) Accountant General
(A) State Finance Department
(B) Ministry of Finance
(C) RBI
(D) Accountant General
Q20.The control over finances of Central Government was traditionally confined to:
(A) Finance Department
(B) Ministry of Finance
(C) Council of Ministers
(D) Comptroller & Auditor General
(A) Finance Department
(B) Ministry of Finance
(C) Council of Ministers
(D) Comptroller & Auditor General
Q21.The overall responsibility of coordination and control over the finances of State Governments are confined to :
(A) State Finance Department
(B) Ministry of Finance
(C) RBI
(D) Accountant General
(A) State Finance Department
(B) Ministry of Finance
(C) RBI
(D) Accountant General
യൂണിയൻ, കേന്ദ്രഭരണ പ്രദേശം അല്ലെങ്കിൽ ഒരു സംസ്ഥാനത്തെ സർക്കാർ പ്രവർത്തനങ്ങളുടെ ഓരോ വകുപ്പിന്റെയും നടത്തിപ്പിന്റെ പ്രാഥമിക ഉത്തരവാദിത്തം ബന്ധപ്പെട്ട വകുപ്പ് മേധാവിയുടെ മേൽ ചുമത്തപ്പെടുന്നു, ഇക്കാര്യത്തിൽ നിയന്ത്രിക്കുകയും നയിക്കുകയും ചെയ്യുന്ന ഭരണകൂടത്തിന്റെ ഭരണ മന്ത്രാലയം / വകുപ്പ് അത് വിഷയമാണ്. സാമ്പത്തിക കാര്യങ്ങളിൽ ഒരു വകുപ്പിന്റെ ഓരോ തലവനും വരുമാനം ശേഖരിക്കുന്നതിനും അയാളുടെ വകുപ്പുമായി ബന്ധപ്പെട്ട ചെലവുകളുടെ നിയന്ത്രണത്തിനും ഉത്തരവാദിയാണ്, അവ സ്വീകരിക്കുന്നതും വിതരണം ചെയ്യുന്നതും വിവിധ സ്ഥലങ്ങളിലൂടെയും വിവിധ വ്യക്തികളിലൂടെയും പ്രാബല്യത്തിൽ വരും.
Q22.The initial responsibility for the administration of each Government Department is laid upon the concerned:
(A) Finance Department
(B) Head of the Department
(C) Minister
(D) Ministry
(A) Finance Department
(B) Head of the Department
(C) Minister
(D) Ministry
Q23.In financial matters, each Head of Department is responsible for the :
(A) Collection of revenue
(B) Incurring expenditure against allotment
(C) Compilation of accounts
(D) Collection of revenue and for the control of expenditure pertaining to his department
(A) Collection of revenue
(B) Incurring expenditure against allotment
(C) Compilation of accounts
(D) Collection of revenue and for the control of expenditure pertaining to his department
Q24.In financial matters who is responsible for the collection of revenue and for control of expenditure pertaining to his department, the receipt and disbursement of which are affected at various places and through various persons?
(A) Administrative Ministry/Administrative Department (B) Chiefs of account branches
(C) Each Head of a Department
(D) Controlling Officers of Departments
(A) Administrative Ministry/Administrative Department (B) Chiefs of account branches
(C) Each Head of a Department
(D) Controlling Officers of Departments
Finance of Governments
3.13 As per article 266 of the Constitution of
India, each State has a separate Consolidated Fund entitled the ‘ Consolidated
Fund of the State’ into which the revenues received by the Government by the
issue of Treasury Bills, loans or ways and means advances and moneys received
by that Government in repayment of loans are credited and from which the
expenditure of the State, when authorized by the appropriate Legislature, is
met. Each such State has also a separate Public Account of the State, in to
which all other public moneys received by or on behalf of the State are
credited and from which disbursements are made in accordance with the
prescribed rules.
The revenues received by the Government of India including those received by Union Territories without separate Legislature, loans raised by that Government by the issue of Treasury Bills, loans or ways and means advances and moneys received by that Government in repayment of loans are credited into a separate Consolidated Fund, entitled the ‘ Consolidated Fund of India’ and expenditure of the Government of India including Union Territories without separate Legislature when so authorized by the Parliament, is met from that Fund. All revenues received in a Union Territory by the Government of India or the Administrator of the Union Territory in relation to any matter with respect to which the Legislature of the Union Territory has power to make laws and all grants made and all loans advanced to the Union Territory from the Consolidated Fund of India and all moneys received by the Union Territory in repayment of loans form one consolidated Fund entitled the ‘ Consolidated Fund of the Union Territory’. All other public moneys received by or on behalf of the Government of India including those received by the Union Territories are credited to the Public Account of India and disbursements there from are made in accordance with the prescribed rules. No moneys out of the Consolidated Fund of India or the Consolidated Fund of a State or of a Union Territory are appropriated except in accordance with law and for the purposes and in the manner provided in the Constitution or in the Government of Union Territories Act, 1963.
Q25.As per Article 266 of the Constitution of India, each State has a separate Fund known as :
(A) Contingency Fund of the State
(B) Consolidated Fund of the State
(C) Public Account of the State
(D) (B) & (C) above
Correct Answer:-Option: (C)
The revenues received by the Government of India including those received by Union Territories without separate Legislature, loans raised by that Government by the issue of Treasury Bills, loans or ways and means advances and moneys received by that Government in repayment of loans are credited into a separate Consolidated Fund, entitled the ‘ Consolidated Fund of India’ and expenditure of the Government of India including Union Territories without separate Legislature when so authorized by the Parliament, is met from that Fund. All revenues received in a Union Territory by the Government of India or the Administrator of the Union Territory in relation to any matter with respect to which the Legislature of the Union Territory has power to make laws and all grants made and all loans advanced to the Union Territory from the Consolidated Fund of India and all moneys received by the Union Territory in repayment of loans form one consolidated Fund entitled the ‘ Consolidated Fund of the Union Territory’. All other public moneys received by or on behalf of the Government of India including those received by the Union Territories are credited to the Public Account of India and disbursements there from are made in accordance with the prescribed rules. No moneys out of the Consolidated Fund of India or the Consolidated Fund of a State or of a Union Territory are appropriated except in accordance with law and for the purposes and in the manner provided in the Constitution or in the Government of Union Territories Act, 1963.
Q25.As per Article 266 of the Constitution of India, each State has a separate Fund known as :
(A) Contingency Fund of the State
(B) Consolidated Fund of the State
(C) Public Account of the State
(D) (B) & (C) above
Correct Answer:-Option: (C)
Q26.Revenues received by State Government is credited to :
(A) Consolidated Fund of the State
(B) Contingency Fund of the State
(C) Public Account of the State
(D) Private Account of the State
(A) Consolidated Fund of the State
(B) Contingency Fund of the State
(C) Public Account of the State
(D) Private Account of the State
Q27.One of the following transactions does not form part of the Consolidated Fund of India. Which is it?
(A) Railway
(B) Defence
(C) Posts and Telecommunication
(D) State Insurance
(A) Railway
(B) Defence
(C) Posts and Telecommunication
(D) State Insurance
Q28.All public moneys, those not credited to the Consolidated Fund,received by the Government are credited to
(A) Contingency Fund
(B) Public Account
(C) Estimate Account
(D) Expenditure Account
(A) Contingency Fund
(B) Public Account
(C) Estimate Account
(D) Expenditure Account
Q29.Taxes collected by Government are credited under :
(A) Consolidated Fund
(B) Contingency Fund
(C) Public Account
(D) Provident Fund
Correct Answer:-Option: (A)
(A) Consolidated Fund
(B) Contingency Fund
(C) Public Account
(D) Provident Fund
Correct Answer:-Option: (A)
Q30.The
custodian of the contingency fund of a state is:
(A) The
Governor
(B) The
Chief Minister
(C) The
Finance Minister
(D) The
State Legislature
Q31.The fund which is used for meeting unforeseen expenditure pending authorisation of such expenditure by the State Legislature is met from :
(A) Consolidated Fund
(B) Public Account
(C) Local Fund
(D)Contingency Fund
(A) Consolidated Fund
(B) Public Account
(C) Local Fund
(D)Contingency Fund
Q32..............Fund established by the Legislature of a State in the nature of imprests kept with the Governor
(A) Public Debt.
(B) Consolidated Fund
(C) Public Account
(D) Contingency Fund
(A) Public Debt.
(B) Consolidated Fund
(C) Public Account
(D) Contingency Fund
Q33.Contingency Fund of the State is established under Article the Constitution of India
(A) 249
(B) 266
(C) 267
(D) 276
(A) 249
(B) 266
(C) 267
(D) 276
Q34.The Contingency Fund of the State is intended for :
(A) Implementation of various developmental activities at Government Level.
(B) Enabling advances for meeting unforeseen expenditure
(C) Disbursing pensionary benefits of employees
(D) Implementation of developmental works in Local Self Govt Institutions.
(A) Implementation of various developmental activities at Government Level.
(B) Enabling advances for meeting unforeseen expenditure
(C) Disbursing pensionary benefits of employees
(D) Implementation of developmental works in Local Self Govt Institutions.
Q35.The Contingency Fund of the Union is at the disposal of:
(A) Prime Minister of India
(B) The President of India
(C) Finance Minister of India
(D) Finance Secretary, Union Govt.
(A) Prime Minister of India
(B) The President of India
(C) Finance Minister of India
(D) Finance Secretary, Union Govt.
Q36.The Contingency Fund of a State is at the disposal of :
(A) The Governor
(B) The Chief Minister
(C) The Finance Minister
(D) The State Legislature
(A) The Governor
(B) The Chief Minister
(C) The Finance Minister
(D) The State Legislature
3.15 The sources of revenue and taxation of States or Union Territory having separate Legislature are to a large extent distinct from those of the Government of the Union. The financial arrangements embodied in the Constitution provide, however, for:
(1) assignment to the States of certain duties
levied by the Government of India but collected by the States within which such
duties are respectively leviable. Where such duties are leviable within any
Union Territory these are collected by the Union Government.
(2) assignment to the States of the net proceeds
of certain duties and taxes levied and collected by the Government of India
(excepting the proceeds attributable to Union Territories) and their
distribution among the States within which such duties and taxes are leviable
in accordance with the prescribed principles.
(3) assignment to the States of a share of the
net proceeds of Taxes on Income other than agricultural income except those
attributable to Union Territories and its distribution among them in the
prescribed manner.
Though the net proceeds or a share of the net
proceeds of certain taxes levied and collected by the Government of India are
distributed to the States, Parliament has the right to levy a surcharge for
purposes of the Government of India. In the same way, the whole or a share of
the net proceeds of the Union duties of Excise, other than Duties of Excise on
Medical and toilet preparations, may be paid to the States by an Act by
Parliament. Provision also exists for grants-in-aid to the States for different
purposes such as raising the level of administration of tribal areas, promoting
the welfare of Scheduled Castes and Scheduled Tribes.
Borrowing
3.16 Under Article 292 of the Constitution, the
Union can raise money by borrowing upon the Security of the Consolidated Fund
of India within such limits, as may, from time to time be fixed by Parliament
by law. Subject to such limits, the Union can also give guarantees in respect
of loans raised by a State. Under Article 293 of the Constitution a State may
borrow within the territory of India upon the Security of the Consolidated Fund
of the State within such limits, as may form time to time be fixed by law, by
the Legislature of the State subject to the condition that the State may not
without the consent of the Government of India raise any loan if there is still
outstanding any part of loan made to the State by the Government of India or in
respect of which a guarantee has been given by the Government of India or by
its predecessor Government. A State may also obtain loans from the Government
of India subject to such conditions as may be laid down by or under any law
made by Parliament.
Q37.The Central Govt. can raise money by borrowings upon security of the Consolidated Fund of India within such limits fixed by Parliament by law under............of the Constitution of India.
(A) Article 248
(B) Article 292
(C) Article 270
(D) Article
(A) Article 248
(B) Article 292
(C) Article 270
(D) Article
Q38.Indian Union can raise money by borrowings upon the se
(A) Contingent Assets of India
(B) Cash Reserve of India
(C) Consolidated Fund of India
(D) Capital Fund of India
(A) Contingent Assets of India
(B) Cash Reserve of India
(C) Consolidated Fund of India
(D) Capital Fund of India
Q39.‘Contingent Liability denotes:
(A) Expenditure incurred under 'contingencies'
(B) Liability due to contingent expenses subsequently recoverable
(C) Liability constituted by guarantee given by Union Govt. in respect of loans raised by a State
(D) Liability to be discharged by incurring expenditure in advance due to non-approval of budget.
(A) Expenditure incurred under 'contingencies'
(B) Liability due to contingent expenses subsequently recoverable
(C) Liability constituted by guarantee given by Union Govt. in respect of loans raised by a State
(D) Liability to be discharged by incurring expenditure in advance due to non-approval of budget.
Q40.Union Governments are empowered to give guarantee in respect of loans raised by a State. Such guarantees constitute.
(A) Contingent Liabilities
(B) Public Liabilities
(C) Consolidated Liabilities
(D) Collateral Security
(A) Contingent Liabilities
(B) Public Liabilities
(C) Consolidated Liabilities
(D) Collateral Security
Q41.A State Government may raise money under borrowings upon security of the Consolidated Fund of State fixed by law, by the:
(A) Governor
(B) Accountant General
(C) The President of India
(D) Legislature of the State
(A) Governor
(B) Accountant General
(C) The President of India
(D) Legislature of the State
Q42.Under Art.293 of the Constitution, a State may borrow money within the country upon the security of.....................and under the conditions laid down by the Legislature.
(A) Consolidated Fund of the State
(B) Contingency Fund of the State
(C) Reserve Bank
(D) Public Accounts of the State
(A) Consolidated Fund of the State
(B) Contingency Fund of the State
(C) Reserve Bank
(D) Public Accounts of the State
Q43.Who prescribes the limit for raising money upon security of consolidated fund of India?
A:-Reserve bank of India
B:-Finance commission of India
C:-The parliament by law
D:-The Union Finance Minister
Answer:- Option-C
Annual Financial Statement
(1)
Consolidated Fund; (2) Contingency Fund; (3) Public Account.
The Budget comprises (i) Revenue Budget; and (ii) Capital Budget.
In order to have meaningful reflection of the national development effort and also as a means for evaluating the progress of projects against set targets as well as to serve as a tool for securing the efficient management of operations entrusted to the Administration, a system of performance budgeting has been introduced both at the Centre and in the States. The individual items which make up the budget are shown not only in financial terms but as far as possible in physical terms as well, thereby establishing a proper relationship between inputs and outputs and enabling a proper assessment of the performance in relation to costs.
The Budget comprises (i) Revenue Budget; and (ii) Capital Budget.
In order to have meaningful reflection of the national development effort and also as a means for evaluating the progress of projects against set targets as well as to serve as a tool for securing the efficient management of operations entrusted to the Administration, a system of performance budgeting has been introduced both at the Centre and in the States. The individual items which make up the budget are shown not only in financial terms but as far as possible in physical terms as well, thereby establishing a proper relationship between inputs and outputs and enabling a proper assessment of the performance in relation to costs.
Q44.The budget shows receipts and payments of the Government under. .............heads
(A) 3
(B) 4
(C) 2
(D) 5
(A) 3
(B) 4
(C) 2
(D) 5
Q45.A statement of its estimated annual receipts and expenditure which is prepared by each Government and presented to its Legislature is commonly known as
(A) Estimate Account
(B) Public Account
(C) Budget
(D) Appropriation Account
(A) Estimate Account
(B) Public Account
(C) Budget
(D) Appropriation Account
Q46.Budget shows receipts and payments of Government under:
(A) Revenue Account, Capital Account and Public Account
(B) Debt, Deposit and Advances
(C) Consolidated Fund, Contingency Fund and Public Account
(D) None of these
(A) Revenue Account, Capital Account and Public Account
(B) Debt, Deposit and Advances
(C) Consolidated Fund, Contingency Fund and Public Account
(D) None of these
Q47.Annual Financial Statement is popularly known as:
(A) Money Bill
(B) Appropriation Bill
(C) Budget
(D) Finance Billy
(A) Money Bill
(B) Appropriation Bill
(C) Budget
(D) Finance Billy
Q48.Which is known as the Budget ?
(A) Appropriation Act
(B) Financial review
(C) Annual Financial Statement
(D) Estimate account
(A) Appropriation Act
(B) Financial review
(C) Annual Financial Statement
(D) Estimate account
Q49.The Budget comprises of:
(A) Revenue Budget and Railway Budget
(B) Revenue Budget and Performance Budget
(C) Capital Budget and Revenue Budget
(D) Capital Budget and Railway Budget
(A) Revenue Budget and Railway Budget
(B) Revenue Budget and Performance Budget
(C) Capital Budget and Revenue Budget
(D) Capital Budget and Railway Budget
3.18 So much of the estimate as relates to expenditure charged upon
the Consolidated Fund is not submitted to the vote of the Legislature, though
it is open to discussion in the Legislature. So much of the estimate as relates
to other expenditure is submitted to the Legislature concerned in the form of
Demands for Grants on the recommendation of the President or the Governor of
the State or the Administrator of the Union Territories with Legislature, as
the case may be.
3.19 It is for each Government to settle the
form in which the demand should be presented but ordinarily a separate demand
is proposed for each Ministry/Department. Each demand contains, first, a
statement of the total required, then a statement of the detailed estimate
under each demand divided into items.
3.20 The Finance Bill containing the annual
taxation proposals is considered and passed by the Legislatures only after the
Demands for Grants have been Voted and the total expenditure is known. Then it
enters the Statute as the Finance Act.
Q50.The estimates of expenditure not charged on the Consolidated Fund have to be submitted to the vote of the Legislature. This estimate is made in the form of:
(A) Demands for Grants
(B) Expenditure Account
(C) Estimate Account
(D) None of these
(A) Demands for Grants
(B) Expenditure Account
(C) Estimate Account
(D) None of these
Q51.Which of the following is true regarding the Finance Bill?
(A) It relates to non-tax revenue
(B) It relates to annual taxation proposals
(C) It relates to revenue
(D) None of the above
(A) It relates to non-tax revenue
(B) It relates to annual taxation proposals
(C) It relates to revenue
(D) None of the above
Q52.The difference between Finance Act and Finance Accounts is :
(A) Former is a statutory Act based on annual enactment by the Legislature after budget passing while in the case of the latter they are annual accounts prepared by AG approved by C and ,AG and transmitted to Governor for being laid before the Legislature
(B) Both are more or less the same
(C) Finance Act is an Act passed by Legislature while Finance accounts are the one prepared by the Finance Department for the transaction that took place in the year (D) None of the above
(A) Former is a statutory Act based on annual enactment by the Legislature after budget passing while in the case of the latter they are annual accounts prepared by AG approved by C and ,AG and transmitted to Governor for being laid before the Legislature
(B) Both are more or less the same
(C) Finance Act is an Act passed by Legislature while Finance accounts are the one prepared by the Finance Department for the transaction that took place in the year (D) None of the above
Q53.When the Finance Bill containing the annual taxation proposals considered and passed by the Legislature, it becomes:
(A) Appropriation Act
(B) Finance Act
(C) Appropriation Bill
(D) Revenue Act
(A) Appropriation Act
(B) Finance Act
(C) Appropriation Bill
(D) Revenue Act
Appropriation Act
(a) The Grants made by the Legislature;
(b) The expenditure charged on the Consolidated
Fund, but not exceeding in any case the amount shown in the statement
previously laid before the Legislature. (This charged expenditure is referred
to as Appropriation in the following paragraphs).
No money can be withdrawn from the Consolidated
Fund, until this bill (i.e Appropriation Bill) is passed by the Legislature. The bill when passed by the
Legislature. The bill when passed by the Legislature becomes the Appropriation
Act.
Q54.Appropriation Bill is introduced to provide for the appropriation out of the :
(A) Consolidated Fund
(B) Public Account
(C) Contingency Fund
(D) None of the above
(A) Consolidated Fund
(B) Public Account
(C) Contingency Fund
(D) None of the above
Q55.No money can be withdrawn from the Consolidated Fund until:
(A) Appropriation Bill is prepared
(B) Appropriation Bill is presented before Legislature
(C) The Appropriation Bill is passed and becomes the Appropriation Act.
(D) Demands for Grants are passed
(A) Appropriation Bill is prepared
(B) Appropriation Bill is presented before Legislature
(C) The Appropriation Bill is passed and becomes the Appropriation Act.
(D) Demands for Grants are passed
Q56.Appropriation Act includes/covers:
(A) Appropriation out of the Consolidated Fund
(B) Expenditure under Contingency Fund
(C) Expenditure under Public Account
(D) None of the above
(A) Appropriation out of the Consolidated Fund
(B) Expenditure under Contingency Fund
(C) Expenditure under Public Account
(D) None of the above
Q57.When a Bill to withdraw money from the Consolidated Fund is passed by the Legislature, it becomes the:
(A) Annual Financial Statement
(B) Finance Act
(A) Annual Financial Statement
(B) Finance Act
(C) Grant
(D) Appropriation Act
(D) Appropriation Act
Q58.The authority for spending money on the various purpose indicating in the budget as passed by the Legislature is provided in the:
(A) Appropriation Accounts
(B) Finance Accounts
(C) (A) & (B)
(D) Appropriation Act
(A) Appropriation Accounts
(B) Finance Accounts
(C) (A) & (B)
(D) Appropriation Act
Q59.Which Act of the Parliament or the Legislature provides the authority for spending money for various purposes indicating in the government budget as passed
A:-Finance Act
A:-Finance Act
B:-Appropriation Act
C:-Contingency Act
D:-None of the above
Answer:- Option-B
Q60.From which fund the expenditure of a state, when authorized by the appropriate legislature is met?
A:-Employee’s Provident Fund
B:-Consolidated Fund of the State
C:-Consolidated Fund of India
D:-The Labour Welfare Fund
Answer:- Option-B
3.22 The sums authorized in the Appropriation
Act are intended to cover all the charges including the liability of past
years, to be paid during a financial year or to be adjusted in the accounts of
that year. Any unspent balance lapses and is not available for utilization in the
following year.
Q61.The sums authorised in the Appropriation Act are intended to cover:
(A) All the charges for the financial year concerned
(B) Liabilities of past years
(C) A&B above
(D) None of the above
(A) All the charges for the financial year concerned
(B) Liabilities of past years
(C) A&B above
(D) None of the above
Sub-heads of Grants and Appropriations
3.23 For purposes of financial control each
Grant or Appropriation is divided into a number of units called Sub-heads, each
of which may be sub-divided into smaller units of appropriation corresponding
to sub-heads or detailed heads of account.
Allotments and Re-appropriations
3.24 Within the amount of each Grant or
Appropriation as shown in the schedule to the Appropriation Act all allotments
and re-appropriations with in sub-heads and sub-divisions of sub-heads may be
sanctioned by Government or by such subordinate authorities as are duly
authorized to do so. This is, however, subject to the limitation that any
expenditure not falling within the scope or intention of a Grant may not be
authorized from funds provided under that Grant.
Q62.Any allotment or re-appropriation within a Grant or Appropriation may be authorised by the competent authority:
(A) At any time before, but not after the expiry of the financial year to which it relates.
(B) At any time
(C) After the expiry of the financial year
(D) Cannot be authorised except by Legislative Assembly
(A) At any time before, but not after the expiry of the financial year to which it relates.
(B) At any time
(C) After the expiry of the financial year
(D) Cannot be authorised except by Legislative Assembly
Ways and Means
All moneys received by or on behalf of Government either as dues of Government or by way of deposits, remittance or other wise enter into the cash balance. The Reserve Bank acts as the Banker to the Central and State Governments (except Jammu and Kashmir and Sikkim). Under the agreements with the Reserve Bank, the Governments are required to maintain a minimum balance with the Bank. A constant watch is kept on Government’s cash balance so that it does not fall below the prescribed minimum at any stage. For this purpose a watch over the progress of receipts and expenditure and also an effective control over expenditure are essential.
Q63.Methods of maintaining the Governments' daily cash balance at a level sufficient to meet its day-to day requirements is termed as
(A) Pro forma Accounts
(B) Resource Operation
(C) Ways and Means
(D) Appropriation
(A) Pro forma Accounts
(B) Resource Operation
(C) Ways and Means
(D) Appropriation
Q64.Ways and Means of Government refers to:
(A) Raising of additional revenues
(B) Raising of loans
(C) Laying new taxes
(D) A method of maintaining sufficient cash balance not below the minimum limit stipulated by R.B.I
(A) Raising of additional revenues
(B) Raising of loans
(C) Laying new taxes
(D) A method of maintaining sufficient cash balance not below the minimum limit stipulated by R.B.I
3.26 Generally the current receipts of
Governments fall short of the current expenditure during the earlier part of
the financial year and sometimes exceptionally heavy payments in excess of cash
balance have also to be made. In such cases, the Central Government borrows
from the Reserve Bank against issue to Treasury Bills, whenever necessary, for
replenishing its cash balance.
Similarly, the State Governments, in terms of
their agreements with the Reserve Bank, obtain Ways and Means advances from the
Bank which are repayable within a period not exceeding three months for special
‘Ways and Means’ advances.
The Central Government also assists them by phased releases of statutory grants, shares of divisible taxes and duties and Plan assistance to them. In case these arrangements prove insufficient, the State Governments approach the Central Government for temporary accommodation.
The Central Government also assists them by phased releases of statutory grants, shares of divisible taxes and duties and Plan assistance to them. In case these arrangements prove insufficient, the State Governments approach the Central Government for temporary accommodation.
Q65.Ways and Means advances are availed by the States from
(A) Central Govt. by wiping off budget deficit
(B) Reserve Bank to cover, deficit in daily balances
(C) Market sources to finance plan projects
(D) Other surplus States
(A) Central Govt. by wiping off budget deficit
(B) Reserve Bank to cover, deficit in daily balances
(C) Market sources to finance plan projects
(D) Other surplus States
Q66.Ways and Means advances taken by a State from the Reserve Bank are repayable within a period not exceeding........
(A) One month
(B) Three months
(C) Two months
(D) Net repayable
(A) One month
(B) Three months
(C) Two months
(D) Net repayable
Q67.Ways and means of Government means ______________.
A:-Income
B:-Expenditure
C:-Overdraft
D:-The method of maintaining the daily cash balance
A:-Income
B:-Expenditure
C:-Overdraft
D:-The method of maintaining the daily cash balance
Q68.Ways and means advances taken by a State from Reserve Bank are generally repayable within a period not exceeding
A:-One month
B:-Three months
C:-Two months
D:-Not repayable
A:-One month
B:-Three months
C:-Two months
D:-Not repayable
Q69.Methods of maintaining Government's daily cash balance at a level sufficient to meet its day to day requirements is termed as
A:-Cash position
B:-Ways and Means
C:-Appropriation
D:-Budget
A:-Cash position
B:-Ways and Means
C:-Appropriation
D:-Budget
Q70.The State Governments, in terms of their agreements with the Reserve Bank,obtain .............for replenishing their cash balances as and when necessary.
(A) Temporary loans
(B) Special advances
(C) Ways and Means advance
(D) Special cash assistance
(A) Temporary loans
(B) Special advances
(C) Ways and Means advance
(D) Special cash assistance
Q71.What is the maximum period within which a State Government has to repay the 'Special Ways and Means' advance taken from Reserve Bank of India?
A:-Three months
B:-Six months
C:-One year
D:-One month
A:-Three months
B:-Six months
C:-One year
D:-One month
Resource Operations
Q72.The process of distribution of funds so that all treasuries have at all times sufficient funds to meet the demands on them is called
(A) Resource Operations
(B) Fund distribution
(C) Currency distribution
(D) Fund management
(A) Resource Operations
(B) Fund distribution
(C) Currency distribution
(D) Fund management
Q73.The resource operations are carried out by :
(A) Director of Treasuries
(B) Currency Officer RBI
(C) Accountant General
(D) Finance Secretary
(A) Director of Treasuries
(B) Currency Officer RBI
(C) Accountant General
(D) Finance Secretary
Q74.Who is the authority controlling the Resource Operations of the State Government?
(A) Accountant General
(B) Comptroller and Auditor General
(C) Reserve Bank of India
(D) Director of Treasuries
(A) Accountant General
(B) Comptroller and Auditor General
(C) Reserve Bank of India
(D) Director of Treasuries
Q75.Resource operation includes:
(A) Distribution of funds to needy debts, from surplus ones
(B) The process of transfer of funds from surplus treasuries to deficit ones done by Currency Officer
(C) Raising of market loans to cover deficit in resources in the budget
(D) None of these
(A) Distribution of funds to needy debts, from surplus ones
(B) The process of transfer of funds from surplus treasuries to deficit ones done by Currency Officer
(C) Raising of market loans to cover deficit in resources in the budget
(D) None of these
Q76.The Resource operations are carried out by whom?
A:-Director of Treasuries
B:-Currency officer of the RBI
C:-Finance Department
D:-Accountant General
A:-Director of Treasuries
B:-Currency officer of the RBI
C:-Finance Department
D:-Accountant General
Q77.The cash balance of a Government comprises the balances in its account with:
(A) The Reserve Bank of India
(B) Balances at Treasuries
(C) RBI and the balances at the treasuries and sub-treasuries, where cash business is not conducted
(A) The Reserve Bank of India
(B) Balances at Treasuries
(C) RBI and the balances at the treasuries and sub-treasuries, where cash business is not conducted
Treasury Rules
3.28 The power to regulate the payments of money
into the Consolidated Fund, the Contingency Fund and the Public Account, the
withdrawal of moneys there from and the custody of moneys therein is vested in
Parliament or the Legislature of the State or the Legislature of the Union
Territory, as the case may be; pending legislation by the appropriate
Legislature, these matters are regulated by rules made in this behalf by the
President or the Governor of the State, or the Administrator of the Union
Territory. These rules are Central Government Account (Receipts and Payments)
Rules 1983 or State Treasury Rules as may be appropriate.
Treasuries
3.29 All the States mentioned in Para 3.6 are
divided into a number of ‘districts’ and at the headquarters of each district
there is a Government treasury called the ‘District-treasury’ with one or more
sub-treasuries
.
The treasuries situated in a State as are controlled by the
State Government, are called State Treasuries. The treasuries are the units of
the fiscal system and the points at which the public accounts start. Into these
treasuries are paid the receipts of Government and from them are disbursed the
payments on behalf of Government.
Generally, when any one has a payment to make to Government, he presents the money with a challan at a treasury and receives a receipt for it. When one has a payment to receive from Government, he presents at a treasury a receipts bill, or a cheque issued in his favour by a competent officer and obtains payment of it. Under the agreements made by the Central Government and each State Government (except Jammu and Kashmir and Sikkim) with the Reserve Bank of India, the general banking business of these Governments (in which business is included the receipt, collection, payment and remittance of moneys on behalf of the Treasury at every Station at which the Reserve Bank of India has its office or branch, at which there is a branch of the State Bank of India or its subsidiary, serving as its agent) is conducted in accordance with and subject to the provisions of the agreement and of the Reserve Bank of India Act, 1934 and such orders as may from time to time be given to the Bank by the Government concerned. The Union Government, as a general rule, operates on all offices and branches of the Reserve Bank of India, and on all branches of the State Bank of India, on the branches of the Subsidiary Banks of the State Bank of India authorized to transact Government business as agents of the State Bank of India and all other agencies throughout India acting as the agent of the Reserve Bank of India. The operations of each state are confined to the offices, branches and agencies of the two Banks which fall within the area of that particular State. This decentralization of treasury work is a feature of the Indian Financial System which should be clearly grasped at the outset as it conditions the whole of the subsequent arrangements. It is this feature of the Indian System which marks the essential difference from the financial system in England where the Public Receipts and Payments are all centralized at the Bank of England in London and there are no outlying State Treasuries.
.
Generally, when any one has a payment to make to Government, he presents the money with a challan at a treasury and receives a receipt for it. When one has a payment to receive from Government, he presents at a treasury a receipts bill, or a cheque issued in his favour by a competent officer and obtains payment of it. Under the agreements made by the Central Government and each State Government (except Jammu and Kashmir and Sikkim) with the Reserve Bank of India, the general banking business of these Governments (in which business is included the receipt, collection, payment and remittance of moneys on behalf of the Treasury at every Station at which the Reserve Bank of India has its office or branch, at which there is a branch of the State Bank of India or its subsidiary, serving as its agent) is conducted in accordance with and subject to the provisions of the agreement and of the Reserve Bank of India Act, 1934 and such orders as may from time to time be given to the Bank by the Government concerned. The Union Government, as a general rule, operates on all offices and branches of the Reserve Bank of India, and on all branches of the State Bank of India, on the branches of the Subsidiary Banks of the State Bank of India authorized to transact Government business as agents of the State Bank of India and all other agencies throughout India acting as the agent of the Reserve Bank of India. The operations of each state are confined to the offices, branches and agencies of the two Banks which fall within the area of that particular State. This decentralization of treasury work is a feature of the Indian Financial System which should be clearly grasped at the outset as it conditions the whole of the subsequent arrangements. It is this feature of the Indian System which marks the essential difference from the financial system in England where the Public Receipts and Payments are all centralized at the Bank of England in London and there are no outlying State Treasuries.
Note: - The
Governments of Jammu and Kashmir and Sikkim have not so far entered into
agreement with the Reserve Bank for the conduct of their treasury business by
the Bank.
Q78.State Treasuries are those controlled by:(A) State Government
(B) Reserve Bank of India
(C) Director of Treasuries
(D) Accountant General
Q79..Most of the receipts /payments on behalf of the Government originates in:
(A) Treasuries
(B) Reserve Bank of India
(C) State Bank of India
(D) None of the above
Q80. Which of the following are the units of the fiscal system and the points at which the public accounts start?
(A) The Reserve Bank of India and its branches
(B) The Treasuries
(C) The State Bank of India and its branches
(D) None of the above
Q81.he Reserve Bank acts as the Banker to the Central and State Govts. except the State of :
(A) Gujarat
(B) West Bengal
(C) Karnataka
(D) Sikkim
Q82.The receipts of Government are paid into:
(A) Finance Department
(B) Stock Exchanges
(C) Govt. Securities
(D) Treasuries
(B) Reserve Bank of India
(C) Director of Treasuries
(D) Accountant General
Q79..Most of the receipts /payments on behalf of the Government originates in:
(A) Treasuries
(B) Reserve Bank of India
(C) State Bank of India
(D) None of the above
Q80. Which of the following are the units of the fiscal system and the points at which the public accounts start?
(A) The Reserve Bank of India and its branches
(B) The Treasuries
(C) The State Bank of India and its branches
(D) None of the above
Q81.he Reserve Bank acts as the Banker to the Central and State Govts. except the State of :
(A) Gujarat
(B) West Bengal
(C) Karnataka
(D) Sikkim
Q82.The receipts of Government are paid into:
(A) Finance Department
(B) Stock Exchanges
(C) Govt. Securities
(D) Treasuries
Pay and Accounts Offices
3.30 Under the Scheme of departmentalisation of
accounts of the Union Government brought about in a phased manner from April
1976 separate Pay and Accounts Offices have been set up for the Central
Ministries/Departments of the Government of India, besides the Union
Territories of Delhi and Andaman and Nicobar Islands.
The Union Territories of Daman and Diu and Pondicherry have also their own Pay and Accounts offices functioning since their merge with the Indian Union Irrigation Projects etc. have arrangements similar to the Pay and Accounts system. Even in some State Capitals like Madras, Bombay, Hyderabad, Ahmedabad and Calcutta, there are Pay and Accounts Offices of the concerned States, which function in lieu of the District Treasuries.
The Union Territories of Daman and Diu and Pondicherry have also their own Pay and Accounts offices functioning since their merge with the Indian Union Irrigation Projects etc. have arrangements similar to the Pay and Accounts system. Even in some State Capitals like Madras, Bombay, Hyderabad, Ahmedabad and Calcutta, there are Pay and Accounts Offices of the concerned States, which function in lieu of the District Treasuries.
3.31 Ministries and Departments of the Central
Government shall, as a rule, operate on such offices and branches of the
Reserve Bank and or of their banks as have been, or may be nominated for
handling the receipts and payment transactions of the particular Ministry or
Department. The Heads of Departments/Administrations function as the Chief
Accounting Authorities and are responsible for all payment and accounting work
in their respective spheres, which are centralized in the Pay and Accounts
Offices. All payments are make by ‘cheques’ or ‘Bank drafts’ and all receipts
are also finally accounted for in the books of Pay and Accounts Offices. In
respect of the transactions relating to the Pay and Accounts Offices, taking
place at offices and agencies of the Reserve Bank, separate daily accounts are
rendered direct to the concerned Pay and Accounts office.
Transactions with other Governments
3.32 The Treasury Rules of each State Government
provide that moneys may be received and payments made on behalf of the State
Government, as well as Union Government including Union Territory Governments
and other State Governments. After the departmentalisation of accounts of the
Union Government, however, only certain limited category of transactions
relating to the Union Government are permitted to be routed through the State
Treasuries and such transactions are initially taken under ‘Suspense’ pending
settlement by cheque/Demand draft with the Pay and Accounts Officer of the
Ministry/Department concerned, by the State Accountant General. In respect of
transactions occurring in one state treasury on account of other states, they
are carried in the first instance against the balance of the State in which the
treasury is and the requisite money settlement between the Governments
concerned is subsequently initiated by the Accountant General through the
Central Accounts Section of the Reserve Bank, Nagpur. Transactions of State
Governments taking place in the Pay and Accounts Offices (PAO) of Central
Ministries/ Departments are initially carried against the balances of the Union
Government, pending adjustment between the balances of the Governments
concerned, by settlement through cheque/demand draft between the PAOs and
Accountant General or through the medium of the Central Accounts Section of the
Reserve Bank of India depending upon the nature of the transactions.
Note: - At
present only the Loans/Grants from the Central Government to the States and the
repayments of the loans and the interest by the State Governments to the Centre
are settled through the medium of the Central Accounts Section of the Reserve
Bank and in other cases, the system is of settlement by cheque/draft.
Initial Accounts
3.33 The initial accounts of receipts and
payments on behalf of the State Governments are maintained at the State
treasuries in the respective States who compile and render them monthly to
Accountant General concerned.
In the case of the certain large departments of the Governments like the Public Works and Forest, where the Divisions working under them have been vested with cheque drawing powers, the accounts of the moneys drawn are maintained by the Divisions themselves, who remit their receipts and surpluses periodically in lump sum into the treasuries. The Divisions render monthly to the respective Accountants General compiled accounts of the transactions including in them inter-alia, the total amount of cheques drawn/ money remitted into the Treasuries during the month under the relevant Remittance heads prescribed for the purpose. The contra debits/credits on account of the cheque paid/moneys received by the treasuries are included by the Treasuries in their initial accounts for the month rendered to the Accountants General. The pairing off of the credits/debits relating to cheques drawn and enchased and moneys remitted and brought to account by the treasuries are watched by the Accountant General concerned through appropriate subsidiary registers. In the case of Central Government and Union Territory Government following Pay and Accounts System, each office or branch of the Reserve Bank or other bank handling their transactions maintains separate accounts in respect of each Ministry and Department and render an account of the transactions to the Pay and Accounts Officer concerned at such intervals as may be prescribed by the Governments, together with all the supporting challans. Paid cheques. The transactions of Railways, Postal, Telecommunications and Defence Departments arising at offices and branches of the Reserve Bank and State Bank of India, acting as agent of the Reserve Bank, are distinguished from other Central transactions in the initial accounts and classified separately for each Railway, each Circle of Posts, each Accounts Officer of Telecommunication, and each Controller of Defence Accounts respectively so as to enable these transactions being taken against the Railway Fund, Postal Accounts, Telecommunication Account and Defence Account respectively, in the books of the Reserve Bank. Daily scrolls together with the requisite challans and paid cheques relating to the transactions pertaining to each one are furnished to the Accounts Officer concerned of the Railways, Posts, Telecommunications and Defence Departments, as the case may be.
In the case of the certain large departments of the Governments like the Public Works and Forest, where the Divisions working under them have been vested with cheque drawing powers, the accounts of the moneys drawn are maintained by the Divisions themselves, who remit their receipts and surpluses periodically in lump sum into the treasuries. The Divisions render monthly to the respective Accountants General compiled accounts of the transactions including in them inter-alia, the total amount of cheques drawn/ money remitted into the Treasuries during the month under the relevant Remittance heads prescribed for the purpose. The contra debits/credits on account of the cheque paid/moneys received by the treasuries are included by the Treasuries in their initial accounts for the month rendered to the Accountants General. The pairing off of the credits/debits relating to cheques drawn and enchased and moneys remitted and brought to account by the treasuries are watched by the Accountant General concerned through appropriate subsidiary registers. In the case of Central Government and Union Territory Government following Pay and Accounts System, each office or branch of the Reserve Bank or other bank handling their transactions maintains separate accounts in respect of each Ministry and Department and render an account of the transactions to the Pay and Accounts Officer concerned at such intervals as may be prescribed by the Governments, together with all the supporting challans. Paid cheques. The transactions of Railways, Postal, Telecommunications and Defence Departments arising at offices and branches of the Reserve Bank and State Bank of India, acting as agent of the Reserve Bank, are distinguished from other Central transactions in the initial accounts and classified separately for each Railway, each Circle of Posts, each Accounts Officer of Telecommunication, and each Controller of Defence Accounts respectively so as to enable these transactions being taken against the Railway Fund, Postal Accounts, Telecommunication Account and Defence Account respectively, in the books of the Reserve Bank. Daily scrolls together with the requisite challans and paid cheques relating to the transactions pertaining to each one are furnished to the Accounts Officer concerned of the Railways, Posts, Telecommunications and Defence Departments, as the case may be.
A statement
of the closing balance of the Central Government is sent each month by the
Central Accounts Section of the Reserve Bank to the Controller General of
Accounts indicating: -
(i) Central Government Account : Balance (in
respect of Central transactions and Union Territory Administrations dealt with
by Accountants General and of all Union Territory Governments with Legislature)
(ii) Railway Fund Balance
(iii) Postal Account Balance
(iv) Telecommunication Account Balance
(v) Defence Account Balance
(vi) Departmentalised Ministries Accounts
Balance (Which also includes transactions of Union Territories of Delhi and
Andaman and Nicobar Islands whose accounts have been separated)
(vii) Total
Classification, compilation and consolidation of Accounts
3.34 The compilation of Accounts from the point
at which the initial receipts and payments occur at the Pay and Accounts
Offices, Treasuries and other departmental offices so that at which they issue
in the form of a classified and consolidated account of the year’s transactions
for all the Governments in India are discussed in detail in other chapters.
Audit
3.35 The audit of the Comptroller and Auditor
General is comprehensive and includes
(a) Regularity Audit,(b) Propriety Audit and(c) Efficiency cum-Performance Audit.
As stated in Chapter 2 he is to uphold the Constitution and the laws made thereunder. He is, therefore, competent to challenge any sanction which in his opinion violates the provisions of the Constitution or the laws. He ascertains whether moneys shown in the accounts as having been disbursed were legally available for and applicable to the service or purpose to which they have been applied or charged, and whether the expenditure conforms to the authority which govern it. He examines the propriety of executive actions and looks beyond the formality of the expenditure to its wisdom, faithfulness and economy and brings to the notice of the Legislature cases of waste, loss, extravagant or nugatory expenditure and he is thus empowered to challenge any improper exercise of discretion and comment on the propriety of expenditure. In recent years, the technique of efficiency cum-performance audit has been attempted in the audit of development schemes. Audit examines how far the agency is adequately discharging its financial responsibility in regard to the various schemes undertaken by it and ascertains whether the schemes are being executed and their operations conducted economically and whether they are producing the results expected of them.
Audit of Public Debt
3.36 An important duty of Audit in relation to
borrowings is to see that the proceeds of loans are properly brought to account
and that they are expended only on objects for which the loans were originally
raised or to which borrowed moneys may properly be applied in accordance with
the sound principles of public finance.
Audit in relation to borrowings is to see what?
A:-The proceeds to loans are properly brought to account
B:-They are expended only on objects for which the loans were originally raised
C:-Whether adequate arrangements are made by Government for amortization of debt
D:-All the above
Answer:- Option-D
3.38 The results of all these audits are
incorporated in the Audit Reports of the Comptroller and Auditor General which
are submitted to the President or the Governor of the State or the Administrator
of the Union Territory as the case may be, for presentation to the concerned
Legislature. These Audit Reports bring out cases of significant variations from
the funds voted by the Legislature, excess over voted grants and charged
appropriations, expenditure on ‘New Service’ (not contemplated in the Budget),
irregular expenditure, losses, wasteful, infructuous or uneconomical
expenditure and comprehensive reviews about the performance of the development
programmes and schemes. They form the instruments through which the second
stage of Parliamentary control, viz. control over implementation of policies,
is exercised.
3.39 After the Audit Reports, Finance Accounts
and Appropriation Accounts have been placed before Parliament they are examined
by the Public Accounts Committee of Parliament set up under the Rules of
Procedure and Conduct of Business in the Lok Sabha.
Another Financial Committee called the Committee on Public Undertakings set up at Centre under the Rules of Procedure and Conduct of Business in the Lok Sabha examines the reports and accounts of the Public Sector Undertakings and also the Reports of the Comptroller and Auditor General on Public undertakings. Similarly in the State, the Audit Reports, Finance and Appropriation Accounts are examined by the State Public Accounts Committees consisting of members of the State Legislature, Quite a few State Legislatures have set up separate Committees on Public Undertakings of the States. The role and functions of the Financial Committees are discussed in detail in chapter 34.
Another Financial Committee called the Committee on Public Undertakings set up at Centre under the Rules of Procedure and Conduct of Business in the Lok Sabha examines the reports and accounts of the Public Sector Undertakings and also the Reports of the Comptroller and Auditor General on Public undertakings. Similarly in the State, the Audit Reports, Finance and Appropriation Accounts are examined by the State Public Accounts Committees consisting of members of the State Legislature, Quite a few State Legislatures have set up separate Committees on Public Undertakings of the States. The role and functions of the Financial Committees are discussed in detail in chapter 34.
1. The overall responsibility of coordination and control over finances of the Government in the States is confined to whom?
(A) State Finance Department
(B) Ministry of Finance
(C) Reserve Bank of India
(D) Accountant General
2. The process of distribution of funds for the purpose of maintaining sufficient funds in all the treasuries at all times, to meet the demands on them is referred to as
(A) Resource Operations
(B) Budget allocations
(C) Re-appropriation
(D) None of these
3. Special Ways and Means advances availed from Reserve Bank of India are generally repayable within what period?
(A) Not exceeding three months
(B) Not exceeding one month
(C) Not exceeding six months
(D) Not exceeding a year
4. CAG reports cases of waste, loss, extravagant or nugatory expenditure to which of the following?
(A) The Government
(B) The Legislature
(C) The Vigilance
(D) None of these
5. Who is the head of the Union Council of Ministers?
(A) President
(B) Prime Minister
(C) Home Minister
(D) None of these
6. The distribution of the Legislative Powers between the Union and the States is governed by which Article of the Constitution?
(A) Article 279
(B) Article 269
(C) Article 246
(D) None of these