Budget Glossary #1: The Annual Financial Statement

The annual financial statement temporally presents the finances of the government, and is a part of the Budget

The Annual Financial Statement is the set of documents provided by the government through the Ministry of Finance which is tabled before the Lok Sabha. It shows the expenditure and income and expenditure under the following heads :

  1. The actuals for one financial year (FY) preceding that in which the budget is presented. For example, in the upcoming budget for FY21, the AFS will show the actuals incurred in FY19, since actuals are only available after the financial year ends.
  2. The budgeted estimates for FY20, as presented by the Finance Minister
  3. The Revised Estimates of FY20, or the revised budget estimates, showing estimates of the on-going financial year. This shall include the funds allocated to different ministries in the course of the year in addition to the budget estimate.
  4. The budgeted estimates for the upcoming year FY21

The receipts and disbursements are shown under the three primary accounts that make up the AFS:

  1. The Consolidated Fund of India: Which holds the governments tax receipts, revenue, dividends and raised loans; and bears all of the government's expenditures. No funds can be used by the government from here without Parliament's authorisation.
  2. The Contingency Fund Of India: This fund holds a corpus of ₹500 crores, and is at the disposal of the President of India to meet any unforeseen or emergency expenditure to be incurred by the government. The Contingency Fund later recoups the expenditure from the Consolidated Fund after Parliamentary approval
  3. Public Accounts: It includes those funds which is held by the government, but do not belong to it. Provident funds, funds for expenditure on specific objects such as roads and education are examples of deposits in the public funds. The government has to finally repay the original depositors, with Parliamentary approval not required for the same.

Updated On: 2020-01-29T20:39:36+05:30
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