CHAPTER I

OVERVIEW

The monthly accounts of the State Government are compiled and consolidated from the accounts submitted by the District Treasuries, Public Works and Forest Divisions, etc. to the Accountant General (Accounts and Entitlements). Besides, the Finance Accounts and the Appropriation Accounts are prepared annually by the Accountant General under the directions of the Comptroller and Auditor General of India in accordance with the requirements of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971.

The accounts of Government are kept in the following three parts:

Part I Consolidated Fund

Part II Contingency Fund

Part III Public Account

There are two main divisions under the Consolidated Fund:

The Revenue division (Revenue Account) deals with the proceeds of taxation and other receipts classed as revenue and the expenditure met therefrom, the net result of which represents the revenue surplus or deficit for the year.

In the Capital division, the section ‘Receipt Heads (Capital Account)’ deals with receipts of capital nature, which cannot be applied as a set off to capital expenditure. The section ‘Expenditure Heads (Capital Account)’ deals with expenditure met usually from borrowed funds with the object of increasing concrete assets of a material and permanent character. It also includes receipts of a capital nature intended to be applied as a set off to capital expenditure. The section ‘Public Debt, Loans and Advances, etc.’ comprises loans raised and their repayments by government such as ‘Internal Debt’ and ‘Loans and Advances’ made (and their recoveries) by government.

In the Contingency Fund, the transactions connected with Contingency Fund established under Article 267 of the Constitution of India are recorded.

In the Public Account, the transactions relating to ‘Debt’ (other than those included in Part I), ‘Deposits’, ‘Advances’, Remittances and ‘ Suspense’ are recorded.

Annual Accounts of the Government of Andhra Pradesh for the year 2006-2007 have recently been presented to the State Legislature. Audit Report of the Comptroller and Auditor General of India for the year 2006-2007 is being presented separately.

Finance Accounts

Finance Accounts present the accounts of receipts and disbursements of the government for the year together with the financial results disclosed by the revenue and capital accounts, the accounts of the public debt and the liabilities and assets as worked out from the balances recorded in the accounts.

During the year 2006-2007 total receipts amounted to Rs.52,249.09 crore comprising Rs.44,245.47 crore revenue receipts (Rs.32,792.20 crore tax revenue, Rs.6,487.83 crore non-tax revenue and Rs.4,965.44 crore grants-in-aid from Government of India) and Rs.8,003.62 crore capital receipts (Rs.471.34 crore towards recovery of loans and advances, Rs.5,642.96 crore on account of borrowings and other liabilities and Rs.1,889.32 crore in respect of MH 4000 – Misc. Capital Receipts).

Disbursements during the year were Rs.52,249.09 crore – Rs.41,438.40 crore (79.31%) on revenue account and Rs.10,810.69 crore (20.69%) on capital account, including disbursements of Rs.906.69 crore towards Loans and Advances.

In deviation from the prescribed accounting practice, an amount of Rs.1,889.32 crore relating to regularisation of land and property has been classified under Major Head 4000 – Miscellaneous Capital Receipts instead of under Revenue Receipts. This has resulted in under statement of Revenue Surplus to that extent. The receipts thus classified, wherever noticed, has been suitably indicated by footnotes in the relevant statements of Finance Accounts for 2006-07.

Appropriation Accounts

Appropriation Accounts bring out the expenditure of the State Government against amounts voted and charged by the State Legislature and supplement the Finance Accounts. These comprise accounts of 24 charged Appropriations and 40 voted Grants.

Appropriation Act, 2006-2007 had provided for a gross expenditure of Rs.68,349.67 crore. An amount of Rs.155.62 crore was projected as recoveries in reduction of expenditure.

Appropriation Accounts 2006-2007 disclosed that total gross expenditure was Rs.57,387.05 crore as against the budget provision of Rs.68,349.67 crore. There was a net saving of Rs.10,962.62 crore.

Recoveries in reduction of expenditure amounted to Rs.885.24 crore reflecting an increase of Rs.729.62 crore vis-a-vis budget estimates.

CHAPTER II

HIGHLIGHTS OF ACCOUNTS

(Rupees in crore)

Sl. No		B.E 2006-2007	Actuals	Percentage of Actuals to B.E	Percentage of Actuals to GSDP(260734($))
1.	Tax Revenue	31706.76	32792.20	103.42	12.58
2.	Non-Tax Revenue	5240.05	6487.83	123.81	2.49
3.	Grants-in-aid & Contributions	7384.35	4965.44	67.24	1.90
4.	Revenue Receipts (1+2+3)	44331.16	44245.47	99.81	16.97
5.	Recovery of Loans & Advances	1172.21	471.34	40.21	0.18
6.	Other Receipts	3050.00	1889.32	61.94	0.72
7.	Borrowings and other liabilities	8147.21	5642.96	69.26	2.16
8.	Capital Receipts (5+6+7)	12369.42	8003.62	64.70	3.07
9.	Total Receipts (4+8)	56700.58	52249.09	92.15	20.04
10	Non-Plan Expenditure (NPE)	33797.08	32637.94	96.57	12.52
11.	NPE on Revenue Account	32837.99	31919.68	97.20	12.24
12.	NPE on Interest Payments out of 11	7983.18	7280.29	91.20	2.79
13.	NPE on Capital Account	959.09	718.26	74.89	0.28
14.	Plan Expenditure (PE)	22903.50	19611.15	85.62	7.52
15.	PE on Revenue Account	12489.01	9518.72	76.22	3.65
16.	PE on Capital Account	10414.49	10092.43	96.91	3.87
17.	Total Expenditure (10+14)	56700.58	52249.09	92.15	20.04
18.	Revenue Expenditure (11+15)	45327.00	41438.40	91.42	15.89
19.	Capital Expenditure (13+16)(#)	11373.58	10810.69	95.05	4.15
20.	Revenue Surplus (4-18)*	(-)995.84	2807.07	281.88	1.08
21.	Fiscal Deficit (4+5+6-17)	8147.21	5642.96	69.26	2.16

(*) The Revenue Surplus is understated by Rs.1889.32 crore due to incorrect classification of sale proceeds of land and property under

MH4000 – Misc. Capital Receipts.

($) GSDP figure adopted is as per Economic Survey published by Planning Department of Government of Andhra Pradesh.

(#) Expenditure on Capital Account includes Capital Expenditure (Rs.9,904.00 crore) and Loans and Advances disbursed (Rs.906.69 crore).

Receipts and Disbursements

Total receipts during the year (excluding Borrowings and Other Liabilities Rs.5,642.96 crore) were Rs.46,606.13 crore, against which total disbursements were Rs.52,249.09 crore. The resulting deficit of Rs.5,642.96 crore is less by Rs.2,504.26 crore in comparison to Budget Estimates (Rs.8,147.21 crore).

The following table summarises the accounts for 2006-2007

(Rupees in crore)

Total Receipts	52249.09	Total Disbursements	52249.09
Revenue Receipts	44245.47 (84.68%)	Revenue Disbursements	41438.40 (79.31%)
Capital Receipts	8003.62 (15.32%)	Capital Disbursements	10810.69 (20.69%)

RECEIPTS

Revenue Receipts

Gross Tax Revenue of Rs.32,792.20 crore and Non-Tax Revenue of Rs.6,487.83 crore formed 12.58 per cent and 2.49 per cent respectively of the GSDP. Major contributors to revenue were Taxes on Taxes on Commodities and Services (Rs.25,025.12 crore – 9.60% of GSDP), Income and Expenditure (Rs.4,759.19 crore- 1.83% of GSDP) and Taxes on Property and Capital Transactions (Rs.3,007.89 crore – 1.15% of GSDP).

Non-Tax revenue during the year were more than the budget estimates by Rs.1,247.78 crore, mainly on account of good collection under various receipt heads. The increase was partly due to higher collection from Interest Receipts (Rs.2,231.17 crore – 0.86% of GSDP) Miscellaneous General Services (Rs.1,865.90 crore – 0.72% of GSDP) and Non-ferrous Mining & Metallurgical Industries (Rs.1,321.25 crore – 0.51% of GSDP). However, receipts under Miscellaneous General Services include debt and interest relief of Rs.1,186.31 crore given by the Ministry of Finance, Department of Expenditure on repayment of consolidated loan.

Share of various tax, non-tax revenue and grants-in-aid and contributions to total revenue receipts is given below:

Revenue Receipts and Grants-in-Aid and Contributions

(Rupees in crore)

Components	Actuals	Percentage to total Revenue Receipts
A. Tax Revenue	32792.20	74.12
Taxes on Income and Expenditure	4759.19	10.76
Taxes on Property and Capital Transactions	3007.89	6.80
Taxes on Commodities and Services	25025.12	56.56
B. Non-tax Revenue	6487.83	14.66
Interest Receipts, Dividends and Profits	2278.57	5.15
General Services	2037.00	4.60
Social Services	249.43	0.56
Economic Services	1922.83	4.35
C. Grants-in-aid and Contributions	4965.44	11.22
TOTAL-REVENUE RECEIPTS	44245.47	100.00

Capital Receipts

Compared to the Budget estimates of Rs.12,369.42 crore, the actual receipts were Rs.8,003.62 crore resulting in an overall shortfall of Rs.4,365.80 crore. Borrowings was less by Rs.2,504.26 crore against Budget Estimates, inter-alia other receipts and recovery of loans and advances.

DISBURSEMENTS

Revenue Disbursements

Revenue Disbursement was 15.89 per cent of GSDP. It was less than budget estimates by Rs.3,888.60 crore of which Rs.918.31 crore was less under Non-plan Expenditure and Rs.2,970.29 crore less under Plan Expenditure.

Capital Disbursements

Capital Disbursements were 4.15 per cent of the GSDP. It was less than budget estimates by Rs.562.89 crore due to less disbursement of Rs.322.06 crore under Plan Expenditure and Rs.240.83 crore less under Non-plan Expenditure.

Plan Disbursements

During the year 2006-2007, Plan Disbursements were Rs.19,611.15 crore consisting of Rs.18,120.56 crore under State Plan, Rs.1,307.04 crore under Centrally Sponsored Plan and Rs.183.55 crore under Loans advanced by the State Government out of which Rs.91.90 crore was disbursed under State Plan and Rs.91.65 crore pertains to Centrally Sponsored Plan.

Non-Plan Disbursements

Non-plan Disbursements during 2006-2007 were Rs.32,637.94 crore, consisting of Rs.31,919.68 crore under Revenue Expenditure and Rs.718.26 crore under Capital Expenditure.

Sectoral distribution of expenditure and its percentage to total revenue expenditure (Rs.41,438.40 crore) is given in the following table.

(Rupees in crore)

Components	Amount	As % of Total Revenue Expenditure
A. Fiscal Services	606.42	1.46
(i) Collection of Taxes on Property and Capital transactions	121.64	0.29
(ii) Collection of Taxes on Commodities and Services	395.61	0.95
(iii) Other Fiscal Services	89.17	0.22
B. Organs of State	360.64	0.87
C. Interest Payments and Servicing of debt	7493.78	18.09
D. Administrative Services	2702.21	6.52
E. Pensions and Miscellaneous General Services	4150.92	10.02
F. Social Services	15369.33	37.09
G. Economic Services	10510.27	25.36
H. Grants-in-aid and Contributions	244.83	0.59
Total Expenditure (Revenue Account)	41438.40	100.00

TREND OF EXPENDITURE

Trend of expenditure in some important sectors between 2002-2003 and 2006-2007 (5 years) is brought out in the following table.

Statement of Revenue Expenditure in Selected Sectors

(Rupees in crore)

Sector	2002-2003 % to B.E/R.E	2003-2004 % to B.E./R.E	2004-2005 % to B.E./R.E.	2005-2006 % to B.E./R.E.	2006-2007 % to B.E./R.E.
A. Social Services
i) Education	4025.74 89.00/98.66	4665.77 91.96/100.35	4592.76 83.42/85.30	5337.53 91.10/84.10	6035.62 85.31/85.62
ii) Health & Family Welfare	1344.60 89.75/100.19	1476.08 90.11/89.89	1487.07 90.68/88.74	1616.47 91.03/94.11	1853.93 90.48/91.57
B. Economic Services
i) Agriculture	871.14 91.30/95.82	1083.69 95.90/98.05	1196.11 79.62/80.62	1199.82 82.07/82.83	1438.12 86.43/86.93
ii) Rural Development	1043.84 93.74/101.83	1595.72 82.41/97.95	1620.85 92.78/91.78	1691.26 104.78/97.77	2445.95 89.66/92.67
iii) Irrigation & Flood Control	1762.41 86.82/90.28	1875.34 91.97/93.96	1921.37 89.81/84.48	2620.41 92.16/81.77	3176.55 73.40/70.30
iv) Energy	1645.11 87.34/100.53	1644.42 94.68/95.15	1896.08 91.92/95.96	1801.40 100.07/102.81	1601.12 101.55/117.67
v) Transport	591.99 98.25/101.22	561.21 87.67/106.61	570.18 88.30/98.36	1040.78 159.31/139.00	1134.25 123.85/105.47
vi) General Economic Services	295.89 89.25/95.36	382.64 89.03/111.25	269.36 55.59/50.47	429.49 78.10/76.27	474.93 82.76/82.74

DEBTS AND LIABILITIES

Outstanding Public Debt at the end of 2006-2007 was Rs.45,255.95 crore, comprising internal debt of Rs.30,086.82 crore and loans and advances from Central Government of Rs.15,169.13 crore and other liabilities accounted under Public Account are Rs.41,366.24 crore.

The State also acts as a banker and trustee in respect of deposits like small savings, provident funds and deposits. There was an overall increase of Rs.6,775.38 crore in respect of such liabilities of State Government during 2006-2007.

Interest payments on debt and other liabilities totaling Rs.7,280.29 crore constituted 17.57 percentage of revenue expenditure of Rs.41,438.40 crore. Interest payments on public debts were Rs.6,817.03 crore (Internal debt Rs.5,569.77 crore, loans and advances from Central Governments Rs.1,247.26 crore) and Rs.463.26 crore on other liabilities. Expenditure on account of interest payments increased by Rs.272.19 crore during 2006-2007 as compared to previous year.

Entire amount of Internal debt of Rs.4,235.65 crore raised during 2006-2007 was mainly utilized towards (i) Interest payment of Rs.1,173.12 crore and (ii) discharge of debt obligations of Rs.3,062.53 crore.

INVESTMENTS AND RETURNS

Total investments as share capital in non-financial public sector undertakings (PSUs) stood at Rs.5,776.17 crore at the end of 2006-2007. Dividends received during the year were Rs.47.40 crore (i.e., 0.82%) on investment. During 2006-2007, while investments increased by Rs.60.28 crore, over the previous year, the dividend income increased by Rs.1.52 crore.

LOANS AND ADVANCES BY THE STATE GOVERNMENT

Total loans and advances made by the State Government at the end of 2006-2007 is Rs.10,648.15 crore. Recovery of principal amount aggregating Rs.12,028.71 crore and interest on loan amounting to Rs.4,383.25 crore is in arrears at the end of 31 March 2007.

Loans and advances to Government Corporations/Companies, non-Government Institutes, Local bodies, etc. at the end of 2006-2007 is Rs.10,442.84 crore.

FINANCIAL ASSISTANCE TO LOCAL BODIES AND OTHERS

Assistance to local bodies etc during 2006-2007 was Rs.9,933.07 crore. It increased from Rs.8,100.88 crore in 2002-2003 to Rs.9,933.07 crore in 2006-2007, i.e., a 22.62 per cent increase in the last five years. The grants given to Zilla Parishads, Panchayat Samitis and Municipalities (Rs.1,543.25 crore) were about 15.54 per cent of total grants given during the year.

APPROPRIATION ACCOUNTS

The Appropriation Accounts of the Government of Andhra Pradesh for the year 2006-2007 present the accounts of sums expended in the year ended 31 March 2007, compared with the sums specified in the Schedules appended to the Appropriation Acts passed under Article 204 and 205 of the Constitution of India.

The Appropriation Accounts show that in the year 2006-2007, there was actual expenditure of Rs.57,387.05 crore, comprising Rs.42,194.52 crore Revenue Expenditure, Rs.10,033.12 crore Capital Expenditure, Rs.4,252.72 crore Repayment of Debt, and Rs.906.69 crore Loans and Advances by the State Government.

Summary of Appropriation Accounts 2006-2007

(Rupees in crore)

Sl. No.	Nature of expenditure	Original grant	Supplementary grant	Re-appropriation	Total	Actual expenditure	Savings(-) Excesses(+)
1	Revenue Voted Charged	37402.38 8076.59	3319.11 7.60	(-)3814.62 (-)709.83	36906.87 7374.36	34836.08 7358.44	(-)2070.79 (-)15.92
2	Capital Voted Charged	9943.06 125.94	1235.69 14.38	(-)602.50 (-)1.55	10576.25 138.77	9952.70 80.42	(-)623.55 (-)58.35
3	Public Debt Charged	6827.16	…	(-)2573.76	4253.40	4252.72	(-)0.68
4	Loans and Advances Voted	1308.22	89.52	(-)465.53	932.21	906.69	(-)25.52
	Total	63683.35	4666.30	(-)8167.79	60181.86	57387.05	(-)2794.81

Details of persistent savings in a few selected grants/appropriations are given below:

TREND OF EXPENDITURE ON SELECTED GRANTS SHOWING PERSISTENT SAVINGS

Year	Grant no.	Total allocation (rupees in crore)	Percentage of savings
2002-03	X. Fiscal Administration	16825.10	(-)2.39
	XXIX. Labour and Employment	75.16	(-)16.27
	XXX. Social Welfare	668.74	(-)14.80
	XLIII. Co-operation	183.02	(-)9.33
	XLIV and XLV. Rural Development	2666.82	(-)28.88
	XLVI. Major Irrigation, Drainage and Flood Control	3033.54	(-)9.11
	L. Industries	318.13	(-)27.83
2003-04	XX. Labour and Employment	77.27	(-)3.11
	XXX. Co-operation	99.48	(-)5.46
	XXXII Rural Development	775.61	(-)16.06
	XXXVI. Industries and Commerce	156.55	(-)0.39
2004-05	X. Fiscal Administration	21313.11	(-)14.78
	XX. Labour and Employment	150.82	(-)8.64
	XXI. Social Welfare	885.00	(-)12.01
	XXVIII Animal Husbandry and Fisheries	223.97	(-)12.14
	XXX. Co-operation	466.66	(-)9.40
	XXXII Rural Development	748.03	(-)17.25
	XXXIII. Major and Medium Irrigation	5563.43	(-)10.55
	XXXVI. Industries and Commerce	179.03	(-)27.08
2005-06	IX Fiscal Administration, Planning, Surveys, Statistics	22183.51	(-)26.35
	XI Roads, Buildings and Ports	2044.07	(-)3.98
	XX Labour and Employment	154.42	(-)3.58
	XXI Social Welfare	1032.91	(-)37.14
	XXX Co-operation	181.03	(-)45.96
	XXXIV Minor Irrigation	634.10	(-)34.49
	XXXVI Industries and Commerce	418.91	(-)37.35
2006-07	IX Fiscal Administration, Planning, Surveys, Statistics	20081.01	(-)16.85
	XI Roads, Buildings and Ports	2105.49	(-)1.55
	XVI Medical and Health	2165.03	(-)13.60
	XXII Tribal Welfare	739.12	(-)27.58
	XXX Co-operation	227.76	(-)15.31
	XXXIII Major and Medium Irrigation	12619.72	(-)12.59
	XXXVI Industries and Commerce	443.86	(-)38.50

RECONCILIATION OF ACCOUNTS

Accuracy and reliability of accounts depend, among other things, on timely reconciliation of the departmental figures with the accounts figures.

Before annual accounts are finalised, the Heads of the Departments reconcile the departmental accounts figures with those booked in accounts compiled by the Accountant General. The reconciliation of accounts figures is to be done monthly but in the year 2006-2007, there was delay in reconciliation of the accounts by the departmental authorities.

A list of departments/controlling officers who persistently defaulted in reconciliation for the past several years is brought out below.

Sl.No.	Name of the Department/Chief Controlling Officer	Year/Years pending
1.	Secretary, Environment, Forest, Science & Technology	1997-98 to 2006-07
2.	Secretary, Finance	1997-98 to 2006-07
3.	Secretary, Food and Civil Supplies	1997-98 to 2006-07
4.	Secretary, Home	1997-98 to 2006-07
5.	Secretary, Irrigation and Command Area Development	2000-01 to 2006-07
6.	Secretary, Industries and Commerce	1997-98 to 2006-07
7.	Secretary, Planning	1997-98 to 2006-07
8.	Secretary, Revenue	1997-98 to 2006-07 (except 2000-01)
9.	Secretary, Secondary Education	1998-99 to 2006-07
10.	Secretary, Social Welfare	1998-99 to 2006-07
11.	Secretary, State Roads Department	1996-97 to 2006-07 (except 1998-99 to 2000-01)
12.	Secretary, Women Development, Child Welfare and Welfare of Disabled	1997-98 to 2006-07
13.	Secretary, Health, Medical & Family Welfare	1997-98 to 2006-07
14.	Chief Election Officer	2000-01 to 2006-07
15.	Commissioner, Land Administration	1999-00 to 2006-07
16.	Secretary, Energy Department	1999-00 to 2006-07
17.	Secretary, Tribunal for Disciplinary Proceedings	1997-98 to 2006-07 (except 2001-02 to 2003-04)
18.	Director, Protocol	1999-00 to 2006-07

SUBMISSION OF ACCOUNTS BY TREASURIES

The rendition of initial accounts by the Treasuries is satisfactory. The maximum delay in receipt of accounts from some treasuries during the year was 15 days. However, 10 Public Works Divisions have submitted their accounts very late in different months during the year. The delay ranged from 16 to 241 days. The fact of late receipt/non-receipt of monthly accounts was brought to the notice of the concerned authorities, as and when the delay occurred.

CHAPTER III

TRENDS IN GOVERNMENT REVENUE AND EXPENDITURE

Trends in Government Revenue Receipts and Revenue Expenditure from 2002 to 2007 (5 years period) is given below.

Revenue Receipts (Rupees in crore)

Year	Tax Revenue	Non-Tax Revenue	Grants-in-aid and Contributions	Gross Revenue Receipts	GSDP	Percentage of Gross Revenue Receipts to GDP
2002-03	16933.37	3529.41	2540.14	23002.92	160753.27(A)	14.31
2003-04	18874.46	3604.65	4389.39	26868.50	177883.00(A)	15.10
2004-05	22313.01	3755.57	2680.92	28749.50	199075.00(A)	14.44
2005-06	26158.26	4691.37	4001.56	34851.19	225892.00(A)	15.43
2006-07	32792.20	6487.83	4965.44	44245.47	260734.00(A)	16.97

(A) Advance

Revenue Expenditure

(Rupees in crore)

Year	Revenue Expen-diture	Total Expen-diture	GSDP	Percentage increase			Percentage of Government Expenditure to GSDP
				Revenue Expen-diture	Total Expen-diture	GSDP
2002-03	26056.89	*38596.95	160753.27(A)	5.38	(-)9.71	3.30	24.01
2003-04	29830.14	35574.64	177883.00(A)	14.48	(-)7.83	10.65	20.00
2004-05	31307.34	38314.71	199075.00(A)	4.95	7.70	11.91	19.25
2005-06	34915.30	43333.47	225892.00(A)	11.53	13.10	13.47	19.18
2006-07	41438.40	52249.09	260734.00(A)	18.68	20.57	15.42	20.04

(A) Advance

(*) These figures include expenditure on Public Debt (2002-03 Rs.7,508.54 crore)

The overall increase in the Government’s total expenditure during 2006-2007 compared to 2002-2003 (5 years) has been Rs.13,652.14 crore. Expenditure pattern in major areas of Revenue Expenditure is shown in the following table:

Increase/decrease of expenditure in major areas of Revenue Expenditure

Areas of expenditure	Decrease/Increase over the previous year (in crores rupees)					% of increase/ decrease in 2006-2007 over last year’s expenditure
	2002-03	2003-04	2004-05	2005-06	2006-07
Interest Payments and Servicing of Debt	1455.58	725.22	235.47	116.35	286.02	3.97
Education, Sports, Art and Culture	231.54	640.03	(-)73.01	744.77	698.09	13.08
Water Supply, Sanitation, Housing and Urban Development	98.92	322.76	199.09	655.40	684.10	35.02
Social Welfare and Nutrition	101.33	119.78	300.49	79.97	1028.81	58.42
Agriculture and Allied Activities	110.14	212.55	112.42	3.71	238.30	19.86
Irrigation and Flood Control	178.04	112.93	46.03	699.04	556.15	21.22
Industry and Minerals	27.61	18.26	(-)26.10	72.51	(-)22.21	(-)8.73

GOVERNMENT ACCOUNT

The total expenditure (Revenue and Capital) for the year is netted against total receipts (Revenue and non-debt Capital receipts) of the year and the surplus/deficit thereof is transferred to a separate ledger called “Government Account”. In addition, net effect of Prior Period Adjustments, Miscellaneous Government Accounts, etc. is also transferred to the ledger “Government Account”. Thus, the ledger “Government Account” represents the cumulative surplus/deficit of the operations of the Government. The details of the ledger “Government Account” for the past five years are given below.

(Rupees in crore)

Year	Revenue Heads			Capital Heads			Other Heads (#)	Deficit for the year	Cumulative deficit/surplus at the end of the year
	Receipts	Disbursements	Deficit/ Surplus	Receipts (Non-debt)	Disbursements	Deficit/ Surplus	Deficit/ Surplus
2002-03	23002.92	26056.89	(-)3053.97	…	3796.07	(-)3796.07	(-)0.08	(-)6850.12	(-)45697.68
2003-04	26868.50	29830.14	(-)2961.64	…	4250.87	(-)4250.87	…	(-)7212.50	(-)52910.19
2004-05	28749.50	31307.34	(-)2557.84	…	5414.23	(-)5414.23	…	(-)7972.07	(-)60882.26
2005-06	34851.19	34915.30	(-)64.11	…	7661.68	(-)7661.68	…	(-)7725.79	(-)68608.05
2006-07	44245.47	41438.40	2807.07	1889.32($)	9904.00	(-)8014.68	…	(-)5207.61	(-)73815.66

(#) Miscellaneous Government Account.

($) Represents sale proceeds of land and property, incorrectly classified under Capital Receipts instead of under Revenue Receipts.

LIABILITIES

Liabilities of the State Government increased by Rs.31,791.53 crore from Rs.54,830.66 crore in 2002-2003 to Rs.86,622.19 crore during 2006-2007. Public debt comprising internal debt of the State Government and loans and advances from the Central Government increased by Rs.6,075.71 crore from Rs.39,180.24 crore in 2002-2003 to Rs.45,255.95 crore at the end of the current year. Article 293 of the Constitution of India empowers the State Government to borrow on the security of the Consolidated Fund of the State within such limits, if any, as may be from time to time fixed by the State Legislature. Details of the Public Debt and total liabilities of the State Government are as under:

(Rupees in crore)

Year	Internal Debt	Loans & Advances from Central Government	Total Public Debt	Small Savings and Provident Funds	Other Obliga-tions(*)	Total Liabilities	GSDP	% of total liability to GDP
2002-03	19891.32	19288.92	39180.24	10903.07	4747.35	54830.66	160753.27(A)	34.11
2003-04	25175.71	18706.39	43882.10	14888.15	5775.19	64545.44	177883.00(A)	36.29
2004-05	30153.33	16129.14	46282.47	20110.71	7895.22	74288.40	199075.00(A)	37.32
2005-06	28913.70	16044.75	44958.45	25449.07	9141.79	79549.31	225892.00(A)	35.22
2006-07	30086.82	15169.13	45255.95	30165.45	11200.79	86622.19	260734.00(A)	33.22

(*)Non-interest bearing obligations such as deposits of Local Funds, Other earmarked funds, etc.

(A) Advance Estimates

STATE PROVIDENT FUND

The details of transactions from the State Provident Fund are shown in the following table.

(Rupees in crore)

Year	Opening Balance	Receipts .	Payments	Net accretion for the year	Closing Balance	Interest charged on balance of P.F
2002-03	2682.09	1006.72	713.25	293.47	2975.56	228.51
2003-04	2975.56	1085.48	750.54	334.94	3310.50	247.49
2004-05	3310.50	1057.46	798.94	258.52	3569.02	253.02
2005-06	3569.02	1167.07	794.87	372.20	3941.22	273.23
2006-07	3941.22	1441.38	917.66	523.72	4464.94	331.53

GUARANTEES

The position of guarantees by the State Government for the payment of loans and capital and payment of interest thereon raised by Statutory Corporations, government companies, Corporations, Cooperative Societies, etc. is given below.

(Rupees in crore)

At the end of the year	Amount Guaranteed (Principal only)	Amount outstanding Principal Interest
2002-03	24810.32	15317.06	883.48
2003-04	29545.13	17427.15	756.80
2004-05	28164.93	17893.21	807.81
2005-06	30200.10	17711.05	779.16
2006-07	29160.39	18018.32	864.44

WAYS AND MEANS ADVANCES

The State Government, in order to maintain and sustain its liquidity position, takes Ways and Means Advances from the Reserve Bank of India and thereafter, draws upon overdraft whenever there is shortfall in the agreed minimum cash balance in its account with the Reserve Bank of India. The State Government is required to maintain a minimum cash balance of Rs.3.32 crore on all days with Reserve Bank of India. The larger the amount and greater the number of times such ways and means advances are taken (Operative limit of Rs.880 crore) or overdrawals made, the more it reflects on the adverse position of the cash balance of the State Government.

During the year 2006-2007 the State Government was able to maintain the minimum balance on each day of the year i.e., all the 365 days. As such there was no necessity for State Government to resort to Ways and Means Advance and Overdraft from Reserve Bank of India, Nagpur.

	2002-03	2003-04	2004-05	2005-06	2006-07
i) Number of days on which minimum balance was maintained
a) Without obtaining any advance	195	154	365	365	365
b) By obtaining Ways and Means Advance	137	181	Nil	Nil	Nil
ii) Number of days on which overdraft was taken	33	31	Nil	Nil	Nil

GENERAL CASH BALANCES

The Cash Balance with Reserve Bank of India decreased from Rs.(-)88.90 crore at the beginning of the year 2006-2007 to Rs.(-)280.84 crore at its end, the details of sources and application of funds being as follows:

Cash Flow Statement

(Rupees in crore)

SOURCES			APPLICATION
Sl. No.	Items	Amount	Sl. No.	Items	Amount
1	Opening Cash Balance	(-)88.90	1	Revenue Expenditure Non-Plan Plan Total	31919.68
2	State’s Share of Union Taxes	8866.00			9518.72
					41438.40
3	State’s own revenue collection	30414.03	2	Capital Expenditure Non-Plan Plan Total	(-)4.89
4	Central grants/ assistance other than loans	4965.44			9908.89 9904.00
5	Miscellaneous receipts (MH 4000 - Misc. Capital Receipts	1889.32	3	GOI Loans and Advances repaid	1190.19
6	Net Receipts from Internal Debt, Small Savings, Deposits and Advances (Other than Central Loans)	7930.84	4	Loans and Advances given	906.69
			5	Net effect of adjustment of Suspense & Remittance balances and increase of Reserve Fund	1604.72
7	Receipts from Central Loans	314.57	6	Closing cash balance	(-)280.84
8	Net contribution from Contingency Fund	0.52
9	Recoveries from Borrowers	471.34
	Total	54763.16		Total	54763.16

The closing cash balance of Rs.(-)280.84 crore is inclusive of general cash balance of Rs.(-)287.61 crore, deposits with other banks of Rs.1.34 crore and remittances in transit of Rs.5.43 crore The closing cash balance according to the Reserve Bank of India was Rs.174.55 crore (debit) against the general cash balance of Rs.287.61(credit) reflected in State Govt. accounts. The Net difference of Rs.113.06 (credit) crore is under reconciliation.

Investments held in the Cash Balance Investment Account as on 31 March 2007 were Rs.3409.19 crore.

Other cash balances and investment comprising cash with departmental officers (Rs.0.92 crore), permanent advances with departmental officers (Rs.1.36 crore) and investment of earmarked funds (Rs.1,775.73 crore) as on 31 March 2007, were Rs.1,778.01 crore.

CONTINGENCY FUND

Contingency Fund of the State with a corpus of Rs.50 crore is designed to meet contingencies. The following details will indicate the extent of use of this Fund during the year

	2002-03	2003-04	2004-05	2005-06	2006-07
Number of withdrawals from Contingency Fund	233	243	115	115	108
Total withdrawals from Contingency Fund (Rs in crore)	25.07	32.06	24.17	4.99	6.91
Withdrawals from Contingency Fund as a percentage to Total Budget provision	0.07	0.08	0.05	0.01	0.01

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