Budget 2023: All About Annual Financial Statement And Its Purpose
Union Budget 2023-24 is scheduled to be presented in the Parliament by Union Finance Minister Nirmala Sitharaman on February 1. Besides the annual Budget speech delivered by the Finance Minister, 14 budget documents are the important parts of the Union Budget.
This includes the Annual Financial Statement (AFS), which is the main budget document. It states the estimated receipts and expenditure of the government of India for the current financial year.
What is an Annual Financial Statement (AFS)?
Article 112 of the Constitution of India requires a statement to be presented before the parliament mentioning the estimated receipts and expenditures of the government for every financial year. The Annual Financial Statement shows the data in three parts - the Consolidated Fund, the Contingency Fund, and the Public Account.
The Consolidated Fund consists of all revenue receipts by the government, loans it raised, and receipts from the recovery of loans. The government uses this fund for all its expenditure and no amount can be withdrawn from it without the approval of the Parliament.
On the other hand, the Contingency Fund is used by the government to meet unforeseen expenses. It is at the disposal of the President of India. Union Budget 2021-22 proposed the corpus of the Contingency Fund be increased from Rs 500 crore to Rs 30,000 crore.
The Public Account has funds that are used to carry out transactions relating to small savings, provident funds, and on specific purposes such as road development and primary education, among others. The parliamentary authorisation is not required for withdrawal from this account. Public Account funds do not belong to the government and should be paid back to the persons and authorities, who deposited them.
What is the purpose of the Annual Financial Statement?
The Annual Financial Statement is aimed at distinguishing between the government's expenditure on the revenue account and expenditure on other accounts. The Union Budget comprises the Revenue and Capital sections. The estimates of receipts and disbursements mentioned in the AFS are the net refunds and recoveries.
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