SDH Overview & Protection Schemes

For BSNL internal circulation only.

E2-E3

Management

Capital Budgeting and Revenue

Budgeting


WELCOME

• This is a presentation for the E2-E3

Management Module for the Topic:

Capital Budgeting and Revenue Budgeting

• Eligibility: Those who have got the

Upgradation to from E2 to E3.

• This presentation is last updated on 15-3-

2011.

• You can also visit the Digital library of

BSNL to see this topic.


AGENDA

• Scope of Revenue & Capital Budgeting

• Classification of items of expenditure under

Capital and Revenue

• Revised Estimate & Budget Estimate (REBE)

• Guidelines for preparation of REBE

• Control of Expenditure

• Fleet Card


BUDGET : ITS IMPORTANCE AND MEANING

•Planning is essential for every enterprise to its

success.

•The Budget operationalise the plan and lays down

the path to be followed for the achievements of the

planned objectives.

•It contains quantitative, financial as well as non-

financial results to be expected in future.


BUDGET : ITS IMPORTANCE AND MEANING

•It spells the mechanism for laying down the standards,

achieving and implementing plans and also provides

feed back on the attainment or otherwise of the planned

targets and standards.


BUDGET: ITS IMPORTANCE AND MEANING

•Classification on the nature of activities –

•Capital or Revenue.

•Capital - Planning for the acquisition or

constructions of infrastructure like Bldg.,

Machinery and Projects having a longer life.

•Revenue - Planning for activities of a recurring

nature for the purposes of maintenance

of infrastructure


TYPES OF BUDGET IN BSNL

1. Capital Budgeting

2. Revenue Budgeting

3.Revenue Budgeting

4.

5.Revenue Budgeting


Revenue Budget

• Scheduled date for submission of Budget

statement from SSA-Circle-Corporate Office

• Revised Estimate - Actual Expenditure for

first 5 months & Anticipated Expenditure for

remaining 7 months of current Financial year.

• Budget Estimate – Proposed expenditure for

the ensuing financial year (12 Months)


REBE for 2010-11 & 2011-12 to be prepared by SSA

in Sept-2010

1. Budget (Original) Allotment 1200

2. Actual Expdt. for first 5 months 800

(April 2010 to August 2010)

3. Anticipated Expdt. for next 7 months 700

(Sept-2010 to March-2011)

4. RE for 2010-11 (2+3) 1500

5. Variation between (1) & (4) 300

6. BE for 2011-12 (12 Months) 2000


Guidelines for Preparation of RE and BE:

1. The figures should be in Thousands of Rupees for

Working

Expenses and in Lakhs of Rupees for Revenue

Receipts.

2. Column heads should be entered fully and clearly

in all the

pages.

3. The particulars should be furnished object-wise.



4. The Estimates should be projected on realistic

basis, to

finalize cash flow efficiently.

5. In case, any additional allotment is authorized after

Budget

Allotment, the same must be shown in the relevant

column of the Statements.

6. The economy instructions for keeping the

expenditure controlled issued from time to time

must be kept in view while framing the estimates

7. Estimates of License Fee and Spectrum Charges.



8. The requirement under pension contribution and

leave salary contribution for the staff and officers.

9. There is very limited scope of additional allotment at

RE stage under Working Expenses.

10. OTA particularly, no additional funds be sought.



11. No provision may be made in RE BE for Honorarium for

general purpose. However, if any Circle/Unit requires

allotment under honorarium on account of item of work for which rate of honorarium has been fixed such as payment for setting of questions papers, Election duty for membership verification, completion of departmental enquiries, arbitration cases, it will be considered as and when they are demanded.

12. If increase in allotment in any object is sought from BSNL CO,

full justification may be furnished along with matching

savings.

13. The IFAs of the circles are required to ensure the above while

forwarding the Revised Estimates.


Revenue Receipts:

1. The estimates of Revenue may be worked out on the

basis of number of telephone lines, WLL lines and

CMTS working as well as proposed to be given (as

per target fixed by Corporate Office/Circle) and by

applying average Revenue per such line.

2. The Estimates in prescribed Annexure should be

framed duly supported by a statement showing the

detailed calculation separately for urban/rural, CMTS

and other schemes.

3. Revised Estimates for the current year and the

Budget Estimates for the next year have been

worked out.


Capital Budget:

Allotment of Funds under Capital Works:

Every year, proposals in respect of various components are

to be forwarded by each circle in prescribed formats to

Planning Branches of BSNL Corporate Office.

Subsequently all these branches of BSNL Corporate Office

assess/recommend and project a consolidated demand in

respect of all the circles to the Capital Budget Section of

BSNL Corporate office for allotment of funds.


CAPITAL BUDGET

Compilation of Capital Works Programme:

Capital works programme shall be compiled only for works

costing Rs.20 crores and above instead of Rs. 5 crores and

above (previously).

The details are to be submitted to BBF (Budget & Banking

Finance) division of Corporate Office by the respective

Circles every year in the prescribed format

Corporate Office will monitor the progress of ongoing and

new projects costing more than 20 Crores


Capital Budget:

Budgetary Control:

Capital Budget section will furnish details of expenditure to

the concerned circles and respective Planning branches

of Corporate office, on quarterly basis for monitoring

physical targets

Utmost care should be taken to formulate the proposals

as accurately as possible keeping in view the Actual

Expenditure and anticipated requirements with special

reference to the estimates of Civil Wing, ITI Ltd., and

imports including freight, insurance, customs


Capital Budget:

Budgetary Control:

The proposals for RE and BE should be finalized

in consultation with the Planning Cell of the

Circle/Unit and closely scrutinized by the

Internal Financial Advisor in order to ensure

realistic provision of funds with certificate.


Cash Budget:

Cash Flow statement and Cash budget are two

important tools used in financial planning and

cash projections.

Cash Budget is futuristic in approach

Cash Flow Statement is based on historical data.

In BSNL, the cash drawl authorizations will be

restricted not only under Working Expenses but

also under Government transactions.


Cash Budget :Main guidelines

Budget allotments are taken as base for

determining of cash drawls.

An amount equivalent to 60% of gross pay and

allowances is taken as net pay and allowances for

disbursement in cash at the end of the month.

Expenditure under Working Expenses other than

salaries and wages will be restricted to

proportionate periodical allotment.


Cash Budget :Main guidelines

Five Percent of telephone revenue realization

based on targets communicated will be

authorized for drawal towards service tax

payment.

Authorization under Payment of Loans and

Adv. will be restricted to budget allotment


Control over expenditure:

o In DOT period, control over expenditure was with

reference to budget allotment only.

o In BSNL at various stages viz. Corporate Office

level, Circle level and SSAs level.

o 10 days funds authorization is being allowed

proportionately by Corporate Office.

o Cash is authorized based on the budget allotment/

Revised Allotment/Final Grant.



o DDOs are not authorized to incur expenditure

out of the revenue collected.

o Revenue collected is transferred to BSNL CO

on day to day basis

o For operational purpose, cash is authorized by

BSNL Corporate Office periodically.



o Cash is requisitioned to BSNL CO on the following objects:

Pay, IDA/PLI, Payment to DoT Cell, GPF Adv/Wdl.,

Leave Salary contribution, Pension Contribution,

Water, Electricity and Fuel Charges, Vehicle Running

Expenses, Repair and Maintenance, Overtime Allow. ,

Other Working Expenses, Service Tax, HBA/Loans and

Adv., Refund of EMD/SD/Telephone Revenue,

IUC Charges, IT Payment for purchase of Stores/ Raw

Materials, Payment of Excise Duty and other levies,

Wages, Suppliers/contractors bills, Others to be specified


Economy Measures

The following measures for fiscal prudence and

economy as per BSNL Corporate Office orders:

Expenditure ceilings for holding seminars,

conferences, workshops etc. should be enforced

10% cut on the Budgetary Allocation.

Holding of exhibitions/seminars/conferences in

abroad is strongly discouraged except in the

case of exhibitions for trade promotion.


Economy Measures

Complete ban on holding of meetings and

conferences at five star hotels.

No travel on government account by air will take

place by first class, only by economy class,

irrespective of the entitlement.

Where travel is unavoidable, officers of the

appropriate level dealing with the subject are

sponsored instead of those at higher levels


Economy Measures

The size of delegation and the duration of visit will be kept

to the absolute minimum.

Participation in study tours, workshops , seminars

conferences presentation of papers abroad at Govt. cost

will not be entertained except those that are fully funded by

sponsoring agencies.

Purchase of vehicles, except requirements of the security

related organizations will not be permitted.


Expenditure Management: Economy

Measures & Rationalization of Expenditure

Cut in Non Plan Expenditure: For the year 2009-

2010, 10% cut in non Plan expenditure under:

a) Domestic and Foreign Travel Expenses

b) Publications

c) Professional Services

d) Advertising and publicity

e) Office expenses

f) Police ( except for security related requirement)


Expenditure Management: Economy

Measures & Rationalization of Expenditure

g) Other administrative expenses.

h) The remaining portion of non plan expenditure is

5% mandatory cut.

i) No increase in the budgetary allocations under the

heads of non plan expenditure, particularly

where cuts are now being imposed, will be allowed

at RE Stage , except under very extraordinary


Introduction of Fleet Card:

As a part of expenditure control BSNL has introduced cash

less purchase of diesel /petrol through Fleet card.

Scheme is effective from 01-10-2009.

Enter into arrangement for Fleet card programme with

companies like IOC and in places where IOC dealers are

not available through BPCL /HPCL etc.

Ensure that from 01-10-2009, purchase of fuel is effected only

through the Corporate Smart Card system.



DDOs were suitably instructed that no

cash purchase of fuel is made directly

or through Imprest/Temp. Advance.

Further, any cash payments made after

01-10-2009 are to be disallowed by

DDOs

Agreement executed by BSNL & IOC Ltd.



M/S IOC Ltd. Will issue corporate Smart Cards,

"XtraPower"- to all BSNL Units for purchase of

Diesel/Petrol from their designated Retail Outlets, for

running DG sets and vehicles.

The circles will assess the requirement of cards in

all their units and place a supply order on IOC Ltd.

The card fee will be Rs.100/- per card and the

validity of the cards is for three years from the date of

issue..



The Scheme will be operational immediately

and will be for Six months. It may be extended

further based on the experience of field units

The Pay & Accounts officer of each SSA/Unit

will hold the Master Card and will arrange to

issue user cards to their indenting units based

on bonafide requirement for purchase of

Diesel/Petrol.



The daily /weekly / monthly transaction limit will be

fixed and controlled by him through Web based user

ID/ Password.

PAO will authorise his bank the weekly charging of

cash up to the permitted limit on the Master card by

depositing the amount by cheque or use RTGS (Real

Time Gross Settlement).



The user card authentication for transaction will

be controlled by a four digit PIN which will be

held confidential by the authorized card holder.

Responsibility of user for any unauthorized use

of the card.

The Charge slip for every transaction he makes

should be obtained by him which will be the

basic voucher for accounting.



Rebate or discount allowed will be reflected in their

monthly statement of transactions.

The centralized MIS information can be accessed

by the Master card holder.


Documents

SDH Overview & Protection Schemes