CHAPTER 7
APPROPRIATION ACCOUNTS

51.1    Introduction

Appropriation Accounts (Postal Services) indicate the details of amounts on various specified services actually spent by the Department of Posts vis-à-vis those authorised by the Appropriation Act passed by the Parliament. Appropriation Accounts of the Postal Services are prepared every year by the Secretary, Department of Posts and audited and certified by the Comptroller and Auditor General of India.

The objective of Appropriation audit is to ascertain whether the expenditure incurred under the grant is within the authorisation given under the Appropriation Act and that the expenditure required to be charged under the provisions of the Constitution is so charged. It also ascertains whether the expenditure so incurred is in conformity with the law, relevant rules, regulations and instructions.

51.2    Budget grants and expenditure

A summary of Appropriation Accounts (Postal Services) exhibiting expenditure during 2000-01 compared with the sums authorised in the schedule appended to the Appropriation Act 2000 passed under Articles 114 and 115 of the Constitution of India, is given below:

(Rs in crore)

There was a variation in the Revenue section (Charged) of Rs 0.50 lakh. In supplementary grants and demands in March 2001, Rs 2.00 lakh were allotted under Non-Plan, whereas only a sum Rs 1.50 lakh was shown in the Appropriation Accounts. Department may reconcile the difference.

A comment was made in Report No. 6 of 2001 of the Comptroller and Auditor General of India, regarding savings under the revenue segment during 1999-2000. The Ministry in their action taken note stated in September 2001 that surrender under revenue segment was due to less receipt of claims from Railways for conveyance of mails, less expenditure than anticipated and uncertainties in the payment of arrears of pension etc. The Ministry, however, assured that all efforts were being made to ensure accurate estimation to the extent possible to avoid savings and that circles had also been suitably instructed.

Savings under capital head was 51.68 per cent of the provision

However, the overall saving rose five-fold to Rs 393.12 crore during 2000-01 as compared to the saving of Rs 73.42 crore during the previous year. Under Revenue (voted) section, saving of Rs 347.27 crore was 6.61 per cent of the original provision of Rs 5254.46 crore. In Capital (voted) section, there was a saving of Rs 46.02 crore which constituted 51.68 per cent of the original provision.

In addition technical supplementary grant of Rs 9.78 crore under Capital (voted) section, which was obtained by the department in August 2000, could not be utilised at all and was surrendered from Major head 2552 Reserve for the development of North East region in September 2000. Department may investigate the necessity of obtaining the supplementary grant, even though the original grant/appropriation could not be utilised fully.

51.3    Persistent savings under Capital section

Savings in a grant or appropriation indicate that the expenditure could not be incurred as estimated and planned. Savings as shown in Appropriation Accounts in real terms denote unspent amounts, which are indicative of poor budgeting or shortfall in performance of the department under various schemes.

The persistent savings in the Capital (voted) section for the past three years are depicted in the chart below:

A similar comment was made in Report No. 6 of 2001 of the Comptroller and Auditor General of India regarding savings under Capital (voted) section. The Ministry in their Action Taken Note stated in October 2001 that the savings in 1999-2000 occurred primarily under mechanisation and modernisation because it was decided to drop the idea of providing the optical code reading (OCR) facility and culling, phasing and cancelling machines to the automatic mail processing centres. The department stated, however, that overall savings under the Capital section were progressively on the decline.

This trend was reversed, however, and savings under the Capital (voted) section went up almost three times from Rs 16.04 crore (19.23 per cent of the total grant) in 1999-2000 to Rs 46.02 crore (46.57 per cent of the total grant) in 2000-01.

Savings under Capital section in 2000-01, too, were primarily under the head “5201 - 104 - Mechanisation and Modernisation of Postal Services” as indicated in the chart. Out of the budget allocation of Rs 73.09 crore during the year 2000-01 in respect of Mechanisation and Modernisation scheme, only Rs 31.69 crore could be spent leaving Rs 41.40 crore of the allotment unspent. Such savings call for detailed investigation as some critical activities planned and budgeted for, could not take off for the last two years.

The savings of Rs 47.53 crore under the Capital heads were marginally offset by Rs 1.51 crore excess under the heads “5201 - 003 - Training”, and “101 - Postal networks”. Therefore, the net savings under Capital (voted) section worked out to Rs 46.02 crore.

51.4    Department’s explanation for savings in grant/appropriation

The reasons advanced by the department for savings under Revenue (voted) and Capital (voted) sections were as under:

(Rs in crore)

Out of the total net savings of Rs 347.27 crore under Revenue (voted) section, major portion of the savings was under the sub heads 02-101-01 existing post offices, 02-102-01 Mail Sorting, 02-103-01 Rail, 07-101-01 superannuation and retirement allowances and 07-102-commuted value of pension. In a similar case brought out in Audit Report No. 6 of 2001, the Ministry in its Action Taken Note stated in September 2001 that provision under a Head at Budget Estimates stage is made considering the actual expenditure during the previous year, actual expenditure upto September and provision made in Budget Estimates/Revised Estimates stage of the previous years and demand projected by circles and units.

51.5    Injudicious re-appropriations

Injudicious reappropriation of Rs 8.99 crore was made in five cases

In five cases, re-appropriation aggregating to Rs 8.99 crore as shown in the table below was injudicious, because the original provisions under the sub-heads to which these funds were transferred by re-appropriation were more than adequate. The savings under these sub-heads were more than the amounts re-appropriated to these sub-heads.

(Rs in crore)

The Ministry in Action Taken Note on Paragraph 46.5 of Audit Report no.6 of 2001 stated in September 2001 that the final grant proposals are prepared in February/March every year mainly keeping in view the actual expenditure incurred up to January and the expected expenditure during the remaining two months as reflected in the demands of the circles under various heads. The Ministry further stated that Circles had been suitably instructed to project their final grant proposals in future based on realistic assessments.

The reply of the Ministry is not convincing as injudicious re-appropriation continues to occur as is evident from the above table.