WHAT IS ANNUAL FINANCIAL STATEMENT

The Annual Financial Statement is a document presented to Parliament every financial year as part of the Budget process, as required under Article 112 of the Constitution of India. The documents consist of receipts and expenditures of the government in the current year, previous year and the Budget year in three separate parts — Consolidated Fund of India, Contingency Fund of India, and Public Account of India. The government presents a statement of receipts and expenditures for these accounts every year to Parliament.
 
Loans raised by the government, borrowings from the Reserve Bank of India (RBI), and borrowings from foreign governments or institutions are shown under capital receipts, which also show loan recoveries, asset sale, disinvestment, etc.
 
The difference between Annual Financial Statement and Budget
 
The term Budget is a common word for a number of documents, including the Annual Financial Statement. The other documents in the Budget include Demand for Grants, Appropriation Bill, Finance Bill, Memorandum Explaining the Provisions in the Finance Bill, Macroeconomic Framework Statement, Fiscal Policy Strategy Statement, Medium Term Expenditure Statement, etc.
 
Annual Financial Statement distinguishes the expenditure on revenue account from the expenditure on other accounts, as mandated in the Constitution. Revenue and capital sections together form the Union Budget, so the Annual Financial Statement is basically the Budget of the government.

ANNUAL FINANCIAL STATEMENT NEWS