The process of approval is very significant in a responsible form of government. The cycle consists of four phases:

Preparation and submission;

Approval;

Execution; and

Audit

At any given point of time, several cycles would be in operation and would be overlapping.'Nevertheless, various segments of a cycle have different operational life. Budget Preparation In India, budget preparation formally begins on the receipt of a circular from the Ministry of Finance sometime during September/October, that is, about six months before the budget presentation. The circular prescribes the time-schedule for sending final estimates separately for plan and non-plan, and the guidelines to be followed in the examination of budget estimates to be prepared by the department concerned The general rule is that the person who spends money should also prepare the budget estimates. Budget proposals normally contain the following information:

i) Accounts classification

ii) Budget estimates of the current year

iii) Revised estimates of the current year

iv)Actuals for the previous year; and

v) Proposed estimates for the next financial year (which is the budget proper). Budget estimates normally involve :

a) Standing charges or committed expenditure on the existing level of service. This can easily be provided for in the budget, as it is more or less based on a projection of the existing trends.

b) New expenditure which may be due to :

i) expansion of programmes involving expenditure in addition to an existing service or facility; and

ii) new service for which provision has not been previously included in the \\,, grants.

While (i) can be estimated with reference to progress made and the likely expenditure during the next financial year, budget provision for

(b) (i) and (ii)