Classification of transactions in government accounts on a function-cum-program basis was introduced from 1st April, 1974. This functional classification was developed with the twin objectives of reflecting government transactions in terms of functions, programs, and schemes and securing correspondence between accounting classification and plan heads of development. The budget heads of account and rules of classification prior to 1974 were not easily understood. Budget heads and plan heads (adopted by the Planning Commission for plan purposes) did not match, and meaningful comparison between these two became almost impossible. In order to obviate this and to enable easy preparation of performance budgeting, the Administrative Reforms Commission appointed by the Government of India had made certain recommendations for changes to the classification of budget heads. Based on these recommendations, the Comptroller and Auditor General of India prescribed a new list of major heads and minor heads to come into force with effect from 1st April 1974. Andhra Pradesh
The government adopted these heads leaving certain functions and programmes that
were not needed by the State Government (given in Appendix-XI in Part III).
Welcome to Budget manual:Head of Accounts Test
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The budget manual incorporated these new heads of account. It also presented at one place the rules framed by the Finance Department for the guidance of estimating officers and the Departments of Secretariat in the preparation and examination of budget estimates and the control to be exercised on expenditure so as to ensure that expenditure does not exceed the voted amount. A five-tier system of classification corresponding to sectors, functions, programs, schemes, and object heads has come into force for the first time in the country to facilitate global comparison of activities of the government. The manual is brought out in three parts. Proposed changes from time to time have been explained in Part I of this manual. Part II brings up-to-date the various instructions to the estimating officers for the preparation and examination of the budget estimates. Part-III contained Appendices I to XI, showing the list of Major and Minor Heads of Account Acts and rules, etc. The Government of Andhra Pradesh has taken up the revision of the budget manual as a part of the implementation of the World Bank-assisted “Strengthening of Public Financial Management in Andhra Pradesh” IDF Grant.