Government Finance Statistics By Tarun Das

Official Economic Statistics by Tarun Das

Lectures on Government Finance Statistics (GFS) _______________________________________________ _

Professor Tarun Das1

UN Statistical Institute for Asia and Pacific Chiba, Japan 20-24 August 2007

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Professor Tarun Das teaches Public Policy and Research Methodology to the MBA students at the Institute for Integrated Learning in Management (IILM), New Delhi. Presently, he is working at Ulaanbaatar, Mongolia as Glocom Inc. (USA) Expert on Strategic Planning under an ADB Project on Governance Reforms in the Ministry of Finance, Government of Mongolia. Earlier he worked as Economic Adviser in the Ministry of Finance and Planning Commission, Government of India. For any clarification, contact [email protected]/ [email protected]

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Official Economic Statistics by Tarun Das

ACKNOWLEDGEMENTS

Professor Tarun Das teaches Public Policy and Research Methodology to the MBA students at the Institute for Integrated Learning in Management (IILM), New Delhi. Presently, he is working at Ulaanbaatar, Mongolia as Glocom Inc. (USA) Expert on Strategic Planning under an ADB Project on Governance Reforms in the Ministry of Finance, Government of Mongolia. Earlier he worked as Economic Adviser in the Ministry of Finance and Planning Commission, Government of India. These lectures were prepared by the author at the IILM, New Delhi for the training of the Indian Statistical Service and Indian Economic Service. The lectures have been modified to some extent to suit the needs of statistical officers from various countries participating the training program at the UN Statistical Institute of Statistics for Asia and Pacific (SIAP), Chiba, Japan. The lectures are broadly based on various IMF publications and manuals on these topics. It is needless to indicate that these lectures express personal views of the author which may not necessarily reflect the views of the organisations he is associated with. The author is fully responsible for any omissions or errors in these lecture notes. Author would like to express his deepest gratitude to Ms. Davaasuren Chultemjamts, Director, UNSIAP and Dr. Kulshreshtha, Professor (Statistics), UNSIAP for providing an opportunity to deliver these lectures to the participants of the Third Group Training Course in Analysis, Interpretation and Dissemination of Official Economic Statistics during 20-24 August 2007 at UNSIAP, Chiba, Japan. Author is also grateful to the Ministry of Finance, Government of Mongolia, particularly to Mr. Batjargal, Director General, Fiscal Policy and Co-ordination Department for granting necessary permission to deliver these lectures.

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Official Economic Statistics by Tarun Das

Contents 1. Brief profile of the resource person 2. Course outline, scope, objectives and pedagogy 3. Government Finance Statistics (GFS) 3.1 Flows and Stocks 3.2 Other economic flows 3.3 GFS 1986 and Components of Govt Operations 3.4 Accounting rules and Accrual Accounting 3.5 Data Coverage and Sub-Sectors 3.6 Analytical Frameworks for GFSM 2001 3.7 GFSM 2001 Implementation 3.8 Valuation 3.9 Differences between GFS 1986 and GFS 2001 3.10 Derived measures 3.11 Classification of Outlays by Function of Government (COFOG) 3.12 Case Study- Indian GFS 3.13 GFS Workout Session on Mongolian GFS 3.14 GFS Workout Session on Australian GFS

Selected References Lecture notes have been prepared mainly on the basis of the following IMF Publications and Manuals: Government Finance Statistics (GFS) 1986 Government Finance Statistics Manual (GFSM) 2001 Government Finance Statistics (GFS) Yearbook 2006 Monetary and Financial Statistics Manual (MFSM) 2007 Monetary and Financial Statistics (MFS): Compilation Guide 2007 International Financial Statistics (IFS) Balance of Payments Manual 2005 Balance of Payments Statistics Yearbook 2006

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Official Economic Statistics by Tarun Das Profile of the Resource Person Prof. Tarun Das • Professor Tarun Das teaches Public Policy and Research Methodology to the MBA students at the Institute of Integrated Learning in Management (IILM), 3 Lodhi Institutional Area, New Delhi-110003, India. • Presently, he is working at Ulaanbaatar, Mongolia as Glocom Inc. (USA) Expert on Strategic Planning under an ADB Project on Governance Reforms in the Ministry of Finance, Government of Mongolia. Earlier he worked as Economic Adviser in the Ministry of Finance and Planning Commission, Government of India. • Work Experience: 35 yrs as Development Economist in the government of India: Last assignments: Economic Advisor, Planning Commission (1986-1988) and Economic Adviser, Min of finance (1986-2006) • Country Co-coordinator for the IMF Govt Finance Statistics, Special Data Dissemination Standards, World Bank Global Development Finance (1990-2003), the Commonwealth Secretariat Debt Recording and Management System for India (1998-2003). • Worked as Consultant to the World Bank (Washington), ADB (Manila), UNDP (New York), UNESCAP (Bangkok), ILO (Geneva), UNCTAD (Geneva), UNITAR (Geneva), Global Development Network (GDN) (Washington), UN Commission for Africa (Addis Ababa). • Worked on Fiscal Management for the governments of Cambodia, Indonesia, Lao PDR, Mongolia, Nepal, Philippines and Samoa. • Member of Govt. Delegate to World Bank, ADB, IMF, UNCSD, WTO. • Research/Teaching Interest: Macro Econometric Modeling and Policy Planning, Research Methodology, Public Policy, Economic Reforms, Poverty, Inequality, Transport Modeling, Public Debt and External Debt. • Dr. Das is a widely traveled person and possesses diversity in skills in teaching, training, research, policy planning and modeling. He has published a number of books and papers on economic statistics, structural reforms, fiscal policies, management of public debt and external debt, transport modeling, poverty and inequality, foreign investment, technology transfer and privatisation strategy. • Qualifications: MA in Econ. (Gold Medalist), Calcutta University, 1969. Ph. D. in Econ, as Commonwealth Scholar, East Anglia Univ., England, 1977.

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Official Economic Statistics by Tarun Das Course Outline, Scope, Objectives and Pedagogy Background The consultant, an expert in the field of Economic, Financial and Government Statistics will cover select topics in Economic Statistics, namely: Government Finance Statistics (6 sessions), Monetary and Financial Statistics (4 sessions), BOP/Rest of the World Sector(6 sessions), and Productivity analysis (4 sessions) by conducting lecture and workshop sessions during 20-24 August 2007. These lectures form part of the wider Third Group Training Course in Analysis, Interpretation and Dissemination of Official Statistics, 2007 at U.N. Statistical Institute for Asia and the Pacific, Chiba.

Objectives The course aims to strengthen the capability of the national statistical services to take part in the process of improving their economic statistics and quality of analysis, interpretation and dissemination of official statistics. The consultant is expected to impart training to help participants understand select topics of the systems of economic accounts, specifically the system of Government Finance Statistics, Monetary and Financial Statistics, Balance of Payment Statistics, and Productivity analysis for their countries

Learning Outcome 1.

2. 3.

Develop a comprehensive understanding of the basic concepts, analytical framework, database, methodology, uses, applications and limitations of economic statistics. Develop skills and capabilities for analytical presentation, networking and teamwork through group workout sessions. More emphasis will be laid on understanding basic concepts, methodology, techniques, and their uses and limitations for various situations, rather than formal proofs and derivation of formula.

Pedagogy 1. Teaching techniques will consist of formal lectures, case studies, practical and workout sessions, and preparation and presentation of group project reports. 2. Selected case studies would be given so as to facilitate participants to relate to theoretical concepts with real life situations in economic analysis, policy formulation and planning. The students would present and discuss these case studies in the class. 3. Participants will be provided with complete course material well in advance. To make classroom presentations by the resource person more meaningful and effective, participants are required to come prepared and collect related information and data from journals, newspapers and websites, and participate actively in classroom sessions. 4. In order to develop teamwork and networking capabilities, students are encouraged to participate actively in group discussions and workout sessions.

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Official Economic Statistics by Tarun Das Government Finance Statistics – Basic Concepts Professor Tarun Das

1. Flows and Stocks All of the data recorded in the GFS system are either flows or stocks. Flows are monetary values of units that occur within an accounting period. Stocks refer to a unit’s value at a particular point of time. For example, receipts and expenditure are flows whereas outstanding public debt is a stock. Flows and stocks recorded in the GFS system are integrated, which means that all changes in stocks can be fully explained by the flows. The following relationship is valid for each stock:

S¹ = Sº+ F

or

F = S¹ - Sº

Where Sº = values of a specific stock at the beginning of an accounting period S¹= values of a specific stock at the end of an accounting period F = Net value of all flows during the period that affected that particular stock. Types of flows Flows reflect the creation, transformation, exchange, transfer, or extinction of economic value. They involve changes in the volume, composition, or value of a unit’s assets, liabilities, and net worth. A flow can be a single event, such as a cash payment for the purchase of goods, or the cumulative value of a set of events occurring during an accounting period, such as the continuous accrual of interest expense on a government bond. All flows are classified as transactions or as other economic flows. A transaction has the following characteristics: (a) It is an interaction between two units by mutual agreement or by force of law such as interest payments, tax and non-tax revenues. Although most transactions take place between two units, in some cases there may be internal transactions such as inventories.

(b) Every transaction is either an exchange or a transfer. A transaction is an exchange if one unit provides a good, service, asset or labor to a second unit and receives something of the same value in return. Compensation of employees, purchases of goods and services, interest expense, the sale of an office building, and all internal transactions are exchanges. (c)

A transaction is a transfer if one unit provides a good, service, asset, or labor to a second unit without receiving anything of any value in return, such as government subsidies, grants, and social assistance benefits to the people.

(d)

All taxes and duties are treated as transfers even though the units making these payments may receive some benefits provided by the government receiving the taxes. Nonlife insurance premiums and claims are also treated as transfers. Non-life insurance includes social security schemes and employer social insurance schemes for government employees that do not provide retirement benefits.

(e) All transactions can also be classified as monetary or non-monetary. A non-monetary transaction must be assigned a monetary value as the GFS system deals only with flows

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Official Economic Statistics by Tarun Das

(f)

(g)

and stocks expressed in monetary terms. Non-monetary transactions can be either two party transactions or internal transactions, and they can be exchanges or transfers. Barter, inkind remuneration, in-kind payments, in-kind transfers are non-monetary transactions. Some transactions are not recorded in the form in which they appear to take place. Instead they are modified to bring out their underlying economic relationships more clearly. Rerouting, partitioning, and reassignment are the three types of modifications employed in the GFS system. Rerouting is required when the actual party to a transaction does not appear in the accounting records because of administrative arrangements. For example, government makes contributions directly to the employees’ retirement schemes. For proper accounting purpose, it is necessary to reroute these payments so that the government is seen as paying to the employees, who then are deemed to make payments of the same amount to the retirement schemes.

(h) Partitioning is the division of a single transaction between two parties into two or more transactions for recording in the GFS. For example, when a government unit acquires a fixed asset under a financial lease, the periodic lease payments need to be partitioned into two transactions, a repayment of principal and a payment of interest.

(i)

Reassignment is required when a unit acts as an agent for another unit. For example, for convenience one government unit may collect taxes and then transfers some or all of the taxes to another government unit. In some cases, the collecting unit retains a small portion of the tax collected as collection expenses. The amount retained is treated as the sale of a service by the collecting unit.

Differences with SNA 1993 The treatment of some activities in the GFS system differs from their treatment in the 1993 SNA. For example, general government units are non-market producers, because they normally produce goods and services, and then distribute those goods and services without charge. The production of the output and its distribution are both non-monetary transactions that must be recorded in the 1993 SNA to have a complete accounting of production. The GFS system, however, focuses on the financial activities of government. Because the value of the output produced and the value of the distribution are equal by definition, there cannot be any change in the financial position of the government unit involved in transactions. As a result, these transactions do not need to be recorded in the GFS system. The transactions associated with the production process, such as compensation of employees and the purchase of goods and services for use in production, do affect the financial position of the general government unit and are recorded in the GFS system. Despite different treatments of some activities, both systems include all flows that change stocks so that all changes in the balance sheet can be explained by the flows recorded. In general, the transactions of the 1993 SNA that are not recorded in the GFS system include the following: • The output and simultaneous distribution of non-market goods and services; • The output of fixed assets constructed on own account and the costs of producing those assets; • Certain transactions related to employer social insurance schemes providing retirement benefits Managed by general government units; and • Transactions reflecting the reinvestment of earnings on direct foreign investment.

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Official Economic Statistics by Tarun Das

2. Other economic flows

Other economic flow is a change in the volume or value of an asset or liability that does not result from a transaction. Volume changes are described as (1) other changes in the volume of assets or, simply, other volume changes, and value changes are described as (2) holding gains and losses. In all cases, a reference to a change in the volume or value of an asset refers also to changes in liabilities as appropriate. (1) Other changes in the volume of assets cover a wide variety of events, which are divided into three groups viz. (a) Events that involve the addition to or deletion from the balance sheet of an existing asset or liability with no changes in its quantity or quality. A few examples are given below; • A mineral deposit becomes economically exploitable due to technological progress or rise in market prices. • Improved access may make commercial harvesting of timber feasible in a particular forest. • A construction project might lose its economic rationale before it is completed and is abandoned. • A government might grant patent protection to an invention. • A creditor may decide not to collect a financial claim because of the debtor’s bankruptcy. (b) Events that change the quantity or quality of assets. A few example are: • The discovery of a new deposit of minerals. • An increase in the quantity of forests and fish stocks from natural growth. • The partial or complete catastrophic destruction of an asset resulting from a large-scale unforeseen event, such as a major earthquake or hurricane. • The exhaustion of a patent over time. • A unilateral change by an employer in the benefit structure of a retirement scheme. • A decrease in the quality of an asset resulting from environmental damage, erosion, deforestation, or unforeseen obsolescence. • The creation of land by reclaiming it from the sea with the use of sea barriers. • The seizure of assets by a government unit without full compensation in public interest. • A change in land-use allowing use of agricultural land for commercial purpose. (c) Events that lead to changes in the classification of assets. A few examples are: • Corporation of government telecom department or posts. • Privatisation and outright sale of a departmental enterprise. • A conversion of non-monetary gold to monetary gold. (2) Holding gains and losses on assets and liabilities, together with the corresponding changes in net worth, arise as a result of changes in the prices of those assets and liabilities, including changes resulting from exchange rate movements.

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3. GFS 1986 GFS 1986 distinguishes between:

Government financial assets. (1) Receipts and payments- This is the first line of distinction for all transactions.

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Official Economic Statistics by Tarun Das

4. Accounting rules With the exception of consolidation, the accounting rules of the GFS system are the same as those of the 1993 SNA. There are also many similarities between the rules used in the GFS system and those applied by businesses in their financial statements. 4.1 Type of accounting system

Double-entry accounting is used for recording flows. In a double-entry system each flow gives rise to two equal-value entries, traditionally referred to as a credit entry and a debit entry. A debit is an increase in an asset, a decrease in a liability, or a decrease in net worth. Conversely, a credit is a decrease in an asset, an increase in a liability, or an increase in net worth. Revenue entries, which represent an increase in net worth, are recorded as credits. Conversely, an expense refers to a decrease in net worth and is recorded as a debit. A balance sheet is a compilation of a unit’s assets, liabilities, and net worth. The fundamental identity of the balance sheet and of accounting in general is that the total value of the assets always equals the total value of the liabilities plus net worth. Use of the double-entry system ensures that this identity is correctly maintained. 4.2 Time of recording flows

Once a flow has been identified, the time at which it occurred must be determined so that the results of all flows within a given accounting period can be compiled. a. Alternative recording bases

With the accrual basis, flows are recorded at the time economic value is created, transformed, exchanged, transferred, or extinguished. In other words, the effects of economic events are recorded in the period in which they occur, irrespective of whether cash was received or paid or was due to be received or paid. In general, the time attributed to events is the time at which ownership of goods changes, services are provided, the obligation to pay taxes is created, the claim to a social benefit payment is established, or other unconditional claims are established. If an economic event requires a subsequent cash flow, such as purchases of goods and services on credit, then the length of time between the time attributed to an event with the accrual basis and the time of the cash flow is bridged by recording a receivable or a payable. For example, when a general government unit purchases goods on credit, it records a debit to an inventory account and a credit to accounts payable when ownership of the goods shifts. When the cash payment is made, the general government unit records a debit to accounts payable and a credit to cash. All events that result in the creation, transformation, exchange, transfer, or extinguishment of economic value are recorded with the accrual basis in the GFS system. Thus, all non-monetary transactions are included in statistics compiled on the accrual basis. With the due-for-payment basis, flows that give rise to cash payments are recorded at the latest times they can be paid without incurring additional charges or penalties or, if sooner, when the cash payment is made. If a payment is made after it is due to be paid, then the gap is bridged by recording a receivable, just as with the accrual basis. If a payment is made before it is due, then no receivable is necessary.

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With the commitments basis, flows are recorded when a general government unit has committed itself to a transaction. Normally, this basis applies only to purchases of assets, goods, and services, including compensation of employees. The time of recording generally is when a purchase order is issued by the general government unit. Flows for which the commitments basis is not applicable must be recorded on one of the other three bases. In-kind transactions may or may not be recorded. With the cash basis, flows are recorded when cash is received or disbursed. Although non-monetary flows can be recorded, most accounting systems using the cash basis do not record non-monetary flows because the focus is on cash management rather than resource flows. b. The reasons for using the accrual basis in the GFS system

The GFS system uses the accrual basis, because the time of recording matches the time of the actual resource flows. Consequently the accrual basis provides the best estimate of the macroeconomic impact of government fiscal policy. With the cash basis, the time of recording may diverge significantly from the time of the economic activities. For example, the interest paid on a zero-coupon bond would not be recorded until the bond matures, which could be many years. The accrual basis provides the most comprehensive information because all resource flows are recorded, including internal transactions, in-kind transactions, and other economic flows, which have impacts on the balance sheet. In general, accounts using the due-for-payment, commitments, or cash basis are restricted to monetary transactions. Payment arrears arise when an obligatory payment is not made by its due-for-payment date. As this date is always the same or later than the date attributed to a flow under the accrual basis, all arrears will be included in statistics compiled with the accrual basis. With the commitments basis, the validity of information on arrears will be the same as with the accrual basis. Information on cash flows is not lost with the accrual basis. Normally a separate statement of cash flows is prepared along with accrual basis. Accounts using the due-for-payment, commitments, or cash basis normally do not differentiate between expenses and acquisitions of non-financial assets. With the accrual basis, acquisitions of nonfinancial assets are recorded separately and the expense of using those assets in operating activities is Matched with the period of their use rather than the period of their acquisition. Additionally, the other major macroeconomic statistical systems (national accounts, balance of payments, and monetary and financial statistics) use the accrual basis. Thus, the joint use of statistics from two different systems is facilitated greatly by the use of the accrual basis in the GFS system. Despite the advantages of the accrual basis, its implementation is more difficult than the other bases and will require more estimates. c. Implementation of the accrual basis

Taxes and other compulsory transfers are recorded when the activities, transactions, or other events occur that create the government’s claim to the taxes or other payments. This time is not necessarily the time at which the event being taxed occurred. For example, the obligation to pay tax on capital gains normally occurs when an asset is sold, not when the asset’s value appreciated. Estimating the revenue from taxes and compulsory social insurance contributions must take many uncertainties into account. The primary uncertainty is that the government unit receiving the revenue

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Official Economic Statistics by Tarun Das is usually not a party to the transaction or other event that creates the obligation to pay the taxes or compulsory social security contributions. Only those taxes and social security contributions that are evidenced by tax assessments and declarations, customs declarations, and similar documents, and are realistically expected to be collected, are considered to create revenue for government units. If taxes are imposed on specific transactions, they are recorded at the times the underlying transaction occurs, even though the time may not coincide with the actual payment of the tax. Examples include sales taxes, value-added taxes, import duties, and estate and gift taxes. In principle, income taxes and social contributions based on income should be attributed to the period in which the income is earned. In practice, some flexibility is permitted. As a practical deviation from the general principle, income taxes deducted at source, such as pay-as-you-earn taxes, and regular prepayments of income taxes may be recorded in the periods in which they are paid, and any final tax liability on income may be recorded in the period in which it is determined. Income taxes are normally imposed on the income earned during an entire year. If monthly or quarterly statistics are compiled, indicators of seasonal activity or other appropriate indicators may be utilized to allocate the annual totals. Taxes on the ownership of specific types of property are based on the value of the property at a particular time but are deemed to accrue continuously over the entire year. Similarly, taxes on the use of goods usually relate to a specific time period as per a license to operate a business. Some compulsory transfers, such as fines, penalties, and property forfeitures, are determined at a specific time. These transfers are recorded when the government has a legal claim to the funds, which may be when a court renders judgment or an administrative ruling is published. Determining the time of recording for grants and other voluntary transfers is complex because there may be a wide variety of eligibility conditions. In some cases, a potential grant recipient has a legal claim only when it satisfies certain conditions. These transfers are recorded when all requirements and conditions are satisfied. Dividends and withdrawals from income of quasi-corporations are recorded as of the date on which they are declared payable or actually take place if no prior declaration occurs. Transactions in goods and non-financial assets are recorded when legal ownership changes, which may depend on the provisions in the sales contract. If that time cannot be determined precisely, recording may take place when there is a change in physical ownership or control. For example, a change of ownership is imputed to have taken place under a financial lease when the lessee takes control of the asset. Transactions in services normally should be recorded when the services are provided. If a service, such as transportation, is delivered at a specific time, then the transaction is recorded at that time. Other services are supplied or take place on a continuous basis. For example, operating leasing, insurance, and housing services are continuous flows and, in concept, are recorded continuously as long as they are being provided. More practically, the value of the services attributed to a period is based on the quantity supplied during the period rather than the payments required. Several other transactions also relate to flows that take place continuously or over extended periods. For example, consumption of fixed capital accrues continuously over the whole period a fixed asset is available for productive purposes and interest accrues continuously over the period that the financial claim exists. Often an interest-bearing financial claim calls for periodic interest payments. These

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Official Economic Statistics by Tarun Das payments, however, reduce the liability that has already accrued over the previous period and are not expense transactions. Additions to inventories are recorded when products are purchased, produced, or otherwise acquired. Withdrawals from inventories are recorded when products are sold, used up in production, or otherwise relinquished. Additions to work-in-progress inventory are recorded continuously as work proceeds. When production is completed, the production costs accumulated to that point are transferred to finished-goods inventory. Transactions in many types of financial assets, such as securities, loans, currency, and deposits, are recorded when legal ownership changes. In some cases, the parties to a transaction may perceive ownership to change on different dates because they acquire the documents evidencing the transaction at different times.

5. Data Coverage and Sub-Sectors In the GFSM 2001 framework, the main emphasis is on measuring the fiscal performance of the general government sector. Countries are strongly encouraged to compile, on a best effort basis, data for the general government sector and all of sub sectors (as relevant for each country). In the GFSY Questionnaire, provision is made for the following general government sub-sectors and their consolidation:

Sub sector 1: Budgetary central government 1.1 Ministries, parliament, presidency. Sub sector 2: Extra budgetary units/entities such as: 2.1 Autonomous government agencies 2.2 Education Fund 2.3 Environment Protection Fund 2.4 Road Fund 2.5 Universities

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Official Economic Statistics by Tarun Das Units of General Government The general government sector consists of all government units and all non-market nonprofit institutions that are controlled and mainly financed by government units. In the GFS system, provision is made for three main sub-sectors (or levels) of government: Central; state (provincial or regional); and local. While some countries have all three sub-sectors; many have only a central government, or central government and local government sub-sectors. The central government sub-sector is a large and complex sub-sector in most countries. It generally comprises a central group of departments or ministries. Any central government Entity that is fully covered by the central government budget is part of the “budgetary central government” in the GFS Yearbook. Other entities or units that are part of the central government are either social security or extra budgetary central government. These entities or units are operating under the authority of the central government but are not (fully) covered by the central government budget. Central Government Units Covered by the Budget (Sub-sector 1) This sub-sector lists all central government entities covered by the central government budget, i.e., the budgetary central government. The following are typical examples of budgetary central government entities: courts of law, ministries, departments, and parliament. The budgetary central government may also include central government boards, commissions or central government agencies. Central Government Units with Individual Budgets (Sub-sectors 2 and 3) These sub-sectors list units or entities (extra budgetary entities or units and social security units, respectively) that operate under the authority of the central government but are not (fully) covered by the central government budget (“budgetary central government”). Typically, these units or entities have individual budgets, and their own-revenue sources may be supplemented by grants (transfers) from the budgetary central government or from other sources. State Governments (Sub-sector 4) This sub sector lists all state, regional or provincial governments in a country. A state, province, or region is the largest geographical area into which the country as a whole is divided for political or 20

Official Economic Statistics by Tarun Das administrative purposes. The legislative, judicial, and executive authority of a state government extends over the entire area of the state, but does not extend over other states. To be recognized as a government unit the entity must be able to own assets, raise funds, and incur liabilities on its own account, and it must also be entitled to spend or allocate at least some of the taxes or other income that it receives according to its own policies. The entity may, however, receive transfers from the central government that are tied to certain specified purposes. A state government should also be able to appoint its own officers independently of external administrative control. If a government entity operating in a state is entirely dependent on funds from the central government, and if the central government also dictates the ways in which those funds are to be spent, then the entity should be treated as an agency of the central government. Local Governments (Sub-sector 5) This sub-sector lists all local governments such as municipalities, corporations, city councils, village councils etc. in a country. The legislative, judicial, and executive authority of local government units is restricted to the smallest geographic areas distinguished for administrative and political purposes. The scope of a local government’s authority is generally much less than that of the central or state governments, and such governments may or may not be entitled to levy taxes on institutional units or economic activities taking place in their areas. They are heavily dependent on grants from higher levels of government, and they may also act as agents of central or state governments to some extent. To be treated as institutional units, however, they must be entitled to own assets, raise funds, and incur liabilities by borrowing on their own account. They must also have some discretion over how such funds are spent, and they should be able to appoint their own officers independently of external administrative control. 6 Analytic Frameworks for GFSM 2001 The GFSM 2001 emphasizes the presentation of fiscal data in an integrated framework of stocks and flows, the use of accrual accounting, and the introduction of several new summary measures of government performance. Nonetheless, the GFSM 2001 analytic framework can be used to present data generated by a variety of accounting practices, including data on a cash basis. Basis of Recording (Accounting Method)

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In summary, desired GFS tables comprise two Statements, nine detailed classification tables, and two annexes: Statement I: Statement of Government Operations Statement II: Statement of Sources and Uses of Cash Table 1: Revenue Table 2: Expense Table 3: Transactions in Assets and Liabilities Table 4: Holding Gains and Losses in Assets and Liabilities Table 5: Other Changes in the Volume of Assets and Liabilities Table 6: Balance Sheet Table 7: Functional Classification of Outlays Table 8: Transactions in Financial Assets and Liabilities by Sector Table 9: Total Other Economic Flows in Assets and Liabilities (new for 2006 GFS) Annex 1: Consolidation Table Annex 2: Integrated Statement of Stocks and Flows in Assets and Liabilities GFSM 2001 The GFSM 2001 framework consists of four statements: three based on accrual data for transactions, other economic flows, and balance sheets; and a fourth based on cash data. The Statement of Government Operations presents summary information on all transactions and derives important analytic balances from this information. Revenue minus expense equals the net operating balance, which is a summary measure of the effect of the government’s transactions on net worth. The subsequent deduction of the net acquisition of non-financial assets from the net operating balance produces a balance called net lending/borrowing, which measures the extent to which government either provides financial resources to the other sectors of the economy and the rest of the world (net lending) or uses financial resources generated by the other sectors (net borrowing). Net lending/borrowing, also, is equal to the government financing requirement derived as the net of transactions in financial assets and liabilities. It is a measure of the financial impact of government activity on the rest of the economy. The Statement of Other Economic Flows presents information on changes in net worth that arise from flows other than transactions. These flows are classified as either changes in the value (revaluations) or the volume of assets and liabilities. The balancing item of this statement is the change in net worth resulting from other economic flows. The Balance Sheet presents the stocks of assets, liabilities, and net worth at the end of the accounting period. The government’s net worth is defined as the difference between total assets and total liabilities. Another balancing item that can be derived from the Balance Sheet is net financial worth, which is defined as total financial assets minus total liabilities. STATEMENT OF GOVERNMENT OPERATIONS

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Official Economic Statistics by Tarun Das 1 Revenue 2 Expense Net operating balance (1-2=31+32-33) 31 Net acquisition of nonfinancial assets Net lending/borrowing (1-2-31=32-33) 32 Net acquisition of financial assets 33 Net incurrence of liabilities

STATEMENT OF OTHER ECONOMIC FLOWS Change in net worth resulting from other economic flows (41+42-43+51+52-53) 41, 51 Change in nonfinancial assets 42, 52 Change in financial assets 43, 53 Change in liabilities

BALANCE SHEET 6 Net worth (61+62-63) 61 Nonfinancial assets 62 Financial assets 63Liabilities

STATEMENT OF SOURCES AND USES OF CASH 1 Cash receipts from operating activities 2 Cash payments for operating activities Net cash inflow from operating activities (1-2) 31 Net cash outflow from investments in nonfinancial assets Cash surplus/deficit (1-2-31) 32* Net acquisition of financial assets other than cash 33 Net incurrence of liabilities Net cash inflow from financing activities (-32*+33) Net change in the stock of cash (3212+3222) 32*=32-3212-3222

Statement of Sources and Uses of Cash shows the amounts of cash generated and used in operations, transactions in nonfinancial assets, and transactions involving financial assets and liabilities, excluding cash itself. The balancing item, net change in the stock of cash, is the sum of the net cash received from these three sources of cash flows. Different Compilation Approaches for Member Countries The GFSM 2001 recommends recording economic stocks and flows on an accrual basis. However, it is recognized that, in most countries, the development of accrual information will take time. Therefore, for each sub-sector of general government, a country may complete GFS tables according to the accounting rules underlying the fiscal data currently being compiled by the reporting country. The accounting method (cash, accrual or others) for each sub-sector of general government should be indicated clearly. Countries will use different approaches for compiling statistics in accordance with the GFSM 2001 framework. The approaches will vary according to the country’s accounting and budgeting practice, and the amount of resources devoted to the process. Most governments currently use a cash basis of recording in their accounting and budgeting systems. Some have started to use an accrual basis of recording and others use various stages along a wide spectrum between cash and accrual. The GFSM 2001 analytic

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Official Economic Statistics by Tarun Das framework, though conceived from an accrual perspective, can be used to present data generated by a variety of accounting practices. Cash Reporting The majority of the 133 countries that report cash data for publication in the Government Finance Statistics Yearbook (GFSY) will, most likely, continue to do so for the foreseeable future. Beginning with the 2003 GFSY, the historical cash data that were reported in accordance with the 1986 methodology are published in the GFSM 2001 framework. The conversion of the historical cash data to the framework of the GFSM 2001 results in a number of coverage and classification gaps. 7. GFSM 2001 Implementation It is required to provide a brief description (about 160 words or less) of the GFSM 2001 implementation status and plans of a country. If a country plans to migrate to the GFSM 2001(or has already started doing so), it is required to indicate the main steps of the plan and their target dates. If a country has not yet developed plans to migrate to the GFSM 2001, they may indicate so. Implementation of the GFSM 2001 can take numerous forms and will depend on each country’s circumstances. For countries that have data only on a cash basis, a first step could be to reclassify these data in the GFSM 2001 framework. Introduction of accrual reporting can take the form of either (i) the implementation of ad hoc adjustments to the cash data (for example, the recognition of in-kind transactions and the accrual of interest) or (ii) the implementation of accrual accounting for the source data. 8. Valuation

All flows and stocks should be valued at the amounts for which goods, assets other than cash, services, labor, or the provision of capital are in fact exchanged or could be exchanged for cash. These values are referred to as current market prices or values. Current market values of stocks are available for assets and liabilities that are traded in active markets, most commonly certain financial assets and their corresponding liabilities. Current market values of other assets and liabilities need to be estimated in a manner similar to non-monetary flows. Some financial assets and liabilities, such as bonds, have a nominal value as well as a current market value. Transactions in these assets and liabilities, however, should be valued at the prices actually paid and not at their nominal value. Similarly, the stocks of such assets and liabilities should be valued at their current market value when recorded on the balance sheet. Another type of actual transaction that may require a valuation adjustment occurs when a unit sells an item and does not receive the corresponding payment for an unusually long time. If the amount of trade credit extended in this way is large, then value of the sale should be reduced by means of an appropriate discount rate and interest should be accrued until the actual payment is made.

24

Official Economic Statistics by Tarun Das Flows expressed in a foreign currency are converted to their value in the national currency at the rate prevailing when they take place, and stocks are converted at the rate prevailing on the balance sheet date. The midpoint between the buying and selling rates should be used. The values of flows that are not already expressed at their current market value, such as barter transactions, must be estimated. In addition, current market values for many stocks will not be readily available and must be estimated. There are various estimation methods, as described below, and the choice of particular method depends on the circumstances and available information. • Values of transactions can be estimated on the basis of values taken from markets with similar transactions. The values of financial assets can be estimated using market transactions of similar assets. • Flows and stocks involving fixed assets can be valued using the market price for similar new goods, properly adjusted for consumption of fixed capital. • If there is no similar market, values of goods or services may be derived from market prices of similar goods or services by making adjustments for quality differences. • The values of flows and stocks of assets can be estimated on the basis of their historical or acquisition cost, adjusted for all changes occurred since their purchase or production, such as consumption of fixed capital, holding gains or losses, depletion, exhaustion, degradation, unforeseen obsolescence, and exceptional losses. • Goods and services can be valued by the amount that it would cost to produce them currently. • Assets can be valued at the discounted present value of their expected future returns. This method is used for many financial assets, natural assets, and intangible assets. Contingencies

Contingencies are conditions or situations that may affect the financial position of the general government depending on the occurrence or nonoccurrence of some future events. For example, a government guarantee of a loan may result in an expense if the debtor defaults, but it will not be known whether the expense will incur, when it will occur and by how much until a default occurs. GFS 2002 follows the 1993 SNA by not treating any contingencies as financial assets or liabilities because they are not unconditional claims or obligations. However, contingencies are presented as memo items.

25

Official Economic Statistics by Tarun Das

9. Derived measures

Derived measures consist of aggregates and balancing items. They are important analytic tools that summarize the values of flows or stocks that have been individually recorded in the GFS system. Aggregates are summations of elements in a class of flows or stocks. For example, tax revenue is the sum of all flows classified as taxes. Balancing items are economic parameters obtained by subtracting one aggregate from another aggregate. For example, the net operating balance is obtained by subtracting the total expense aggregate from the total revenue aggregate. Net worth is equal to total assets less total liabilities.

26

Official Economic Statistics by Tarun Das

27

Official Economic Statistics by Tarun Das

Taxes Comprise: Total tax revenue [A.IV] minus social security contributions [A2.]. Note(s): The GFSM 1986 tax revenue category social security contributions [A2.] is classified to the GFSM 2001 category social contributions [12]. Apart from the exclusion of social contributions and a few changes to the descriptors of certain types of taxes, the GFSM 2001 classification of taxes is virtually identical to the GFSM 1986 classification of taxes.

Social Contributions Comprise: Social security contributions [A2.] plus contributions to government employee pension and welfare funds within government [A11.]. Note(s): Unlike in the GFSM 1986, social contributions by government as employer are not eliminated in the GFSM 2001 when data are consolidated with the social security funds.

Grants Comprise: Grants [A.VII]. Note(s): The breakdown of grants in the GFSM 1986 does not allow for a complete classification to the GFSM 2001 subcategories, because no distinction is made between grants from foreign governments and grants from international organizations. Additional country-specific information is needed to classify the GFSM 1986 category grants from abroad [A17.] to either grants from foreign governments [131], or grants from international organizations [132].

Other Revenue Comprise: Total nontax revenue [A.V] minus contributions to government employee pension and welfare funds within government [A11.] plus capital transfers from nongovernmental sources [A16.]. Note(s): These GFSM 1986 categories serve as a proxy for other revenue [14], because they include cash surpluses from departmental enterprise sales to the public. In the GFSM 1986, these receipts are classified as entrepreneurial and property income (“dividends”), i.e., on a net basis. According to the GFSM 2001 methodology, the gross revenues of market establishments are classified to the various subcategories of other revenue.

2 Expense Comprise: Current expenditure [C.III] plus capital transfers [C7.]. Note(s): Other capital expenditure in the GFSM 1986—the acquisition of fixed capital assets [C4.], purchases of stocks [C5.], and purchases of land and intangible assets [C6.]—are not classified here because they do not represent current operating activities of government. These items are classified in a separate table (see Net Acquisition of Nonfinancial Assets below).

Compensation of Employees Comprise: Wages and salaries [C1.1] plus employer contributions [C1.2]. Note(s): Unlike in the GFSM 1986, government social contributions as employer [C1.2] are not eliminated in the GFSM 2001 when data are consolidated with the social security funds.

28

Official Economic Statistics by Tarun Das Use of Goods and Services Comprise: Other purchases of goods and services [C1.3]. Note(s): Because of the inclusion of payments for property expenses other than interest, the GFSM 1986 category other purchases of goods and services is a proxy for the GFSM 2001 category of use of goods and services [22]. In the GFSM 2001, property expenses other than interest are classified to a separate category other expense [28], subcategory property expenses other than interest [281]. There is no equivalent of the GFSM 1986 aggregate total expenditure on goods and services [C1.] in the GFSM 2001.

Consumption of Fixed Capital Note(s): The accrual concept consumption of fixed capital [23] does not exist in the GFSM 1986 cash system and will show as being “not available” when GFSM 1986 cash data are classified to the detailed GFSM 2001 tables.

Subsidies Comprise: Subsidies [C3.1]. Note(s): Because of the inclusion of cash operating deficits of departmental enterprise sales to the public [C3.1.3], the GFSM 1986 category subsidies is a proxy for the GFSM 2001 category subsidies. In the GFSM 2001, the gross expenses of market establishments are classified to the various expense categories.

Grants Comprise: Current and capital transfers to other levels of national government [C3.2 and C7.1.1] Plus current and capital transfers abroad to governments, international organizations, and to supranational authorities [C3.5.1-2 and C7.2.1-2]. Note(s): The breakdown of these GFSM 1986 categories do not allow for a complete classification to the GFSM 2001 subcategories of grants, because no distinction is made between grants to foreign governments and grants to international organizations. Additional countryspecific information is needed to distinguish between grants to foreign governments [261] and those to international organizations [262].

Social Benefits Comprise: Current transfers to households [C3.4] Note(s): Current transfers to households [C3.4] is a proxy for social benefits [27] because it includes transfers that are not regarded as social benefits in the GFSM 2001 (e.g., scholarships and other educational benefits). Data on expenses classified as social benefits are not available from the GFSM 1986 expenditure categories and additional country-specific information is needed to make a proper classification to the GFSM 2001 categories.

Other Expense Comprise: Current transfers to nonprofit institutions [C3.3] plus other current transfers abroad [C3.5.4]10 plus domestic capital transfers to nonfinancial public enterprises [C7.1.2], to financial institutions [C7.1.3], to other enterprises [C7.1.4], and other domestic capital transfers [C7.1.5] plus other capital transfers abroad [C7.2.4].

29

Official Economic Statistics by Tarun Das Note(s): These GFSM 1986 categories serve as a proxy for the GFSM 2001 category other expense [28], because data on property expense other than interest are not separately available in the GFSM 1986. Additional country-specific information is needed to classify property expense other than interest—which is included in other purchases of goods and services [C1.3]—as other expense [28]. 1

D. Classification of Transactions in Nonfinancial Assets12 In the GFSM 2001, the results of transactions in a particular category of assets can be presented as either total acquisitions and total disposals, or the “net acquisition” of a particular asset. The net acquisition of inventories is referred to as “changes in inventories”. Transactions in fixed assets, valuables, and nonproduced assets are summarized as acquisitions, disposals, and consumption of fixed capital. The accrual concept consumption of fixed capital does not exist in the GFSM 1986 cash system.

Acquisition of Nonfinancial Assets Comprise: Acquisition of fixed capital assets [C4.], purchases of stocks [C5.], and purchases of land and intangible assets [C6.]. Note(s): Because the GFSM 1986 expenditure categories do not provide for the separate classification of purchases of valuables, no data can be reclassified to the GFSM 2001 category acquisition of nonfinancial assets: valuables [313.1]. Additional country specific information is needed to do so.

Classification of Transactions in Financial Assets and Liabilities Transactions in financial assets and liabilities—called financing in the GFSM 2001—are presented as the net acquisition of each category of financial asset and the net incurrence of each category of liability. That is, only the net change in the holding of a type of asset is presented, not gross acquisitions and gross disposals as with most nonfinancial assets. When the same type of financial instrument is held both as a financial asset and a liability, transactions in financial assets are presented separately from transactions in liabilities, rather than netting transactions in liabilities against transactions in financial assets.

10. Classification of Outlays by Function of Government (COFOG) The Classification of Functions of Government (COFOG) is a detailed classification of the functions, or socioeconomic objectives, that general government units aim to achieve through various kinds of outlays. Although there are many similarities between the classifications of the GFSM 2001/COFOG and those published in the GFSM 1986, there are also significant differences. The main differences can be summarized as follows: The GFSM 2001 does not have a category expenditure not classified by major group [B14.]. The items classified in the GFSM 1986 as expenditure not classified by major group are classified as general public services [701] in the GFSM 2001. The GFSM 2001 includes a new category environmental protection [705]. The GFSM 1986 does not classify these types of expenditures separately, but some environmental type expenditures are included in housing and community amenity affairs and services [B7.]. The GFSM 2001 classifies outlays on research and development (R&D) as a separate group (subcategory) within each division (main category). In most GFSM 1986/

30

Official Economic Statistics by Tarun Das

31

Official Economic Statistics by Tarun Das

32

Official Economic Statistics by Tarun Das

33

Official Economic Statistics by Tarun Das

11. Case Study- Indian Budgetary Statistics 1. Budget is the account of govt revenues and govt expenditure, and govt receipts and govt payments. 1. Receipts and Revenues- All revenues are receipts, but all receipts are not revenues. Receipts are classified as revenue receipts and capital receipts. •Revenue receipts consist of those receipts which do not have obligations for repayments such as taxes and duties, interest earnings, rents, dividends, profits, grants etc. •Capital receipts consist of loans from domestic and foreign sources and have attendant obligations of amortization and interest payments. 3. Expenditures and payments- Similarly, all expenditures are payments, but all payments are not expenditure. Repayments of loans are not expenditure. 4. Requited and unrequited transactions- Requited transactions are those in which money is paid or received in exchange of goods or services. But, transfers and grants are unrequited expenditure as nothing is received in return of money. Budget Accounts 1. Budget is account of government receipts and government expenditure 2. Both Receipts and Expenditure have two accounts- Revenue and Capital. 3. Revenue Account is the current account and is closed within a year. But capital account is not normally closed within a year and continues for a number of years until all obligations are met by the govt. 4. Govt has no obligations to anybody for revenue receipts. But, govt has obligations for capital receipts. Like receipts, expenditure has also two accounts- revenue and capital.  Revenue expenditures relate to current expenditure such as wages and salaries, maintenance, subsidies, grants, interest payments. These expenditures do not lead to asset creation or value addition, while capital expenditures (such as expenditures on plant, machinery, land, property etc.) lead to asset creation. Plan and non-plan expenditure- If any project or program is approved by the Planning Commission as a part of the National Five Year Plan or Annual Plan, expenditure for that project or program is called Plan Expenditure and all other expenditures are classified as Non-Plan Expenditures. 7. Developmental and non-developmental- Internationally, expenditures are classified as Developmental and Non-Developmental Expenditures. Any expenditure which leads to higher production and economic development is called developmental expenditure; all others are classified as Non-Developmental expenditures. There is no one-to-one correspondence among these classifications. Cross-Classification of expenditure in Budget 2006-07 (Rupees billion) Type Revenue Capital Total

Plan 26% 5% 31%

Non-plan 61% 8% 69%

34

Total 87% 13% 100%

Official Economic Statistics by Tarun Das

Classification of expenditure (a)Interest payments- Revenue, non-plan, non-developmental exp (b)Food subsidy- Revenue, non-plan, non-developmental expenditure (c)Fertilizer subsidy- Revenue, non-plan, developmental expenditure (d)Construction of national highways- Capital, plan, developmental expenditure (e) Construction of border roads- Capital, plan, non-developmental expenditure Salaries of staff of a National University- Revenue, plan, developmental expenditure (g) Salaries of staff of a National University under construction- Capital, plan, developmental Expenditure (h) Construction of government hospitals/ government schools- Capital, Plan, developmental expenditure (i) Grants for private hospitals/ private schools – Revenue, non-plan, developmental expenditure Classification of receipts 1. Revenue and capital receipts 2. Revenue receipts- Taxes and Non-taxes Taxes- Direct (personal income, corporate income, dividends tax) and indirect (customs, excise, services tax) Non-taxes- Interest receipts, profits, dividends, fees, service charges, grants 3. Capital receipts include recovery of loans, disinvestment of government equity, market and other borrowings, public funds 4. Non-debt creating receipts include revenue receipts, recovery of loans and disinvestment of govt equity. Different concept of deficit Revenue deficit= Revenue expenditure less revenue receipts Capital deficit= Capital expenditure less capital receipts Budget deficit= Total expenditure less total receipts= Revenue deficit +Capital deficit Gross Fiscal Deficit= Total expenditure less Non-Debt receipts= Total Expenditure less (Revenue receipts + recovery of loans + disinvestment of govt equity) Gross Primary deficit= Gross Fiscal Deficit less interest payments Net Fiscal Deficit= Gross Fiscal Deficit less Net Lending Net Primary Deficit= Net Fiscal Deficit less Net Interest Payments Net Lending = Loans given by the central govt to the States and PSUs less recoveries of past loans from them Net Interest Payments = Interest payments less interest receipts Net RBI Credit to the central govt = RBI’s holdings of Treasury Bills, govt of India dated securities, rupee coins, and loans and advances taken from RBI.

35

Official Economic Statistics by Tarun Das

36

Official Economic Statistics by Tarun Das

Fiscal Responsibility & Budget Management (FRBM) Act 2003 of India • FRBM Act 2003 and FRBM Rules 2004 came into force w.e.f. 5 July 2004. • The Act mandates the Central govt to eliminate revenue deficit by March 2009 and to reduce fiscal deficit to 3% of GDP by March 2008. • Under section 7 of the Act, the central govt is required to lay before both houses of Parliament Medium Term Fiscal Policy Statement, Fiscal Policy Strategy Statement and Macro Economic Framework Statement along with the Annual Financial Statement and Demand for Grants. FRBM Rules 2004 • Reduction of revenue deficit by 0.5% of GDP or more every year. • Reduction of gross fiscal deficit by 0.3% of GDP or more every year. • No assumption of additional debt exceeding 9% of GDP for 2004-05 and progressive reduction of this limit by at least one percentage point of GDP in each subsequent year. • No guarantee in excess of 0.5% of GDP in any financial year. • Four fiscal indicators to be projected for the medium term. These include revenue deficit, fiscal deficit, tax revenue and total debt as % of GDP. • Greater transparency in the budgetary process, rules, accounting standards and policies having bearing on fiscal indicators. • Quarterly review of the fiscal situation. • The rules mandate the Central Government to take appropriate collective action in the case of revenue and fiscal deficits exceeding 45% of the budget estimates, or total non-debt receipts falling short of 40% of the budget estimates at the end of half year of the financial year. • The rules also prescribe the formats for the mandatory statements. Table-2 Current Fiscal Background (as % of GDP) Item 1.Revenue Deficit 2.Fiscal Deficit 3.Primary Deficit

2005-06 Actual 2.6 4.1 0.4

2006-07 BE 2.1 3.8 0.2

37

2006-07 RE 2.0 3.7 0.1

2007-08 BE 1.5 3.3 (-) 0.2

Official Economic Statistics by Tarun Das Table-2 Medium Term Fiscal Indicators Items 1.Revenue Def as % of GDP 2.Fiscal Deficit as % of GDP 3. Gross tax rev. as % of GDP 4.Year-end debt stock (% of GDP)

2006-07 RE 2007-08 BE 2008-09 Target 2.0 1.5 0.0 3.7 3.3 3.0

2009-10 Target 0.0 3.0

11.4

11.8

12.3

12.7

64.4

61.4

58.6

56.0

GFS WORKSHOP SESSION-1 Indian Budget 2007-08 Given data on Indian Budget 2007-08, estimate the following in Rs.billion and express these as percentage to GDP: (a) Revenue deficit (b) Capital deficit (c) Budget deficit (d) Gross Fiscal Deficit (e) Gross Primary deficit (f) Net lending (g) Net interest payments (h) Net Fiscal Deficit (i) Net Primary deficit Items

Rs. Billion

1.Tax revenues

4039

2.Non-tax revenues 2a.Interest receipts

825 193

3. Capital receipts 3a. Recovery of loans 3b. Disinvestment of govt. equity 4.Revenue expenditure 4a. Interest payments 5.Capital expenditure 5a. Loans to States and PSUs

1941 15 417 5579 1590 1226 45

6.Memo item: GDP at current mp

45730

38

Official Economic Statistics by Tarun Das GFS WORKSHOP SESSION-2 1.

The following table provides the Fiscal Statements for Mongolian General Government sector for the year 2003 (Jan-Dec) as per GFS Accounting standards. However, it has the following two limitations: (a) It does not estimate the Consumption for Fixed Capital, and (b) It does not provide the Statement for Cash Balance for 2003 (in the table cash balance is given for 2002). 2. Estimate depreciation expenses (i.e. consumption of fixed capital) by taking broad categories of assets and assuming expected life of assets. Then rework GFS Accounts for Mongolia General Government (GG) 2003 in Billion MNT Billion B. Statement of sources and Billion A. Statement of govt operations MNT uses of cash (2002) MNT 1 Cash receipts from 1. Revenue 599.94 operating activities 489.77 2. Expense 465.85 11 Taxes 287.27 GOB Gross operating balance (1-2) 134.09 12 Social securities 54.93 Less Consumption of fixed capital 0 13 Grants 19.31 NOB Net operating balance 134.09 14 Other receipts 128.26 2 Cash payments for 31 Net acquisition of nonfinancial assets 139.02 operating expenses 402.92 NLB Net lending/ borrowing (NOB-31) -4.93 21 Compen. of employees 112.1 32 Net acquisition of financial assets 54.86 22 Purchase of goods/services 163.93 33 Net incurrence of liabilities 63.22 24 Interest 20.04 NLB Statistical discrepancy 3.43 25 Subsidies 8.79 Statement of other economic flows 26 Grants 0.62 Balance sheet 27 Social Benefits 90.62 6 Net worth -449.42 28 Other payments 6.82 CIO Net cash inflow from 61 Nonfinancial assets 1306.79 oper.activities 86.85 31.1 Purchases of 62 Financial assets 0 nonfinancial assets 99.65 63 Liabilities 1756.21 31.2 Sales of nonfinan. assets 0 31 Net cash outflow from investments in nonfinancial assets CSD Cash surplus/ deficit 32x Net acquisition of fin.assets,excl.cash 321x Domestic 322x Foreign 323 Monetary gold and SDR 33 Net incurrence of liability 331 Domestic 332 Foreign NFB Net cash inflow from financial activities NCB Net change in the stock of cash CSD Statistical discrepancy

39

99.65 -12.8 37.04 36.74 0.3 0 65.36 -16.86 82.22 28.32 15.52 0

Official Economic Statistics by Tarun Das

Table-1 Revenue 1 Revenue

Billion MNT 599.94

11 Taxes 111 taxes on income, profits, capital gains 1111 Individuals 1112 Corporations and other enterprises

353.69 97.58 28.8 68.78

112 Taxes on payroll and workforce 113 Taxes on property 114 Taxes on goods and services 1141 General taxes on goods and services 1142 Excises

0 12.66 209.96 121.87 58.58

115 Taxes on Intnl. trade & transactions

32.65

116 Other taxes 12 Social contributions 121 Social security contributions 122 Other social contributions 13 Grants

0.84 90.84 90.84 0 8.73

131 From foreign governments 132 From international organisations 133 For other general govt units 14 other revenue

8.66 0.06 0.01 146.68

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Table-2 Expense by economic type 2 Expense 21 Compensation of employees 211 Wages and salaries 212 Social contributions 22 Use of goods and services 23 Consumption of fixed capital 24 Interest 25 Subsidies 26 Grants 261 To foreign governments 262 To international organisations 263 To other general govt units 2631 Current 2632 Capital 27 Social Benefits 28 Other expense 281 Property expense other than interest 282 Miscellaneous other expense 2821 Current 2822 Capital

Billion MNT 465.85 142.92 117.34 25.58 178.23 0 17.65 9.38 0.73 0 0.72 0.01 0.01 0 116.81 0.13 0 0.13 0.13 0

Official Economic Statistics by Tarun Das

Table-3 Transactions in assets & liabilities 3 Change in net worth from transacts. 31 Net acquisition of nonfinl. assets 311 Fixed assets 3111 Buildings and structures 3112 Machinery and equipment 3113 Other fixed assets 312 Inventories 313 Valuables 314 Nonproduced assets 3141 Land 3142 Subsoil assets 3143 Other naturally occurring assets 3144 Intangible nonproduced assets 32 Net acquisition of financial assets by instruments 3202 Currency and deposits 3203 Securities other than shares 3204 Loans 3205 Shares and other equity 3206 Insurance technical services 3207 Financial derivatives 3208 other accounts receivables By debtor 321 Domestic 322 Foreign 323 Monetary gold and SDR 33 Net incurrence of liabilities by instruments 3302 Currency and deposits 3303 Securities other than shares 3304 Loans 3305 Shares and other equity 3306 Insurance technical reserves 3307 Financial derivatives 3308 Other accounts payable By creditor 331 Domestic 332 Foreign Table 4 Holding gains in assets & liabl. Table-5 Other changes in the volume of assets and liabilities

139.02 100.14 96.77 1.38 1.99 38.01 0 0.87 0 0 0.64 0.23 54.86 160.4 0 19.17 -19.37 0 0 0 62.67 -7.81 0 63.22 0 78 -22.66 0 0 0 0 162.98 -99.76

41

Table-6 Balance Sheet 6 Net worth 61 Nonfinancial assets 611 Fixed assets 6111 Building and structures 6112 Machinery & equipment 6113 Other fixed assets 612 Inventories 613 Valuables 614 Nonproduced assets 6141 Land 6142 Subsoil assets 6143 Other natural assets 6144 Intangible nonprd. asset 62 Financial assets by instruments 6202 Currency and deposits 6203 Securities except shares 6204 Loans 6205 Shares and other equity 6206 Ins. technical reserves 6207 Financial derivatives 6208 Other accounts payable By creditor 621 Domestic 622 Foreign 623 Monetary god and SDR 63 Liabilities by instruments 6302 Currency and deposits 6303 Securities except shares 6304 Loans 6305 Shares and other equity 6306 Insurance tech. services 6307 Financial derivatives 6308 other accounts payable By debtor 631 Domestic 632 Foreign Memo. items 6M2 Net financial worth 6M3 Debt at market value 6M35 Debt at face value 6M4 Debt at nominal value 6M5 Arrears 6M6 Obligation for social security 6M7 Contingent liabilities

-449.42 1306.79 1140.59 788.79 309.16 42.64 165.97 0 0.23 0 0 0 0.23 1477.94 162.96 0 931.38 357.7 0 0 25.9 1477.94 1477.94 0 0 1756.21 0 108.84 1626.92 0 0 0 20.45 320.72 1435.49 -278.28 n.a. n.a. n.a. n.a. n.a. n.a.

Official Economic Statistics by Tarun Das

Table-7 Outlays by functions of govt. 7 Total outlays

(for 2002) 502.58

701 General public services 7017 Public debt transactions 7018 General transfers between levels of govt 702 Defense

88.94 20.04

703 Public order and safety

29.76

704 Economic affairs

95.88

7042 Agriculture and allied

15.07

7043 Fuel and energy 7044 Mining, manufacturing, construction 7045 Transport

17.28 3.57 31.78

0 24.91

7046 Communications

20.4

705 Environmental protection

1.47

706 Housing and community services 707 Health 7072 Outpatient services

7.57 52.54 48.7

7073 Hospital services 7074 Public health services 708 Recreation, culture and religion 709 Education

0 3.84 15.88 88.23

7091 Pre-primary and primary education

67.25

7092 Secondary education

15.12

7094 Tertiary education

5.86

710 Social protection 7 Statistical discrepancy, total outlay

97.4 0

42

Table-8 Transactions in financial assets and liabilities by sector 82 Net acquisition of financial assets 821 Domestic 8211 General government 8212 Central bank 8213 Other depository corporations 8214 Financial corporations n.i.e. 8215 Nonfinancial corporations 8216 Households & NPIs serving households 822 Foreign 8221 General government 8227 International organisations 8228 Financial operations other than international organisations 8229 Other non-residents 823 Monetary gold and SDR 83 Net incurrence of liabilities 831 Domestic 8311 General government 8312 Central bank 8313 Other depository corporations 8314 Financial corporations n.i.e. 8315 Nonfinancial corporations 8316 Households & NPIs serving households 832 Foreign 8321 General government 8327 International organisations 8328 Financial operations other than international organisations 8329 Other non-residents

54.87 62.68 -35.3 58.57 20.37 0 15.81 3.23 -7.81 0 0 -7.81 0 0 63.22 162.98 -34.73 169.28 19.55 0 8.88 0 -99.76 0 0 0 -99.76

Official Economic Statistics by Tarun Das

GFS Workout Session-3 Differences between Australian Accounting Standards (AAS) And GFS Accounting Standards Issue 1. Asset write-downs

AAS Treatment Treated as part of operating expenses.

2. Gains/ losses of assets

Treated as part of operating income/ expenses.

3. Provisions for bad and doubtful debts.

Treated as part of operating expenses and included in the balance sheet as an offset to assets (as per requirements by the Australian government). Treated as operating income and expenses.

4. Interest flows related to swaps and other financial derivatives. 5. Acquisitions of defense weapon platforms.

6. Valuation of assets and liabilities.

7. Finance leases

8. Compensation to labor

Treated as capital expenditure. Defense weapon platforms appear as an asset on the balance sheet. Depreciation expenses on the assets are recorded in the operating statement. Classes of assets and liabilities are measured using a range of methods. The predominant methods for valuing different asset classes include historic cost and market value. Treats fiancé leases as if an asset were purchased from borrowings. That is, the lease payment is split into an interest component (which is shown as an operating expense) and a principal component. The asset and liability are recorded on the balance sheet. The convention does not apply to the cash flow statement, which does not record the acquisition of the asset or the liability.

GFS Treatment Treated as revaluations (other than economic flows) except for mutually agreed write-downs, and therefore removed from expenses. Treated as revaluations (other than economic flows) and therefore removed from revenues/ expenses. Act of creating provisions is not considered an economic event and is therefore not considered an expense or included in the balance sheet. Treated as other economic flows and not so included in revenues and expenses. Treated as an expense at the time of acquisition. Defense weapon platforms do not appear as an asset on the balance sheet, and so no depreciation is recorded in the operating statement. Individual assets and liabilities are measured at current market value based on current market prices or a suitable proxy where market prices are not available. As per the accounting standard, except that the GFS flow statement includes the acquisition of the asset as a supplementary item for the calculation of the surplus/ deficit and underlying cash balance.

Takes only wages and salaries. Compensation to employees Govt contributions to employees includes both wages and insurance and pension funds are salaries and Govt’s treated as personal transfers. contributions to employees' insurance and pension funds.

43

Official Economic Statistics by Tarun Das Table-1 Australian General Government Sector Operating Balance in 2005-06 As per Australian Accounting Standards (in Australia $ million) Item AAS Sl.no. 1 1.1 1.2 1.3 1.4 2 2.1 2.2 2.2.1 2.2.2 2.3 3 3.1 3.2 3.3 4 5 5.1 5.2 5.2.1

Total tax revenue Income tax Indirect tax Fringe benefits tax Other taxes Total non-tax revenue Sales of goods and services Interests and dividends of which, swap interest revenue Other interest revenue Other non-tax revenue Total Revenue Total gains Foreign exchange gains Proceeds from sale of assets Other economic revaluations Total income (1+2+3) Expenses Total goods and services Compensation to employees Suppliers Of which, defense weapons platforms

206600 172114 28116 4084 2286 17565 4604 8805 1981 6824 4156 224165 1348 139 1 1208 225513 56684 23555 17701 3873

5.2.2

Other supplies 5.3 Depreciation and amortization Of which, defense weapons 5.3.1 platforms depreciations

13828 4617 2427

Other depreciations 5.4 Net write-down of assets of which, mutually agreed write5.4.1 downs 5.4.2 Unilateral write-downs

2190 3465 923

5.3.2

5.5 5.6 5.7 6 6.1 6.2

Losses from sale of assets Foreign exchange losses Other goods and services Total subsidies and grants Personal benefits Subsidies

44

2542 2 0 7344 147202 92981 11099

Official Economic Statistics by Tarun Das Grants Borrowings cost 7.1 Interests of which, swap interest expenses 6.3 7

43122 5911 5843 1845

7.1.1

Other interest expenses 7.2 Other borrowing costs 8 Total expenses (5+6+7) 9 Operating balance (4-8)

3998 68 209797 15716

7.1.2

Assignment Given above information on Australian Accounting Standards, estimate the operating balance as per GFS accounting standards for Australian General Government Sector for 2005-06.

Answers to Workout Sessions 45

Official Economic Statistics by Tarun Das

UNSIAP GFS Workout Session-1 Indian Budget 2007-08 Items 1.Tax revenues 2.Non-tax revenues 2a.Interest receipts

Rs. Billion 4039 825 193

3. Capital receipts 3a. Recovery of loans 3b. Disinvestment of govt. equity

1941 15 417

4.Revenue expenditure 4a. Interest payments

5579 1590

5.Capital expenditure 5a. Loans to States and PSUs

1226 45

6.Memo item: GDP at current mp

47122

Exercise-1 Given data on Indian Budget 2007-08 as above, Estimate the following in Rupees Billion And express these as percentages to GDP. Revenue deficit = (4) - (1) - (2) Capital deficit = (5) - (3) Budget deficit = (4) + (5) - (1) - (2) - (3) Gross Fiscal Deficit= (4)+(5) - (1)-(2)- 3a - 3b Gross Primary deficit = GFD - 4a Net lending = 5a - 3a Net interest payments = 4a - 2a Net Fiscal Deficit = GFD - net lending Net Primary deficit = NFD- net int. payments

46

Rs. Billion 715 -715 0 1509 -81 30 1397 1479 82

% to GDP 1.5 -1.5 0.0 3.2 -0.2 0.1 3.0 3.1 0.2

Official Economic Statistics by Tarun Das

GFS WORKSHOP-2 Mongolian Government Finance Statistics for 2003 are based on the IMF GFS Manual-2001 Manual. However it has the following limitations: 1. It does not estimate consumption of fixed capital. 2. It does not provide cash accounting for the year 2003. (a) Given the data and information for the Mongolian GG in the following table, the participants are required to estimate consumption of fixed capital by assuming life span and depreciation rates for different groups of fixed non-financial assets (depending on their knowledge and experience). (b) Then rework the Statement on Expenses and the Statement on Government Operations. GFS Accounts Mongolia Revised GG 2003 Items Billion MNT Billion MNT Statement of govt operations 1. Revenue 599.94 599.94 2. Expenses 465.85 515.54 GOB Gross operating balance (1-(2-3)) 134.09 134.09 Less Consumption of fixed capital 0 49.69 NOB Net operating balance 134.09 84.40 31 Net acquisition of nonfinancial assets 139.02 139.02 NLB Net lending/ borrowing (NOB-31) -4.93 -54.62 32 Net acquisition of financial assets 54.86 54.86 33 Net incurrence of liabilities 63.22 112.91 NLB Statistical discrepancy (-NLB+32-33) -3.43 -3.43 Statement of other economic flows Balance sheet 6 Net worth -449.42 -499.11 61 Nonfinancial assets 1306.79 1306.79 62 Financial assets 0 0 63 Liabilities 1756.21 1805.90 Statement of sources and uses of cash (for 2002) 1 Cash receipts from operating activities 489.77 11 Taxes 287.27 12 Social securities 54.93 13 Grants 19.31 14 Other receipts 128.26 2 Cash payments for operating expenses 402.92 21 Compensation of employees 112.1 22 Purchases of goods and services 163.93 24 Interest 20.04 25 Subsidies 8.79 26 Grants 0.62 27 Social Benefits 90.62 28 Other payments 6.82 CIO Net cash inflow from oper.activities 86.85 31.1 Purchases of nonfinancial assets 99.65 31.2 Sales of nonfinancial assets 0 31 Net cash outflow from investments 99.65 in nonfinancial assets

47

Official Economic Statistics by Tarun Das CSD Cash surplus/ deficit 32x Net acquisition of fin.assets,excl.cash 321x Domestic 322x Foreign 323 Monetary gold and SDR 33 Net incurrence of liabilities 331 Domestic 332 Foreign NFB Net cash inflow from financial activities NCB Net change in the stock of cash CSD Statistical discrepancy Table-1 Revenue 1 Revenue 11 Taxes 111 taxes on income, profits, capital gains 1111 Individuals 1112 Corporations and other enterprises 112 Taxes on payroll and workforce 113 Taxes on property 114 Taxes on goods and services 1141 General taxes on goods and services 1142 Excises 115 Taxes on Intnl. trade & transactions 116 Other taxes 12 Social contributions 121 Social security contributions 122 Other social contributions 13 Grants 131 From foreign governments 132 From international organisations 133 From other general govt units 14 other revenue Table-2 Expense by economic type 2 Expense 21 Compensation of employees 211 Wages and salaries 212 Social contributions 22 Use of goods and services 23 Consumption of fixed capital 24 Interest 25 Subsidies 26 Grants 261 To foreign governments 262 To international organisations 263 To other general govt units 2631 Current 2632 Capital 27 Social Benefits 28 Other expense 281 Property expense other than interest

48

-12.8 37.04 36.74 0.3 0 65.36 -16.86 82.22 28.32 15.52 0 599.94 353.69 97.58 28.8 68.78 0 12.66 209.96 121.87 58.58 32.65 0.84 90.84 90.84 0 8.73 8.66 0.06 0.01 146.68

599.94 353.69

465.85 142.92 117.34 25.58 178.23 0.00 17.65 9.38 0.73 0 0.72 0.01 0.01 0 116.81 0.13 0

515.5404 142.92 117.34 25.58 178.23 49.69 17.65 9.38 0.73 0 0.72 0.01 0.01 0 116.81 0.13 0

90.84

8.73

146.68

Official Economic Statistics by Tarun Das 282 Miscellaneous other expense 2821 Current 2822 Capital Table-3 Transactions in assets & liabilities 3 Change in net worth from transactions 31 Net acquisition of nonfinancial assets 311 Fixed assets 3111 Buildings and structures 3112 Machinery and equipment 3113 Other fixed assets 312 Inventories 313 Valuables 314 Nonproduced assets 3141 Land 3142 Subsoil assets 3143 Other naturally occurring assets 3144 Intangible nonproduced assets 32 Net acquisition of financial assets by instruments 3202 Currency and deposits 3203 Securities other than shares 3204 Loans 3205 Shares and other equity 3206 Insurance technical services 3207 Financial derivatives 3208 other accounts receivables By debtor 321 Domestic 322 Foreign 323 Monetary gold and SDR 33 Net incurrence of liabilities by instruments 3302 Currency and deposits 3303 Securities other than shares 3304 Loans 3305 Shares and other equity 3306 Insurance technical reserves 3307 Financial derivatives 3308 Other accounts payable By creditor 331 Domestic 332 Foreign Table 4 Holding gains in assets & liabilities Table-5 Other changes in the volume of assets and liabilities Table-6 Balance Sheet 6 Net worth 61 Nonfinancial assets 611 Fixed assets 6111 Building and structures

49

0.13 0.13 0

0.13 0.13 0

139.02 100.14 96.77 1.38 1.99 38.01 0 0.87 0 0 0.64 0.23 54.86 60.2 60.4 0 19.17 -19.37 0 0 0 54.86 62.67 -7.81 0 63.22

139.02

0 78 -23.66 0 0 0 0 63.22 162.98 -99.76

0 78 -23.66 0 0 0 49.69 112.91 212.67 -99.76

-449.42 1306.79 1140.59 788.79

-499.1104 1306.79 1140.59 788.79

54.86

112.91

this year 139.02 100.14 96.77

Official Economic Statistics by Tarun Das 6112 Machinery and equipment 6113 Other fixed assets 612 Inventories 613 Valuables 614 Nonproduced assets 6141 Land 6142 Subsoil assets 6143 Other naturally occurring assets 6144 Intangible nonproduced assets 62 Financial assets by instruments 6202 Currency and deposits 6203 Securities other than shares 6204 Loans 6205 Shares and other equity 6206 Insurance technical reserves 6207 Financial derivatives 6208 Other accounts payable By creditor 621 Domestic 622 Foreign 623 Monetary god and SDR 63 Liabilities by instruments 6302 Currency and deposits 6303 Securities other than shares 6304 Loans 6305 Shares and other equity 6306 Insurance technical services 6307 Financial derivatives 6308 other accounts payable By debtor 631 Domestic 632 Foreign Memorandum items 6M2 Net financial worth 6M3 Debt at market value 6M35 Debt at face value 6M4 Debt at nominal value 6M5 Arrears 6M6 Obligation for social security benefit 6M7 Contingent liabilities 6M71 Guaranteed debt at market value 6M72 Uncapitalized military weapons Table-7 Outlays by functions of govt. 7 Total outlays 701 General public services 7017 Public debt transactions 7018 General transfers between levels of govt 702 Defense

50

309.16 42.64 165.97 0 0.23 0 0 0 0.23

309.16 42.64 165.97 0 0.23 0 0 0 0.23

1477.94 162.96 0 931.38 357.7 0 0 25.9 1477.94 1477.94 0 0 1756.21

1477.94 162.96 0 931.38 357.7 0 0 25.9 1477.94 1477.94 0 0 1805.90

0 108.84 1626.92 0 0 0 20.45

0 108.84 1626.92 0 0 0 70.14

320.72 1435.49

320.72 1435.49

-278.28 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. (for 2002) 502.58 88.94 20.04 0 24.91

-278.28 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

1.38 1.99 38.01 0 0.87 0 0 0.64 0.23

Official Economic Statistics by Tarun Das 703 Public order and safety 704 Economic affairs 7042 Agriculture and allied 7043 Fuel and energy 7044 Mining, manufacturing, construction 7045 Transport 7046 Communications 705 Environmental protection 706 Housing and community services 707 Health 7072 Outpatient services 7073 Hospital services 7074 Public health services 708 Recreation, culture and religion 709 Education 7091 Pre-primary and primary education 7092 Secondary education 7094 Tertiary education 710 Social protection 7 Statistical discrepancy, total outlay Table-8 Transactions in financial assets and liabilities by sector 82 Net acquisition of financial assets 821 Domestic 8211 General government 8212 Central bank 8213 Other depository corporations 8214 Financial corporations n.i.e. 8215 Nonfinancial corporations 8216 Households & NPIs serving households 822 Foreign 8221 General government 8227 International organisations 8228 Financial operations other than Intl.Orgns. 8229 Other non-residents 823 Monetary gold and SDR 83 Net incurrence of liabilities 831 Domestic 8311 General government 8312 Central bank 8313 Other depository corporations 8314 Financial corporations n.i.e. 8315 Nonfinancial corporations 8316 Households & NPIs serving households 832 Foreign 8321 General government 8327 International organisations 8328 Financial operations other than international organisations 8329 Other non-residents

51

29.76 95.88 15.07 17.28 3.57 31.78 20.4 1.47 7.57 52.54 48.7 0 3.84 15.88 88.23 67.25 15.12 5.86 97.4 0

54.87 62.68 -35.3 58.57 20.37 0 15.81 3.23 -7.81 0 0 -7.81 0 0 63.22 162.98 -34.73 169.28 19.55 0 8.88 0 -99.76 0 0 0

112.91 212.67 14.96 169.28 19.55 0 8.88 0 -99.76 0 0 0

-99.76

-99.76

Official Economic Statistics by Tarun Das

Estimation of Consumption of Fixed Capital Table-6 Balance Sheet 6 Net worth 61 Nonfinancial assets 611 Fixed assets 6111 Building and structures 6112 Machinery and equipment 6113 Other fixed assets 612 Inventories 613 Valuables 614 Nonproduced assets 6141 Land 6142 Subsoil assets 6143 Other naturally occurring assets 6144 Intangible nonproduced assets

Depre -449.42 1306.79 1140.59 788.79 309.16 42.64 165.97 0 0.23 0 0 0 0.23

52

this year 139.02 100.14 96.77 1.38 1.99 38.01 0 0.87 0 0 0.64 0.23

last year 1167.77 1040.45 692.02 307.78 40.65 127.96 0 -0.64 0 0 -0.64 0

43.29 20.76 18.47 4.07 6.40 0 0 0 0 0 0

Depre

Life

%

Years

3% 6% 10% 5% 0%

30 15 10

0% 0% 0% 0%

Official Economic Statistics by Tarun Das GFS WORKSHOP SESSION-3 As per Australian Accounting Standards (in Australia $ million) Sl.no Item AAS .

1 1.1 1.2 1.3 1.4 2 2.1 2.2 2.2.1 2.2.2 2.3 3 3.1 3.2 3.3 4 5 5.1 5.2 5.2.1 5.2.2 5.3 5.3.1

206600 172114 28116 4084 2286 17565 4604 8805 1981 6824 4156 224165 1348 139 1 1208 225513

Suppliers Of which, defense weapons platforms

17701 3873

Other supplies Depreciation and amortization Of which, defense weapons platforms depreciations

13828 4617 2427

Plus

2190 3465 923

Plus Plus

2190 0 923

2542

Plus

2542

Minus

0 0\ 7344 54221

Other depreciations 5.4 Net write-down of assets 5.4.1 of which, mutually agreed write-downs 5.4.2 Unilateral wtite-downs Losses from sale of assets Foreign exchange losses 5.7 Other goods and services 6 Total subsidies and grants 5.6

GFS

Total tax revenue Income tax Indirect tax Fringe benefits tax Other taxes Total non-tax revenue Sales of goods and services Interests and dividends of which, swap interest revenue Other interest revenue Other non-tax revenue Total Revenue Total gains Foreign exchange gains Proceeds from sale of assets Other economic revaluations Total income (1+2+3) Expenses Total goods and services Compensation to employees

5.3.2

5.5

Plus/ Minus to get GFS

56684 23555

2 0 7344 147202

53

Plus Plus Plus Plus Plus Plus Minus Plus Plus

Minus Minus Minus

Add PerBenft Minus

Minus

Minus

Minus Plus

206600 172114 28116 4084 2286 15584 4604 6824 0 6824 4156 222184 0 0 0 0 222184 139898 116536 13828 0 13828 2190 0

Official Economic Statistics by Tarun Das 6.1

Personal benefits

6.2

92981

Subsidies 6.3 Grants 7 Borrowings cost 7.1 Interests 7.1.1 of which, swap interest expenses

11099 43122 5911 5843 1845

7.1.2

3998 68 209797 15716

Other interest expenses 7.2 Other borrowing costs 8 Total expenses (5+6+7) 9 Operating balance (4-8)

54

Part of CtoL Plus Plus Plus Minus Plus Plus

0 11099 43122 4066 3998 0 3998 68 198185 23999