LIMITATIONS OF PROVINCIAL FINANCE 193
(4) Budgetary Rules
Besides being subject to the ordinary rules of the Budget System introduced into India for the first time by Mr. Wilson in 1860, [1] by which they were required to submit their budget estimates for sanction to the Government of India, and to observe the rules of appropriation in the execution of the grants, Provincial Governments were further given to understand that without the previous consent of the Government of India they—
(i) Could not exhaust their balances in the Imperial Treasury.
Prior to 1887 a Provincial Government could propose in its budget estimates to draw upon the whole of its balance. But by the Rules then framed the Provincial Government was required to maintain at all time a certain minimum balance in the Imperial treasury, the amount of which varied with each successive settlement.
(ii) Could not budget for a deficit, that is for provincial expenditure in excess of the provincial revenues of the year.
The stringency of this rule [2] was a little softened, so that a Province could after 1912 budget for a deficit, if it satisfied the Government of India that the cause was exceptional and non-recurring, [3] but it was at the same time provided that, if this drawing upon the balances to make up the deficits resulted in reducing the balance below the prescribed minimum, the budget for a deficit would be sanctioned only if the Government of India was able to allow the Provincial Government in question an overdraft to the extent necessary to restore the balance to the required minimum from the general balances to be repaid in such rates of interest and instalments as may be prescribed. [4]
(iii) Could not exceed during the currency of the year the expenditure on any head of account as finally sanctioned for it, for that year, by the Government of India.
1 Rule 11 of 1892, 13 of 1897, and 19 of 1912.
2 Rule 8 of 1892.
3 Rule 21 of 1912.
4 Rule 21 and 22 of 1912.