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(7) Explanation of variations: A brief narrative explanation should be given of the causes
(with amounts involved in each case) of substantial differences between the figures
adopted for the revised estimates of the current year and (i) the actual of the previous
year, and (ii) budget allotment for the current year. Similar explanation should be given
for differences between the figures of the budget estimate of the ensuing year and the
revised estimate of the current year. Large variations which compensate each other
should also be indicated. (Para 326)

(8) The revised estimate for the current and the budget estimate for the next year should be
fixed after taking into account the expenditure of the previous year and comparing the
expenditure during the first seven months of the year with the corresponding period of
the previous year. A full explanation of special features and any exceptional and
abnormal adjustments (with amounts involved) included in each period of the pervious
and current year as also in the next year, should be given in the explanatory note
accompanying the estimates. The financial effect of variations on account of specific
reasons should be clearly brought out under each Demand. (Para 327)

(9) When the expenditure anticipated in the last five months of the year is disproportionate
as compared with (i) the first seven months of the year or (ii) the corresponding period
of the previous year, reasons for the disproportionate expenditure should be given in the
revised estimate. Special and non-recurring items of expenditure in a year should show a
corresponding saving in the following year. Likewise, when transfers are made from one
demand to another due to changes in classification, the saving shown under one demand
should agree with the excess shown under the other demand.

Chapter 4 Budget Estimates, Expenditure, Budget Control and Completion Reports Page 70 of 535