It is rarely that one comes across a government publication which is widely informative and at the same

time so lucidly written as to receive acceptance from the public. The present work is a rarity of this kind
and among my cherished possession is a copy of an earlier edition which I purchased during my
probation days. I found it then as I do now to be a well delineated outline of government systems of
accounts and audit, useful not only to government servants but to all those interested in these fields of
activity. With the separation of the finances of the Central Government from those of the Provincial
Governments, which resulted from the Montague Chelmsford Reforms, the Provincial Government had
certain assets and liabilities definitely assigned to them and from 1921-22 it was found necessary to
maintain for each Provincial Governments a separate account identical in form with that maintained till
then for the Government of India. The next set of important reforms followed in the wake of the
Government of India Act 1935, when a complete separation was effected from 1st April 1937 of the
accounts of the Provincial Governments from the accounts of the Central Government and the
constitution of the accounts of each autonomous province as an independent unit with separate case
balances. The structure of classification in government accounts was enlarged to meet the greater
devolution of authority of the Provinces, but was not otherwise changed radically. By and large, initially,
the same form of accounts continued after independence and after the Constitution came into force.
Reviews of the classification structure carried out in the early sixties only touched on the fringe making
some changes at the Major Head level and did nothing to deal with the problems which were coming to
the forefront alongwith the rapid planned economic development of the country and the launching of
social welfare programmes by the Central and the State Governments. The gap between the budget and
the accounts was widening. It was becoming obvious that the faith placed in the traditional accounting
system and the standard methods of communicating information on plan programmes was misplaced.
Built around departments rather than functions and programmes, the accounting system had gradually
ceased to be of use in monitoring plan programmes. In any case, information was not available in time
to make any mid-course corrections during the period of implementation. The need in the late sixties
and the early seventies was for a radical switch in the basic principles of