The budgetary procedure is geared to serve two considerations, viz. financial accountability and control of expenditure.

The main objective of this procedure is to ensure that the funds are raised and moneys are spent by the executive departments in accordance with the rules and regulations and within the limits of sanction and authorisation by the legislature or council.

Mostly, the levels of taxations and rates and the ceilings on expenditure are determined on the occasion of Budget preparation.

Municipal budget formats and heads of accounts vary from state to state. There are variations between the corporation and municipalities.

One important feature of the municipal budgets is that there is no strict separation between revenue and capital items; usually there is a ‘head’ called extraordinary items which cover most of the capital transactions.

There are, however, a number of special funds (e.g. roads) or in some cases separate budgets for specific municipal functions (e.g. education) or enterprise activities (e.g., water supply and sanitation, transport, electricity, etc.)