final bsnl budget

PROJECT REPORT

ON

“BUDGET ANALYSIS

AT

BSNL”SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE DEGREE

FOR THE BACHELORS OF BUSINESS ADMINISTRATION AFFILIATED FROM

HNB GARHWAL UNIVERSITY, SRINAGAR

Submitted by:

PRAGYA CHAURASIA

FINANCE

2013-2016

INTERNAL GUIDE EXTERNAL GUIDE

MR JAYANT MAHAJAN MR. SHANKAR SHARMA

LECTURER BRANCH MANAGER

ITM BSNL

1

DEPARTMENT OF MANAGEMENT

INSTITUTE OF TECHNOLOGY & MANAGEMENT

DEHRADUN

ACKNOWLEDGEMENT

At the very outset, I would like to acknowledge with immense gratitude the

support and guidance of some people without whom the project could not have

been completed. Also thanks to them, I learnt a lot more additional things than that

just restricted to my project.

First of all I would like to thank my project guide Mr. Shankar sharma

(BRANCH MANAGER ) for her support and patience with me despite her being

hard pressed for time.

I am thankful to BSNL for providing me with the wonderful opportunity and

allowing me to take this study.

Also I would like to thank the faculty guide of my college Mr. Jayant

mahajan………..who guided me in my project.

Last but not the least I would like to thank my parents who have always

showed their full faith in me, and are the biggest source of my encouragement and

guidance.

PRAGYA CHAURASIA

2

CANDIDATE DECLARATION

I hereby declare that the work for the project Report

entitled “BUDGET ANALYSIS AT BSNL ” is completely done by

me based on my own work conducted at BSNL Dehradun for

the Partial Fulfillment of my bachelors of business

administration.

Admittedly I have receive suggestion and guidance from

my guides.

Date ……..

PRAGYA CHAURASIA

BBA – V TH SEM.

(2013-16)

3

CONTENTS

Title i Training certificate iiAcknowledgement iiiPreface ivCandidate’s declaration v

CHAPTER No. DESCRIPTION

Chapter-1 Introduction to the industry1.1 An Introduction to telecom industry

Chapter-2 introduction to organization 2.1 An introduction

2.2 vision 2.3 mission

Chapter-3 Topic undertaken 3.1 budget analysis

Chapter-4 part-1 Research Methodology

3.1 Research Problem3.2 Research Objective3.3 sources of data collection

Part-2Data Analysis & Findings

Chapter-5 Conclusions & suggestions

4

PREFACE

The project report on BHARAT SANCHAR NIGAM LIMITED (DEHRADUN) has been

prepared as per the syllabus prescribed by the INSTITUE OT TECHNOLOGY AND

MANAGEMENT DEHRADUN for BBA students.

Understanding of both practical and theoretical knowledge is essential in this competitive

world. Training is an important aspect of study. The basic aim of training in management

field is to know how to apply management theory in practice. Practice makes man perfect,

therefore practical studies is very important for management students.

Practical training helps in comprehending theory of subjects taught in class room. This is

more applicable case of management education. My training at BHARAT SANCHAR NIGAM

LIMITED (DEHRADUN) has such effect to complete the knowledge acquiring the subject of

financial Strength analysis. Thus, it is our moral and obligated duty to take this part of our

studies with great enthusiasm and seriousness and gives them due important.

Last but not least, I received all required information and co-operation from the

organizational various departments. I hope that this report will meet the education

department.

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TABLE OF CONTENTS

Chapter No. Content Page No.

Chapter – 01 Introduction to the industry 08

Chapter – 02 Introduction to the organization 12

Chapter -03 Topic budget analysis 21

Chapter – 04

Part-1

Research methodology

:- research design & methodology

:-Sources of data collection

:- objective of study

:- limitation of study

36

37

38

38

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Chapter – 04

Part-2

Data analysis and findings

:- budget statement of BSNL

:- expenses incurred by BSNL

:- data analysis & interpretation

:- findings

40

41

45

49

62

6

Chapter – 5 Conclusion & suggestion

:- bibliography

63

66

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Chapter 1

Introduction to the Industry

(telecommunication industry)

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Indian Telecommunication Industry

The Indian telecommunications has been zooming up the growth curve at a

feverish pace, emerging as one of the key sectors responsible for India's resurgent

economic growth. India has surpassed US to become the second largest wireless

network in the world with a subscriber base of over 300 million in April, according

to the Telecom Regulatory Authority of India (Trai).

The telecom industry is one of the fastest growing industries in India. India

has nearly 200 million telephone lines making it the third largest network in

the world .With a growth rate of 45%, Indian telecom industry has the highest

growth rate in the world.

History of Indian Telecommunications started in 1851 when the first operational

land lines were laid by the government near Calcutta (seat of British power).

Telephone services were introduced in India in 1881. In 1883 telephone services

were merged with the postal system. Indian Radio Telegraph Company (IRT) was

formed in 1923. After independence in 1947, all the foreign telecommunication

companies were nationalized to form the Posts, Telephone and Telegraph (PTT),

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a monopoly run by the government's Ministry of Communications.

In 1986, two wholly government-owned companies were created:

The Videsh Sanchar Nigam Limited (VSNL) for international telecommunications and Mahanagar Telephone Nigam Limited (MTNL) for service in metropolitan areas.

In 1990s, telecommunications sector benefited from the general opening up of the

economy. Also, examples of telecom revolution in many other countries, which

resulted in better quality of service and lower tariffs, led Indian policy makers to

initiate a change process finally resulting in opening up of telecom services sector

for the private sector. National Telecom Policy (NTP) 1994 was the first attempt

to give a comprehensive roadmap for the Indian telecommunications sector. In

1997, Telecom Regulatory Authority of India (TRAI) was created. TRAI was

formed to act as a regulator to facilitate the growth of the telecom sector.

Telecommunication sector in India can be divided into two

segments:-1. Fixed Service Provider (FSPs),

2. Cellular Services.

Fixed line services consist of basic services, national or domestic long

distance and international long distance services. The state operators (BSNL and

MTNL), account for almost 90 per cent of revenues from basic services. Private

sector services are presently available in selective urban areas, and collectively

account for less than 5 per cent of subscriptions. However, private services focus

on the business/corporate sector, and offer reliable high- end services, such as

leased lines, ISDN, closed user group and videoconferencing.

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Cellular services can be further divided into two categories: Global System for

Mobile Communications (GSM) and Code Division Multiple Access (CDMA).

The GSM sector is dominated by Airtel, Vodafone-Hutch, and Idea Cellular, while

the CDMA sector is dominated by Reliance and Tata Indicom. Opening up of

international and domestic long distance telephony services are the major growth

drivers for cellular industry. Cellular operators get substantial revenue from these

services, and compensate them for reduction in tariffs on airtime, which along with

rental was the main source of revenue. The reduction in tariffs for airtime, national

long distance, international long distance, and handset prices has driven demand.

SERVICE PROVIDERS IN TELECOMMUNICATION

Some of the service providers in telecommunication in India are:-

1. Airtel

2. Vodafone

3. Reliance

4. Bsnl

5. Idea

6. Tata Indicom

7. Aircel

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Chapter 2

Introduction to the Organization

BSNL (BHARAT SANCHAR NIGAM LIMITED)

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Bharat Sanchar Nigam Limi t ed (known as BSNL, Ind i a

Communicat ions Corporation Limited) is a public sector communications

company in India. It is the India’s largest telecommunication company with

65% market share as on March 31, 2014. Its headquarters are at Bharat

Sanchar Bhawan, H a r i s h Chandra Mathur Lane, Janpath, New Delhi. It has

the status of Mini-ratna - a s t a t u s a s s i g n e d t o r e p u t e d P u b l i c Sector

companies in India. BSNL is India’s oldest and largest Communication

S e r v i c e Provider ( CSP). Currently BSNL has a customer base of 72.34

million (Basic& Mobile telephony). It has footprints throughout India

except for the metropolitan cities of Mumbai and New Delhi which are

managed by MT NL.

The company offers vide ranging & most transparent tariff schemes designed to

suite every customer. BSNL cellular service, Cell One, has more than 17.8 million

cellular customers, garnering 24 percent of all mobile users as its subscribers. That

5means that almost every fourth mobile user in the country has a BSNL

connection. In basic services, BSNL is miles ahead of its rivals, with 35.1 million

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Basic Phone subscribers i.e. 85 per cent share of the subscriber base and 92

percent share in revenue terms.

BSNL has more than 2.5 million WLL subscribers and 2.5 million Internet

Customers who access Internet through various modes viz. Dial-up, Leased Line,

DIAS, and Account Less Internet (CLI). BSNL has been adjudged as the

NUMBER ONE ISP in the country.

BSNL has set up a world class multi-gigabit, multi-protocol convergent IP

infrastructure that provides convergent services like voice, data and video through

the same Backbone and Broadband Access Network. At present there are 0.6

million Data One broadband customers.

The company has vast experience in Planning, Installation, network integration and

Maintenance of Switching & Transmission Networks and also has a world class

9000 Telecom Training Institute.

Scaling new heights of success, the present turnover of BSNL is more than

Rs.351,820 million (US $ 8 billion) with net profit to the tune of Rs.99,390 million

(US $ 2.26 billion) for last financial year. The infrastructure asset on telephone

alone is worth about Rs.630, 000 million (US $ 14.37 billion).

The turnover, nationwide coverage, reach, comprehensive range of telecom

services and the desire to excel has made BSNL the No. 1 Telecom Company of

India.

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15

BSNL

Type State-owned

Industry Telecommunications

Founded 19th century, incorporated 2000

Headquarters New Delhi, India

Key people ANUPAM SHRIVASTAVA(Chairman) & (MD)

Products & services Wireless

Telephone

Internet

Television

Revenue ▼ ₹271.29 billion(2013)

Owner(s) Government of India

Employees 216925 as on 30.9.2015

Website www.bsnl.in

http://en.wikipedia.org/wiki/Types_of_business_entity

http://en.wikipedia.org/wiki/Website

http://en.wikipedia.org/wiki/Employment

http://en.wikipedia.org/wiki/Government_of_India

http://en.wikipedia.org/wiki/Ownership

http://en.wikipedia.org/wiki/Revenue

http://en.wikipedia.org/wiki/Television

http://en.wikipedia.org/wiki/Internet

http://en.wikipedia.org/wiki/Telephone

http://en.wikipedia.org/wiki/Wireless

http://en.wikipedia.org/wiki/Product_(business)

http://en.wikipedia.org/wiki/Managing_Director

http://en.wikipedia.org/wiki/Chairman

http://en.wikipedia.org/wiki/New_Delhi

http://en.wikipedia.org/wiki/Telecommunication

http://en.wikipedia.org/wiki/Industry

http://en.wikipedia.org/wiki/State-owned

http://en.wikipedia.org/wiki/File:BSNL_Logo.svg

VISION

BSNL's Vision is to become the largest Telecom Service Provider in Asia. Its

Mission is to provide world class, state-of-art technology telecom services to its

customers on demand at competitive prices and world class telecom infrastructure

in its area of operation and contribute to the growth of India's economy.

Become a total solution provider company and to provide world class

telecom services at affordable prices.

Become a global telecom company and to find a place in the ‘Fortune 500’

companies.

To become the largest telecom Service Provider in Asia

To remain market leader in providing world class Telecom and IT related

services at affordable prices and to become a global player.

MISSION

To provide world class State-of-art technology telecom services to its

customers on demand at competitive prices.

To provide world class telecom infrastructure in its area of operation and to

contribute to the growth of the country's economy.

Enter into and expand new services viz. Long distance, Cellular mobile, W-

CDMA, Internet / Broadband and ‘IN’ – services and development of

telecom software. Become the largest provider of private networks and

leased lines.

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Venture into other areas in India and abroad on the strength of our core

competency.

OBJECTIVES

BSNL's Objectives are to be Lead Telecom Services Provider, provide quality

and reliable fixed telecom service to our customer and increase customer's

confidence, provide mobile telephone service of high quality and become the No. 1

GSM operator in its area of operation, provide point of interconnection to other

service provider as per their requirement promptly and facilitate Research &

Development activity in the country. BSNL also has the objective to contribute

towards National Plan Target of 500 million subscriber base for India.

To be the Lead Telecom Services Provider.

To provide quality and reliable fixed telecom service to our customer and

thereby increase customer's confidence.

To provide mobile telephone service of high quality and become no. 1

GSM operator in its area of operation.

To provide point of interconnection to other service provider as per their

requirement promptly.

To facilitate R & D activity in the country.

MAIN SERVICES PROVIDED BY BSNL

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BSNL Provides almost every telecome service, however following are the main telecome services being provided by BSNL in India.

Universal Telecome Services: - Fixed wire line services and wireless in local loop (WLL) using CDMA Technology called B-fone and Tarang respectively. BSNL is a domical operator in fixed line.

Cell One

BSNL Mobile

Ex-cel

Pre-Paid Mobile

Cellular Mobile Telephone Services: - Bsnl is a major provider of cellular mobile telephone services using GSM platform under brand name Cellone. Prepaid cellular services of Bsnl are known as Excel. Bsnl had 17% share of mobile telephony in the country.

BSNL Broadband

BSNL has launched its broadband services under brand name “BSNL BROADBAND “on 14-01-05. This offers High Speed Internet Access with speed ranging from 256 Kbps to 8 Mbps. Ever since its inception BSNL is continuously expanding its broadband network in response to ever growing demand of broadband service throughout India. Present customer base is 3.56 million, with equipped capacity of 6.1 million. BSNL Broadband service is available in more than 3800 cities & 83000 villages.

The services provided are:-High Speed Internet Connectivity (up to 8

Mbps)

Band width on Demand (planned)

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Virtual Private Network (VPN) service over broadband

Dial VPN services to MPLS VPN customers)

Games on Demand Service

Video tutorial service

Video Surveillance service

Entertainment portal.

Internet: - BSNL is providing internet as dialup connection (sancharnet) as prepaid,(Netone) as postpaid and ADSL-Broadband. Bsnl has around 50% market share broadband in india.bsnl has planned aggressive role out in broadband for current financial year.

Intelligent Network (IN):- BSNL is providing IN services like Tele-voting, Toll- free calling, Premium calling etc..

BSNL Land line: - BSNL is the largest telecom operator in India and is known to everybody for basic Telephony Services for over 100 years. Presently the plain old, Countryside telephone service is being provided through 32,00 electronic exchanges, 326 Digital Trunk Automatic Exchange(TAE), Digitalized public switched telephone Network(PSTN) all interlinked by over 2.4 lakh km of optical fibre cable.

BSNL’s Latest Plans – 3G services & More

BSNL has awarded the contract to leading telecom equipment maker Ericsson &

Nokia Siemens network for upgrading its technical services.

The high bandwidth of Nokia Siemens Networks' will allow BSNL to deliver high

data and triple-play intensive services such as Video on Demand, Video Multicast,

IPTV, Video Conferencing, and VPN to its many customers.

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As part of the contract, Nokia Siemens Networks will deploy its Gigabit Ethernet-

capable IP DSLAMs Surpass hiX5625 (Digital Subscriber Line Access

Multiplexers) and chassis-based access switch (Surpass hiD6615). The company

will also supply end-user devices to enable BSNL provide speeds of up to 24Mbps

for ADSL2+ subscribers over its existing Copper infrastructure. Nokia Siemens

Networks provides a comprehensive portfolio of wireline

and wireless Broadband solutions including xDSL, GE, and GPON (Passive

Optical Networks), Carrier Ethernet, HSDPA, and WiMax.

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Chapter 3

Topic – BUDGET ANALYSIS

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3.1 INTRODUCTION

Financial Management is that managerial activity which is concerned with the

planning and controlling of the firm’s financial resources.

Financial management focuses on finance manager performing various

tasks as Budgeting, Financial Forecasting, Cash Management, Credit

Administration, Investment Analysis, Funds Management, etc. Which

help in the process of decision making.

Financial management includes management of assets and liabilities in the

long run and the short run. Concept of Budgeting

Overview

Brief description It is a whole process of designing, implementing and operating budget. It Will help

us with an overall organizational budget as well as with a budget for a specific

Project. It includes tools for estimating costs as well as tips for ensuring that our

budgets meet the needs of our project or organization.

Advantages of Budgeting:-

1. A basis for internal audit for regularly evaluating departmental result

2. Scarce resources can be allocated in an optimal way

3. It forces management to plan ahead so that long term goals are achieved

4. Communication and coordination throughout the firm improves

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5. Participation in budget has a motivational impact on the work force

6. Areas of efficiency and inefficiency are identified

7. People are made responsible for items of cost and revenue

Problem in Budgeting:-

1. They are perceived by work force as pressure device imposed by

top management

2. Departmental conflict arises because of competition for resources allocation.

3. It is very time consuming and expensive process.

Who should be involved in budgeting?

Budgeting is a difficult and responsible job. An organization’s ability to do what it has planned to do and to survive financially depends on the budgeting process. Whoever does the budgeting must:-

Understand the values, strategy and plans of the organization or project;

Understand what it means to be cost effective and cost efficient (see Glossary of Terms.

Understand what is involved in generating and raising funds.

Where staff is competent to take full responsibility for the financial side of the

organization or project, the following would normally be involved in the budgeting

process:

o The Finance Manager and/or Bookkeeper;

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o The Project Manager and/or Director of the organization or

department.

Where staff lacks confidence to do the budgeting, then Board members can be

brought in. Some Boards have a Finance Committee or a Budget Sub Committee.

It is a good idea to have someone on Board with financial skills. She/he can then

help the staff with budgeting.

The budget is the business of everyone in the organization. At the very least, senior

staff should understand the budget, how it has been drawn up, why it is important,

and how to monitor it.

Meaning of Budget : - Budget (from old French baguette, purse) is generally a list of all planned

expenses and revenues. It is a plan for saving and spending.

Budget is an integral part of running any business efficiently and effectively. It serves as

a plan of action for managers as well as a point of comparison at the period's end.

A budget is a document that translates plans into money - money that will need

to be spent to get your planned activities done (expenditure) and money that will

need to be generated to cover the costs of getting the work done (income).

It is an estimate, or informed guess, about, what you will need in monetary terms to

do your work.

DEFINITION OF BUDGET

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The institute of cost and management accounting, London, gives the

following definition :

A BUDGET is, “financial and quantitative statement, prepared and

approved prior to a defined period of time of the policy to be

pursued during the period of purpose of attaining a given objective.

It may include income, expenditure and the employee of capital.”

Why budget? Why is it important for an organization, project or department to have a budget?

The budget is an essential management tool. Without a budget, we are like a pilot navigating in the dark without instruments..

The budget forces us to be rigorous in thinking through the implications of our activity planning. There are times when the realities of the budgeting process force us to rethink our action plans.

Used properly, the budget tells us when we will need certain amounts of money to carry out our activities.

The budget enables us to monitor our income and expenditure and identify any problems.

The budget is a basis for financial accountability and transparency. When everyone can see how much should have been spent and received, they can ask informed questions about discrepancies.

We cannot raise money from donors unless we have a budget. Donors use the budget as a basis for deciding whether what we are asking for is reasonable and well-planned.

Enable the actual financial operation of the business to be measured against the forecast.

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Who Uses Budgets?

Nearly everyone uses budgets in some form. From the household budget to

the multi-billion dollar budgets used in some corporations, budgets are a pretty

universal

However; a company's budget is a bit more involved. Most companies will

start with a master, or static, budget. A static budget is a budget with numbers

based on planned outputs and inputs for each of the firm's divisions. It's the first

part of budgeting, which determines how much a company has and how much it

will spend.

Types of Budget:-

Budgets can be classified according to Time, Function, and Flexibility.

ACCORDING TO TIME:1. Long Term Budget2. Short Term Budget3. Current Budget4. Rolling budget

ACCORDING TO FUNCTION:1. Sales Budget2. Production Budget3. Cost of Production Budget4. Purchase Budget5. Personnel budget6. R & D Budget

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7. Capital Expenditure Budget8. Cash Budget9. Master Budget

ACCORDING TO EFFICIENCY:1. Fixed Budget2. Flexible Budget

Some of these are described below:

Sales budget: The sales budget is an estimate of future sales, often broken down into both units and dollars. It is used to create company sales goals.

Production budget: Product oriented companies create a production budget which estimates the number of units that must be manufactured to meet the sales goals. The production budget also estimates the various costs involved with manufacturing those units, including labor and material.

Cash Flow/Cash budget: The cash flow budget is a prediction of future cash receipts and expenditures for a particular time period. It usually covers a period in the short term future. The cash flow budget helps the business determine when income will be sufficient to cover expenses and when the company will need to seek outside financing.

Marketing budget: The marketing budget is an estimate of the funds needed for promotion, advertising, and public relations in order to market the product or service.

Project budget: The project budget is a prediction of the costs associated with a particular company project. These costs include labor, materials, and other related expenses. The project budget is often broken down into specific tasks, with task budgets assigned to each.

Revenue budget: The Revenue Budget consists of revenue receipts of government and the expenditure met from these revenues. Tax revenues are made up of taxes and other duties that the government levies.

Expenditure budget: A budget type which include of spending data items.

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Budgeting Process:-

Budgeting is the formal procedure of preparing budgets. It involves the following basic steps:

a. objective determination stage

b. goal determination stages

c. strategy formulation stage

d. budget preparation stage

Objective Determination Stage:-The first stage is setting the ‘Objectives’ which are defined as the ‘broad and long- range desired state or position in the future’. They are motivational or directional in nature and are expressed in Qualitative terms.

Goal Determination Stage:-The second stage is specifying the goals.The term goal represents targets, specific in quantitative terms to be achieved in a specific period of time. The timing of introducing new Products, purchase of new plant and machinery and expected rate of return are examples of time and quantity oriented goals.

Strategy Formulation Stage:-The next step involves laying down the strategies. Strategies denote specific methods or courses of action to achieve the goals, for instance, promotion of sales through price reduction or aggressive advertisement and so on.

Budget preparation stage:-The last stage in which Budgets are actually prepared.

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Budgeting Techniques:-

A large part of budgeting involves personal finance planning. All three of the following activities are important when creating a budget that you can live comfortably with, as well as one that helps you prepare for the long term.

1. Zero based budgeting2. Incremental budgeting3. Zero sum budgeting

Zero based budgeting - By contrast, in zero-based budgeting, each item in the budget must be justified starting from the zero-base. The zero based approach is indifferent to whether the total budget is increasing or decreasing. The advantage of this approach is that it promotes a more efficient allocation of resources, requires manager to find more cost effective ways to improve operations and helps detect inflated budgets. Since everything has to be justified this approach will obviously be more time consuming.

Incremental Budgeting -This approach uses a budget prepared using a previous period’s budget or actual performance as a base, with incremental amounts added for the new budget period. The advantage of this approach is that it is simple and creates a more stable and consistent environment for managers. However, this approach encourages spending up to the budget so that the budget is maintained for the subsequent year, doesn’t respond to changing circumstances and perpetuates misallocations of resources.

Zero sum budgeting – This approach is used in personal finance to describe the practice of allocating or budgeting every dollar of income received. With this approach, if the budget for one item is increased then some other part of the budget must be adjusted downward so that the total budget remains unchanged.

Monitoring the Budget:-

A flexible budget modifies the budget to the actual level of performance. Obviously, if the original budget is prepared for say, one thousand units of a product, but two thousand units are produced, comparing the original budget to the

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actual volume of output does not provide meaningful information. Accordingly, the budgeted costs per unit for all variable costs can be used and multiplied by the actual volume of output to arrive at the flexible change proportionately to the level of output for the former and to the level of sales for the latter cost. Fixed costs, such as rent, however, do not normally change with the level of production or sales. These budgeted costs, therefore, are not adjusted and left intact even though the volume of sales and output may be different from the originally budgeted levels.

Ultimately, a good budget is one which not only uses good budgeting techniques but is also based on a sound knowledge of the business as well as the external factors that affect it. The budget serves as a planning tool for the organization as a whole as well as its subunits. It provides a frame of reference against which actual performance can be compared. It provides a means to determine and investigate variances. It also assists the company in planning again based on the feedback received considering the changing conditions. An attainable, fair, and participatory budget is also a good tool for communication, employee involvement, and motivation.

Definition of expenses:-

In common usage an expense or expenditure is an outflow of money to another person or group to pay for an item or service, or for a category of costs.

In accounting, expense has a very specific meaning. It is an outflow of cash or other valuable assets from a person or company to another person or company. This outflow of cash is generally one side of a trade for products or services that have equal or better current or future value to the buyer than to the seller. Technically, an expense is an event in which an asset is used up or a liability is incurred. In terms of the accounting equation, expenses reduce owners ‘equity.

The International Accounting Standards Board defines expenses as:-

Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrence’s of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.

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EXPENCES INCURRED BY BSNL:_

BSNL categorized the budget statement in two category. According to these two category the provision of fund is made in the budget.

In BSNL there are two types of expenditures Expenditure on employee remuneration Office or Administrative expenses

EXPENDITURE ON EMPLOYEE REMUNERATION:-Employee Remuneration refers to the reward or compensation given to the employees for their work performances. Remuneration provides basic attraction to a employee to perform job efficiently and effectively. Remuneration leads to employee motivation. Salary constitutes an important source of income for employees and determine their standard of living. Salaries affect the employees productivity and work performance. Thus the amount and method of remuneration are very important for both management and employees.

BSNL incurred the huge amount of money in employee remuneration. For example:

Salary of employee

Medical allowances

Wages

Food allowances

Leave travel concession

Incentives etc

OFFICE AND ADMINISTRATIVE EXPENSES:-Administrative expenses related to the day-to-day operations of a business. These expenses pertain to operating expenses rather than to expenses that can be directly related to the production of any goods or services. “The expenses that an organization incurs not directly tied to a specific function such as manufacturing/production or sales. These expenses are related to

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the organization as a whole as opposed to an individual department; also referred to as "administrative cost."

Following are its main example:-

Rates & taxes

Insurance

Bank charges

General expenses

Membership fee

Advertisement expenses

Commission

Expenditure management: - Economy Measures planned by BSNL for FY 2013-14:-

With keeping in mind a view of current fiscal situation and then arising out of insufficient rain in large part of country, and consequent pressure on government’s resources, bsnl issued further guidelines :-)

1. CUT IN NON PLAN EXPENDITURE:-

For the year end 2013-14 every department shall affect a mandatory cutoff of 10 %in non plan expenditure under the following head.

a. Domestic and foreign travel expensesb. Publicationsc. Professional servicesd. Advertising and publicitye. Office expensesf. Pol

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g. Other administrative expenses

No increase in budgetary allocations under the heads of non plan expenditure, particularly where cuts are now being imposed, will be allowed at re stage, except under very extraordinary and compelling circumstances.

2. Economy measures:-The following measures for fiscal prudence and economy will also come in force with immediate effect:-

1. Seminar and Conference:-The prescribed expenditure ceilings for holding seminars, conference, workshops etc should be enforced and a 10% cut on the budgetary allocation for seminar and conferences shall be effected. There will be a complete ban on holding of meetings and conference at five star hotels.

2. Domestic and foreign travelNo travel on government account by air will take place by first class.All domestic travel on government account by air will take place only by economy class, irrespective of entitlement.. Where travel is unavoidable, it will be ensured that officers of the appropriate level dealing with the subject are sponsored instead of those at higher levels. The size of delegation and the duration of visit will be kept to the absolute minimum.

3. Purchase of vehicles.Purchase of vehicles, except for operational requirements of the defense forces, central Para military forces and security related organizations will not be permitted.

Finance Policy of BSNLStandards of Financial Proprieties

Ever officer incurring or authorizing expenditure from public funds should be guided by high standards of financial propriety. Every officer should force financial order and strict economy at every step and see that all relevant financial rules and regulations are observed, by his own officer and by subordinates

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disbursing officers. Among the principles on which emphasis is generally laid are the following:

1. Every officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money.

2. The expenditure should be prima-facie more that the occasion demands.3. No authority should exercise its powers of sanctioning expenditure to pass

an order which be directly or indirectly to its own advantages.4. Expenditure from public moneys should not be incurred for benefit of a

person or section of the people unless 4.1 A claim for the amounts could be enforce in a court of law, or

4.2 The expenditure is in pursuance of a recognized policy or custom. 5. The amount of allowances granted to meet expenditure of a particular type should be so regulated that the allowances are not on the whole a source of profit to the recipients.6. The responsibility and accountability of every authority delegated with financial powers to procure any item or service on Government account is total and indivisible. Government expects that the authority a concerned will have the public interest uppermost in its mind while making a procurement decision. The responsibility is not discharged merely by the selection of the cheapest offer.

7. Whenever called for, the concerned authority must place on record in precise terms, the considerations which weighed with it while talking the procurement decision.

34

SWOT Analysis :-

STRENGTHS WEAKNESSES

Pan-India reach Experienced telecom service provider Total telecom service provider Huge Resources (financial & technical

pool) Huge customer base Most trusted telecom brand Transparency in billing Easy deployment of new services

Non-optimization of network capabilities

Poor marketing strategy Bureaucratic organizational set up Inflexibility in mindset (DOT period

legacies) Limited number of value added

services Poor franchisee network Legacy of poor service image Huge and aged manpower Procedural delays Lack of strategic alliances

OPPORTUNITIES THREATS

Tremendous market growing at 20 lack customers per month

Untapped broadband services

Untouched international market

Can capitalize on public sector image to grab government’s ICT initiatives

ITEB service markets

Diversification of business to turn-key projects

Competition from private operators

Keeping pace with fast technological changes

Market maturity in basic telephone segment

Manpower churning

Multinational eyeing Indian telecom market

Private operators demand for sharing last mile

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Chapter 4Part-1

Research Methodology

36

RESEARCH MATHODOLOGY

The research is carried in a proper planned and systematic manner,

The research was particularly based departmental research. We have to move to

finance department and meet people which include their names and contact

numbers given by BSNL training and Planning department. During the

department we have to know about to departmental works by explaining the

working process..

Research Design & Methodology:

Research

The research design of this project is exploratory. Though each research study

has its own specific purpose but the research design of this project on BSNL is

exploratory in nature as the objective is the development of the hypothesis

rather than their testing.

The research designs methods of financial analysis. Through of comparative

budgets in comparative statement, I am studying on budgets of BSNL of

fy.2013-14.

Methodology

Every project work is based on certain methodology, which is a way to systematically solve the problem or attain its objectives. It is a very important guideline and lead to completion of any project work through observation, data collection and data analysis.“Research Methodology comprises of defining & redefining problems, collecting, organizing & evaluating data, making deductions & researching to conclusions,

37

Sources of Data Collection:Research will be based on two sources:

1. Primary data

2. Secondary data

1) Primary Data:

Survey: Primary data was collected by departmental survey for BSNL

. 2) Secondary Data:

Secondary data will consist of different literatures like books which are

published, articles, internet, the company manuals and websites of company-

w w w . bsn l . c o m .In order to reach relevant conclusion, research work needed

to be designed in a proper way.

This research methodology also includes:-

Familiarization with the concept of finance and its various merits, demerits.

Thorough study of the information collected.

Conclusions based on findings.

Objective of Study:

The main objective of this study is to carry on brief study on “Analysis of

Budget of financial year 2013-14 of BSNL through this I am able to get

the difference of actual and expected expenses of Bsnl.

Other objectives of this project are as follows:

• To identify the various direct and indirect expenditures of the BSNL with respect to Annual budget Reports of the BSNL.

• To study the various departments for come to know all condition of BSNL

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http://www.bsnl.com/

DEHRADUN.

Limitations of StudyFinancial analysis is a powerful mechanism of determining financial strengths

and weaknesses of a firm but, the analysis is based on the information

available in the financial statements. We have also careful about the impact

of price level chances, windows-dressing of financial statements, changes

in accounting policies of BSNL, accounting concepts and conventions, and

personal judgments etc. Due to the following unavoidable and uncontrollable

factor the result might not be accurate. Some of the problems faced while

conducting the survey are as follows:-

Chances of some biasness could not be eliminated.

A majority of respondents show lack of cooperation and are biased

towards their own opinions.

Some of the important Limitations of financial analysis are however,

summed up as below:

It is only a study of interim reports.

Budget analysis is based upon only monetary information

and non-monetary factors are ignored.

Changes in accounting procedure by a firm may often

make budget analysis misleading.

Analysis is only a means and not an end in itself. We has to make

interpretation and draw own conclusion

Different people may interpret the same analysis in different ways.

39

Chapter 4Part-2

Data Analysis and Findings

40

41

BUDGET STATEMENT OF BSNL 2012-13

INTERPRETATION OF BUDGET STATEMENT

It is a budget statement which they prepare every year in September. First the employee of the circle estimate funds which are required for different - different categories for next coming year. It is called budget estimate. Then this budget estimate sends to the headquarter in Delhi, through the circle. Then they ensure that the use of funds are profitable or not.

This statement should be signed by IFA (Internal finance account).

The headquarter sends the budget demand letter to the circle in September. Then the circle sends budget statement in described manner. so that the headquarter fulfill their requirement of funds.

Following are some points which

The figure should be shown in the statement in thousands of rupees for working expenses.

Statement should be prepare on good paper of convenient size not exceeding 15”×20”.

Column heads should be entered fully and clearly in all the pages. Care should be taken to see that no column in the statement should be ignored.

It is generally seen that estimates are over projected and finally savings are shown at the end of the year. hence, the estimates should be projected on realistic basis.

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There are 14 columns in budget statement of BSNL.

1- Serial number

2- Particulars or names or details of expenditure

3- Actual amount of 3 years earlier

4- Actual amount of 2 year earlier

5- Actual amount of 1 year earlier

6- Budget allotted by the head quarter for current year

7- If any additional allotment authorized

8- Total budgeted amount of current year. This column consist of addition of column 6 and 7.

9- It consist of the actual amount first five months. For example- If we prepare budget for financial year 2014-15 the first 5 month will be April 2014 to august 2014.

10- The circle sends the budget statement in the month of September to the headquarter. So that the amount of next remaining 7 month is estimated. For example- If we prepare budget for the financial year 2014-15, the remaining 7 month will be September 2014 to march 2015.

11- This column consist of the addition of column 9 & 10. It includes total amount of first five month & remaining 7 month. It is called revised estimate.

12- It consist of budget estimate of next year.

13- This column shows the variation in budget estimate.

14- It includes the reasons for variation. The reasons can be the increment in dearness allowance, increment in travel allowance etc.

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Expenses incurred by BSNL:- Budgeted and actual working expenditure for FY 2012-13.

A. expenditure on payment & (amount in thousands)Provision for employee remuneration budgeted amt actual amt

1. Salary 226452 226452

2. Medical allowances for Employee 14352 14352

3. Wages - 0

4. Overtime allowance - 0

5. Leave travel concession 385 385

6. Leave salary encashment 18020 18020

7. Uniform 1200 1200

8. Staff welfare and amenities 118 118

9. Food allowance - 0

10. Pension contribution 29000 29000

11. Leave salary contribution 211 211

12. Employer’s contribution towards EPF

2163 2163

13 Payment under workmen compensation. Act

185 185

14. Administrative charges on EPF a/c 373 373

15 Gratuity - 0

16 Honorarium - 0

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Total (a) 292459 292459

PART B ADMINISTRATION EXP.

14. Rent of building 2500 2500

15. Rates & Taxes 10 10

16. Water charges 537 537

17 Electricity charges 33458 33458

18 Fuel charges 6624 6624

19 Computer stationary 834 834

20. Insurance 126 126

21. Vehicle running expenses 6033 6033

22. Repair & maintenance 49007 49007

23. Travel expenses 1171 1171

24. Conveyance charges 250 250

25. Printing 529 529

26. Stationary 750 750

27. Postal expenses 1721 1721

28. Bank charges 95 95

29. Book & periodicals 18 18

30. Horticulture expenses 1064 1064

31. Police escort charges/ security guards

3500 3500

32. General expenses 5309 5309

33. Professional charges 188 188

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34. Meetings 95 95

35. Lease charges - 0

36. Business promotion& marketing expenses

500 500

37. Advertisement 417 417

38. Waiting charges - 0

39. Commission 581 518

40 Membership fee -

41 Expenditure on services 378 378

Total 115695 115695

Grand Total 408154 408154

Budgeted and Actual Working expenditure for the FY and 2013-14:- A. expenditure on payment & amount in thousand

Provision for employee remuneration budgeted amt actual amt

1. Salary 277711 268482

2. Medical allowances 7100 11973

3. Wages 0 0

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4. Overtime allowance 0 0

5. Leave travel concession 59 127

6. Leave salary encashment 14074 11683

7. Uniform 198 0

8. Staff welfare and amenities 32 0

9. Food allowance 0 0

10. Pension contribution 22087 19329

11. Leave salary contribution 181 130

12. Employer’s contribution towards EPF

1666 2554

13 Administrative charges on EPF 419 263

14. Honorarium 0 3

15. Incentive/bonus 0 177

Total (a) 323537 314721

PART B

ADMINISTRATION EXP.

16. Rent of building 3900 4294

17. Rates & Taxes 341 689

18. Water charges 548 1306

19 Electricity charges 60820 27050

20 Fuel charges 11137 4716

21 Computer stationary 851 1267

22. Insurance 59 69

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23. Vehicle running expenses 6904 6747

24. Repair & maintenance 52454 37504

25. Travel expenses 528 1235

26. Conveyance charges 34 28

27. Printing 383 676

28. Stationary 704 414

29. Postal expenses 1646 2066

30. Bank charges 87 105

31. Book & periodicals 29 29

32. Horticulture expenses 0 0

33. Police escort charges/ security guards

5124 6048

34. General expenses 9227 14393

35. Professional charges 169 281

36. Meetings 220 133

37. Lease charges 0 0

38. Business promotion& marketing expenses

500 434

39. Advertisement 784 414

40. Waiting charges 0 3

41 Expenditure on services 702 0

42. Commission 46 1604

Total(b) 157197 111505

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Grand Total 480730 426226

DATA ANALYSIS AND INTERPRETATION

We will take few examples from both the categories and compare it.

1-Expenditure on employee remuneration

2- Administrative expenses

Comparative analysis of employee remuneration of 2 financial years 2012-13 and 2013-14

SALARY

Year Budgeted Actual Differences2012-13 226452 226452 02013-14 277711 268482 9229

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INTERPRATATION

In the financial year 2012-13,the budgeted amount is equal to the actual amount. So there is no profit & no loss. In the case of 2013-14 the budgeted amount is more than actual amount. So the amount of profit is 9229. Budgeted amount is excess over actual.

Here we can see that the company is gaining profit in 2013-14 as compare to last year where the company could not gain any profit.

STAFF WELFARE & AMENITIES


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INTERPRETATION

In the financial year 2012-13 the budgeted amount is equal to actual. So there is no profit and no loss. In the case of 2013-14 the budgeted amount is more than actual amount. So that the profit amount is 32. Here also company is gaining profit in 2013-14 as compare to the year 2012-13.

PENTION

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INTERPRETATION

In the financial year 2012-13 the budgeted amount is equal to the actual amount. So there is no profit & no loss. In the case of 2013-14 the budgeted amount is more than actual amount. So that the profit amount is 2758.

Here also company is gaining profit in 2013-14 as compare to the year 2012-13.

LEAVE TRAVEL CONCESSION


53

INTERPRETATION



MEDICAL ALLOWANCES


54

INTERPRETATION



Comparative analysis of Administrative expenses of 2 years

2012 -2013, and 2013-2014

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RATES & TAXES

YEAR BUDGET ACTUAL DIFFERENCE2012-13 10 10 02013-14 314 689 (375)

INTERPRETATION

In the financial year 2012-13 the budgeted amount is equal to the actual amount. So there is no profit & no loss. In the case of 2013-14 the budgeted amount is less than the actual amount. So the loss amount is (375).

Here we can see that company is suffering from loss in 2013-14 as compare to previous year.

REPAIR AND MAINTENANCE

YEAR BUDGET ACTUAL DIFFERENCE2012-13 49007 49007 02013-14 52454 37504 14950

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INTERPRETATION



GENERAL EXPENSES


57

INTERPRETATION



ADVERTISEMENT

YEAR BUDGET ACTUAL DIFFERENCE2012-13 417 417 02013-14 784 417 370

58

INTERPRETATION



COMMISION


59

INTERPREATATION



60

We have studied above the comparative analysis of budget of 2 financial year i.e 2012-13 & 2013-14. We can categorized these expenses into three category.

Budgeted amount is more than actual amountBudgeted amount is less than actual amount

Budgeted amount is equal to actual amount

Year 2012-13

In the year 2012-13 we can see in the above chart that budgeted amount of all the expenses are equal to the actual amount. It means that the company spent only that amount which was allotted for this year. so that this situation shows no profit and no loss.

Year 2013-14

In this year we can divide the expenses into above three categories-

Budgeted amount is more than actual amount

Following are the expenses which comes under this category-

1. Salary2. Leave salary encashment

3. Uniform

4. Staff welfare and amenities

5. Pension contribution

6. Leave salary contribution

7. Administrative charges on EPF

8. Electricity charges

9. Fuel charges

10.Vehicle running expenses

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11.Repair & maintenance

12.Conveyance charges

13.Stationary

14.Meetings

15.Business promotion & marketing expenses

16.Advertisement

17.Expenditure on services

Budgeted amount is less than actual amount

Following are the expenses which comes under this category-

1. Medical allowance2. Leave travel concession

3. Employee contribution toward EPF

4. Incentive/bonus

5. Honorarium

6. Rent of building

7. Rates & taxes

8. Water charges

9. Computer stationary

10.Insurance

11.Travel expenses

12.Printing

13.Postal expenses

14.Bank charges

15.Police escort charges/security guard

16.General expenses

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17.Professional charges

18.Waiting charges

19.Commission

Budgeted amount is equal to actual amount

1. Books & periodicals

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This chart shows the 3 categories. It shows that the category of budgeted amount is less than actual amount has 19 items.. which is higher than the category of budgeted amount is more than actual amount which is not profitable for the company.

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FindingsIn BSNL they prepare only cash budget not any other type of budget.In the month of september the headquater sends the budget demand letter to the circles.

In september the circle sends their budget estimation statement to the headquater which include estimation of funds of various catagories which will be required for next upcoming year.

BSNL incurred money in 2 types of expenses

1-Expenditure on employee remuneration

2-Office or Administrative expenses

Through comparitive analysis of two years we find that in the year of 2012-13 the budget estimations is correct but in the year of 2013-14 various wrong estimation is done by the employees of the BSNL.At last we find that in the year of 2012-13 there are no profit and no loss for the compny but in the year 2013-14 the company is not in the profitable condition.

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Chapter 5

Conclusion and Suggestions

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According to my survey and calculating the important points are:

• Budgeting system of BSNL is good.

• The comparative study o f actual and expected budget depicts that

financial department working good.

• Salary of employees is much better.

Conclusion:-After overhauling the Four years balance sheet of BSNL and all condition, I

have to reach this conclusion that;

Working process of BSNL is take very long time because of which, BSNL is not being able to progress. So improved the working process.

BSNL is facing the capital problem because of which financial position of BSNL are affected BSNL is paying more taxes. Because of paying more taxes, financial position of BSNL are affected.

There are very cut tough competitions among the private telecom companies on the level of new trend of advertising to silence a major part of Customers.

The entry of more Pvt. players in the telecom Sector have expanded the product segment to meet the different level of the requirement like 3G,Broadband, phone line, cable connection in on wire line to provide of the customers. It has brought about greater choice to the customers.

SuggestionThe study has provided with the useful data from the respondents. There has

a lot to be recommended. Following are the recommendations:

o There is a need for better promotion for the investment & services.

o More returns should be provided on revenues policies.

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o Recruit new qualified employees technical or non technical..

o Create new accounting or finance policies. This policies will help in generate revenues.

o Launch better plans for according to customers.

o Maintain Communication of each department.

o BSNL is computerized but today some department work with papers. These employees are not handle computer because they can’t that.

o Departmental processes so long I suggest make a short process of work to departmental.

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Bibliography

Bibliography69

BOOKS

Management Accounting Shashi K. Gupta & R.K. Sharma

Financial Management M.R.Agrawal

NEWSPAPERS

Economic Times. Business times

Business Standard

WEBSTIES

• w w w . bsn l . c o. i n • w w w . goog l e . c o m • w w w . m p b s n l . c o m

Wikipedia

Skype

• Office memorandum of BSNL

• Departmental Records

`MAGAZINES

Business world

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http://www.mpbsnl.com/

http://www.google.com/

http://www.bsnl.co.in/

final bsnl budget

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