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. SHANKAR SHARMA

MR JAYANT MAHAJAN
LECTURER

BRANCH MANAGER

ITM

BSNL

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

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
Fulfillment

at
of

BSNL
my

Dehradun
bachelors

for
of

the

Partial

business

administration.
Admittedly I have receive suggestion and
guidance from my guides.
Date ..

PRAGYA CHAURASIA
BBA V TH SEM.

(2013-16)

CONTENTS
Title

Training certificate
Acknowledgement
Preface
Candidates declaration
CHAPTER No.

DESCRIPTION

Chapter-1
1.1

Chapter-2

Introduction to the industry

An Introduction to telecom industry

introduction to organization
2.1 An introduction
2.2 vision
2.3 mission

Chapter-3

Chapter-4

Topic undertaken
3.1 budget analysis
part-1
Research Methodology
3.1 Research Problem
3.2 Research Objective
3.3 sources of data collection
Part-2
Data Analysis & Findings

Chapter-5

ii
iii
iv
v

Conclusions & suggestions

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.

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

Research methodology

36

Part-1

:- research design & methodology

37

:-Sources of data collection

38

:- objective of study

38

:- limitation of study

39

Chapter 04

Data analysis and findings

40

Part-2

:- budget statement of BSNL

41

:- expenses incurred by BSNL

45

:- data analysis & interpretation

49

:- findings

62

Chapter 5

Conclusion & suggestion

63

:- bibliography

66

Chapter 1
Introduction to the Industry
(telecommunication industry)

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
9

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

10

on the business/corporate sector, and offer reliable high- end services, such as
leased lines, ISDN, closed user group and videoconferencing.

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.

2.
3.
4.
5.
6.
7.

Airtel
Vodafone
Reliance
Bsnl
Idea
Tata Indicom
Aircel

Chapter 2
11

Introduction to the Organization

BSNL (BHARAT SANCHAR NIGAM LIMITED)

12

Bharat

Sanchar

Nigam

C o mmu n i ca t i on s Corporation

Limited

( known

as

BSNL,

India

Limited) is a public sector communications

company in India. It is the Indias 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 Indias 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
13

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.

14

BSNL

Type

State-owned

Industry

Telecommunications

Founded

19th century, incorporated

2000

Headquarters

New Delhi, India

Key people

ANUPAM SHRIVASTAVA
(Chairman) & (MD)

Products &

Wireless

services

Telephone
Internet
Television

Revenue

271.29 billion(2013)

Owner(s)

Government of India

Employees

216925 as on 30.9.2015

Website

www.bsnl.in

15

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, WCDMA, Internet / Broadband and IN services and development of
telecom software. Become the largest provider of private networks and
leased lines.
16

 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.

17

MAIN SERVICES PROVIDED BY BSNL

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)
18

Band width on Demand (planned)

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.

BSNLs Latest Plans 3G services & More

BSNL has awarded the contract to leading telecom equipment maker Ericsson &
Nokia Siemens network for upgrading its technical services.

19

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.
As part of the contract, Nokia Siemens Networks will deploy its Gigabit Ethernetcapable 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

comprehensive

portfolio

of

wireline

and wireless Broadband solutions including xDSL, GE, and GPON (Passive
Optical Networks), Carrier Ethernet, HSDPA, and WiMax.

20

21

Chapter 3
Topic BUDGET ANALYSIS

22

3.1

INTRODUCTION

Financial Management is that managerial activity which is concerned with the

planning and controlling of the firms 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

23

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 organizations 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;

24

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
25

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.
26

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 Budget
2. Short Term Budget
3. Current Budget
4. Rolling budget
ACCORDING TO FUNCTION:
1. Sales Budget
2. Production Budget
3. Cost of Production Budget
4. Purchase Budget
5. Personnel budget
6. R & D Budget

27

7. Capital Expenditure Budget

8. Cash Budget
9. Master Budget
ACCORDING TO EFFICIENCY:
1. Fixed Budget
2. 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.

28

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 longrange 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.

29

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 budgeting
2. Incremental budgeting
3. 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
periods 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, doesnt 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
30

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 incurrences of liabilities that result in decreases
in equity, other than those relating to distributions to equity participants.

31

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
32

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 governments
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.
b.
c.
d.

Domestic and foreign travel expenses

Publications
Professional services
Advertising and publicity
33

e. Office expenses
f. Pol

34

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 travel
No 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 BSNL

Standards 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
35

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.

36

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

OPPORTUNITIES

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

THREATS

Tremendous market growing at 20 lack

customers per month

Competition from private operators

Untapped broadband services

Keeping pace with fast technological

changes

Untouched international market

Can capitalize on public sector image to

grab governments ICT initiatives

Market maturity in basic telephone

segment

Manpower churning

ITEB service markets

Multinational eyeing Indian telecom

market

Diversification of business to turn-key

projects

Private operators demand for sharing

last mile

37

Chapter 4
Part-1
Research Methodology

38

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 i n 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,
39

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 companywww.bsnl.com.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
DEHRADUN.
40

Limitations of Study
Financial 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.

41

Chapter 4
Part-2
Data Analysis and Findings

42

BUDGET STATEMENT OF BSNL 2012-13

43

44

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 1520.
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.

45

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.

46

Expenses incurred by BSNL:- Budgeted and actual working

expenditure for FY 2012-13.

A. expenditure on payment &

Provision for employee remuneration

(amount in thousands)
budgeted amt actual amt

1.

Salary

226452

226452

2.

Medical allowances for Employee

14352

14352

3.

Wages

4.

Overtime allowance

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

10.

Pension contribution

29000

29000

11.

Leave salary contribution

211

211

12.

Employers contribution towards

EPF

2163

2163

13

Payment under workmen

compensation. Act

185

185

14.

Administrative charges on EPF a/c

373

373

15

Gratuity

16

Honorarium

47

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

48

34.

Meetings

95

95

35.

Lease charges

36.

Business promotion& marketing

expenses

500

500

37.

Advertisement

417

417

38.

Waiting charges

39.

Commission

40

Membership fee

41

Expenditure on services

378

378

Total

115695

115695

Grand Total

408154

408154

581

0
518

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

4.

Overtime allowance

49

5.

Leave travel concession

59

127

6.

Leave salary encashment

14074

11683

7.

Uniform

198

8.

Staff welfare and amenities

32

9.

Food allowance

10.

Pension contribution

22087

19329

11.

Leave salary contribution

181

130

12.

Employers contribution towards 1666

EPF

2554

13

Administrative charges on EPF

419

263

14.

Honorarium

15.

Incentive/bonus

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

23.

Vehicle running expenses

6904

6747

24.

Repair & maintenance

52454

37504

50

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

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

38.

Business promotion& marketing 500

expenses

434

39.

Advertisement

784

414

40.

Waiting charges

41

Expenditure on services

702

42.

Commission

46

1604

Total(b)

157197

111505

Grand Total

480730

426226

51

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
2012-13
2013-14

Budgeted
226452
277711

Actual
226452
268482

52

Differences
0
9229

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

Year
2012-13
2013-14

Budgeted
118
32

Actual
118
0

INTERPRETATION
53

Differences
0
32

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
Year
2012-13
2013-14

Budgeted
29000
22087

Actual
29000
19329

Differences
0
2758

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.

54

LEAVE TRAVEL CONCESSION

Year
2012-13
2013-14

Budgeted
385
59

Actual
385
127

Differences
0
68

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 68.
Here also company is gaining profit in 2013-14 as compare to the year 2012-13.
55

MEDICAL ALLOWANCES
Year
2012-13
2013-14

Budgeted
14352
7110

Actual
14352
11973

Differences
0
4863

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 4863.
Here also company is gaining profit in 2013-14 as compare to the year 2012-13.
56

Comparative analysis of Administrative expenses of 2 years

2012 -2013, and 2013-2014
RATES & TAXES
YEAR
2012-13
2013-14

BUDGET
10
314

ACTUAL
10
689

INTERPRETATION

57

DIFFERENCE
0
(375)

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
2012-13
2013-14

BUDGET
49007
52454

ACTUAL
49007
37504

DIFFERENCE
0
14950

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 14950.
58

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

GENERAL EXPENSES
YEAR
2012-13
2013-14

BUDGET
5309
9227

ACTUAL
5309
14393

DIFFERENCE
0
(5166)

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 (5166).

59

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

ADVERTISEMENT
YEAR
2012-13
2013-14

BUDGET
417
784

ACTUAL
417
417

INTERPRETATION

60

DIFFERENCE
0
370

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 370.
Here also company is gaining profit in 2013-14 as compare to the year 2012-13.

COMMISION
YEAR
2012-13
2013-14

BUDGET
581
46

ACTUAL
581
1604

INTERPREATATION
61

DIFFERENCE
0
(1558)

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 (1558).
Here we can see that company is suffering from loss in 2013-14 as compare to
previous year.

62

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 amount
Budgeted 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 categoriesBudgeted amount is more than actual amount
Following are the expenses which comes under this category1. Salary
2. 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

63

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 category1. Medical allowance
2. 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
64

17.Professional charges
18.Waiting charges
19.Commission
Budgeted amount is equal to actual amount
1. Books & periodicals

65

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.

66

Findings
In 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 201213 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.

67

Chapter 5
Conclusion and Suggestions

68

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.

Suggestion
The 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.

69

o More returns should be provided on revenues policies.

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 cant that.

o Departmental processes so long I suggest make a short process of

work to departmental.

70

Bibliography

Bibliography
71

BOOKS
Management Accounting Shashi K. Gupta & R.K. Sharma
Financial Management M.R.Agrawal

NEWSPAPERS

Economic Times.
Business times

Business Standard

WEBSTIES

www.bsnl.co.in
www.google.com
www.mpbsnl.com
Wikipedia
Skype

Office memorandum of BSNL

Departmental Records
`MAGAZINES

Business world

72