(1) The Finance, Audit and Planning Committee shall cause to be prepared and laid before the municipality at a meeting, which shall be held between the first day of February and the tenth day of March, a complete account of the actual and expected receipts and expenditure for the official year ending on the thirtyfirst day of March next following together with a budget estimate of the income and expenditure of the municipality for the official year to commence on the first day of April next following.
(2) The municipality shall thereupon decide upon the appropriation and the ways and means contained in the budget of the year to commence on the first day of April next following. The budget as passed by the municipality shall be sent, through the Deputy Commissioner to the Director, before such date as may be fixed by the Director.
(3) In such budget estimate, the municipality shall among other things––
(a) make adequate and suitable provision for such service as may be required for the fulfilment of the several duties imposed on the municipality by this Act or any other law ;
(b) provide for the payment, as they fall due, of all instalments of principal and interest for which the municipality may be liable in respect of loans contracted by it ;
(c) allow for a balance at the end of said year of not less than such sum or percentage of income as may, from time to time, be fixed by the Director either generally for all municipalities or specially for any municipality.
(4) If such budget estimate is not in accordance with the provisions of this Act or the rules and orders issued thereunder, the Director may, within two months from the date of receipt of the budget, modify the same to secure compliance with the Act, the rules or the orders :
Provided that the Director shall not have power to direct that total proposed expenditure shall exceed the total of the estimated income of the municipality for the following year and the opening balance.
(5) If the municipality fails to approve the budget estimate on or before the date mentioned in sub-section (1), the Executive Officer or the Secretary of the municipality shall forward the budget estimate, through the Deputy Commissioner, to the Director who shall approve it with or without modification. The budget so approved by the Director shall be certified by the Director and thereupon shall be deemed to have been duly approved by the municipality.