GENERAL

FINANCIAL RULES
2017

Updated up to 31.07.2024

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Ch.-1 - INTRODUCTION

Rule 1 Short Title and Commencement: These The term shall include a Head of
rules may be called General Financial Department and also an
Rules, 2017 and they shall come into Administrator;
force at once and shall be applicable to all
Central Government (xi) “Department of the Government
Ministries/Departments, attached and of India” means any of the
subordinate bodies. The provisions Ministries, Departments,
contained in GFRs are deemed to be Secretariats and Offices as notified
applicable to Autonomous Bodies except from time to time and listed in the
to the extent the bye-laws of an First Schedule to the Government of
Autonomous Body provides for separate India (Allocation of Business Rules);
Financial Rules which have been (xii) “Drawing and Disbursing
approved by the Government. Officer” means a Head of Office
Rule 2 Definition: In these rules, unless the and also any other Gazetted
context otherwise requires- Officer so designated by a
(i) “Accounts Officer” means the Department of the Central
Head of an Office of Accounts or Government, a Head of
the Head of a Pay and Accounts Department or an Administrator,
Office set up under the scheme of to draw bills and make payments
departmentalization of accounts; on behalf of the Central
(ii) “Administrator” means Government. The term shall also
Administrator of a Union include a Head of Department or
Territory, by whatever name an Administrator where he
designated; himself discharges such function;
(iii) “Appropriation” means the (xiii) “Ministry of Finance” means
assignment, to meet specified the Ministry of Finance of the
expenditure, of funds included in Central Government;
a primary unit of appropriation; (xiv) “Financial Year” means the
(iv) “Audit Officer” means the Head year beginning on the 1st of April
of an Office of Audit; and ending on the 31st of March
(v) “Competent Authority” means, following;
in respect of the power to be (xv) “Government” means the
exercised under any of these Central Government;
Rules, the President or such (xvi) “Government Account” means
other authority to which the the account relating to the
power is delegated by or under Consolidated Fund, the
these Rules, Delegation of Contingency Fund and the Public
Financial Power Rules or any Account; as defined in these
other general or special orders rules;
issued by the Government of (xvii) “Head of the Department’’
India; means an authority or person
(vi) “Comptroller and Auditor (not below the rank of a Deputy
General” means the Comptroller Secretary to the Government of
and Auditor General of India; India), declared by the concerned
(vii) “Consolidated Fund” means Department in the Government of
the Consolidated Fund of India India as a Head of Department in
referred to in Article 266 (1) of the relation to an identifiable
Constitution; establishment or establishments
(viii) “Constitution” means the to exercise the delegated
Constitution of India; financial powers under these
(ix) “Contingency Fund” means the Rules;
Contingency Fund of India (xviii) “Head of Office” means (a) a
established under the Gazetted Officer declared as
Contingency Fund of India Act, such in the Delegation of
1950, in terms of Article 267 (1) of Financial Powers Rules and (b)
the Constitution; any other authority declared as
(x) “Controlling Officer” means an such under any general or
officer entrusted by a Department special orders of the competent
of the Central Government with authority;
the responsibility of controlling (xix) “Local Body” means an
the incurring of expenditure authority legally entitled or
and/or the collection of revenue. specially empowered by

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Government to administer a local life;
fund; (xxxii) OPEX model: In the OPEX
(xx) “Local Fund” means a local fund model, the Seller provides the
as defined in Rule 652 of the goods, maintains it and also
Treasury Rules; provides the consumables as
(xxi) “Non-recurring expenditure” required and finally takes back
means expenditure other than the goods after useful /
recurring expenditure; contracted life. The expenditure
(xxii) “President” means the is made by the Buyer in a
President of India; staggered manner as per the
(xxiii) “Primary unit of appropriation” terms and conditions of the
means a primary unit of contract.
appropriation referred to in Rule 8
of the Delegation of Financial
Powers Rules; Rule 3 Interdepartmental consultations:
(xxiv) “Public Account” means the When the subject of a case concerns
Public Account of India referred more than one Department, no order shall
to in Article 266 (2) of the be issued until all such Departments have
Constitution; concurred, or, failing such concurrence, a
(xxv) “Public Works” means civil/ decision has been taken by or under the
electrical works including public authority of the Cabinet. In this regard it is
buildings, public services, clarified that every case in which a
transport infrastructure etc., both decision, if taken in one Department, is
original and repair works and any likely to affect the transaction of business
other project, including allotted to another Department, shall also
infrastructure which is for the use be deemed to be a case which concerns
of general public; more than one Department.
(xxvi) “Re-appropriation” means the Rule 4 Departmental Regulations of financial
transfer of funds from one character: All Departmental regulations,
primary unit of appropriation to in so far as they embody orders or
another such unit; instructions of a financial character or
(xxvii) “Recurring expenditure” have important financial bearing, must
means the expenditure which is invariably be made by, or with the
incurred at periodical intervals for approval of the Ministry of Finance.
the same purpose. Expenditures Rule 5 Removal of Doubts: Where a doubt
other than recurring expenditure arises as to the interpretation of any of the
are non-recurring expenditure; provisions of these Rules, the matter shall
(xxviii) “Reserve Bank” means the be referred to the Ministry of Finance for
Reserve Bank of India or any decision.
office or agency of the Reserve Rule 6 Modifications:
Bank of India and includes any (i) The systems and procedures
Bank acting as the agent of the established by these Rules are
Reserve Bank of India in subject to general or special
accordance with the provisions of instructions/ orders, which the
the Reserve Bank of India Act, Ministry of Finance may issue
1934 (Act II of 1934); from time to time.
(xxix) “Subordinate authority” means (ii) The systems and procedures
a Department of the Central established by these Rules may
Government or any authority be modified by any other
subordinate to the President; authority only with the express
(xxx) “Treasury Rules” means the approval of the Ministry of
Treasury Rules of the Central Finance.
Government;
(xxxi) CAPEX model: In the CAPEX
Model, Capital expenditures is
used by the buyer to straightway
purchase goods followed by
procurement of consumables,
arranging comprehensive
maintenance contract after
warranty period and finally
disposing the product after useful

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Ch.-2 - GENERAL SYSTEM OF FINANCIAL MANAGEMENT

Rule 7 All moneys received by or on behalf of the down in the regulations of the
Government either as dues of Department responsible for the same.
Government or for deposit, remittance or Rule 11 (2) In Departments in which officers are
otherwise, shall be brought into required to receive moneys on behalf of
Government Account without delay, in Government and issue receipts therefore
accordance with such general or special in Form GAR-6 the departmental
rules as may be issued under Articles 150 regulations should provide for the
and 283 (1) of the Constitution. maintenance of a proper account of the
Rule 8 (1) receipt and issue of the receipt books, the
(i) Under Article 284 of the number of receipt books to be issued at a
Constitution all moneys received time to each officer and a check with the
by or deposited with any officer officer’s accounts of the used books
employed in connection with the when returned.
affairs of the Union in his capacity Rule 12 Amounts due to Government shall not be
as such, other than revenues or left outstanding without sufficient
public moneys raised or received reasons. Where such amounts appear to
by Government, shall be paid into be irrecoverable, the orders of the
the Public Account. competent authority shall be obtained for
(ii) All moneys received by or their adjustment.
deposited with the Supreme Rule 13 Unless specially authorized by any rule or
Court of India or with any other order made by competent authority, no
Court, other than a High Court, sums shall be credited as revenue by
within a Union Territory, shall debit to a suspense head. The credit
also be dealt with in accordance must follow and not precede actual
with Clause (i) of sub-rule (1). realization.
Rule 8 (2) The Head of Account to which such Rule 14 Subject to any general or special orders
moneys shall be credited and the issued by a Department of the Central
withdrawal of moneys therefrom shall be Government, an Administrator or a Head
governed by the relevant provisions of of a Department responsible for the
Government Accounting Rules 1990 and collection of revenue shall keep the
the Central Government Account Finance Ministry fully informed of the
(Receipts and Payments) Rules, 1983 or progress of collection of revenue under
such other general or special orders as his control and of all important variations
may be issued in this behalf. in such collections as compared with the
Rule 9 It is the duty of the Department of the Budget Estimates.
Central Government concerned to ensure Rule 15 (1) Rents of buildings and lands. When
that the receipts and dues of the the maintenance of any rentable building
Government are correctly and promptly is entrusted to a civil department, other
assessed, collected and duly credited to than the Central Public Works
the Consolidated Fund or Public Account Department, the Administrator or the
as the case may be. Head of the Department concerned shall
Rule 10 The Controlling Officer shall arrange to be responsible for the due recovery of the
obtain from his subordinate officers rent thereof.
monthly accounts and returns in suitable Rule 15 (2) The procedure for the assessment
form claiming credit for the amounts paid and recovery of rent of any building hired
into the treasury or bank as the case may out will be regulated generally by the
be, or otherwise accounted for, and rules applicable to buildings under the
compare them with the statements of direct charge of the Central Public Works
credits furnished by the Accounts Officer Department.
to see that the amounts reported as Rule 15 (3) The detailed rules and procedure,
collected have been duly credited. regarding the demand and recovery of
Accordingly, each Accounts Officer will rent of Government buildings and lands,
send an extract from his accounts are contained in the departmental
showing the amounts brought to credit in regulations of the departments in charge
the accounts in each month to the of those buildings.
Controlling Officer concerned. Rule 16 (1) Fines. Every authority having the
Rule 11 (1) Detailed rules and procedure power to impose and/ or realize a fine
regarding assessment, collection, shall ensure that the money is realized,
allocation, remission and abandonment duly checked and deposited into a
of revenue and other receipts shall be laid treasury or bank as the case may be.

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Rule 16 (2) Every authority having the power to economy and see that all relevant
refund fines shall ensure that the refunds financial rules and regulations are
are checked and no double refunds of observed, by his own office and by
amounts of fines collected or refunds of subordinate disbursing officers. Among
fines not actually paid into a treasury or the principles on which emphasis is
bank as the case may be, are made generally laid are the following:-
Rule 17 Miscellaneous Demands. Accounts (i) Every officer is expected to
Officers shall watch the realization of exercise the same vigilance in
miscellaneous demands of Government, respect of expenditure incurred
not falling under the ordinary revenue from public moneys as a person
administration, such as contributions of ordinary prudence would
from State Governments, Local Funds, exercise in respect of
contractors and others towards expenditure of his own money.
establishment charges. (ii) The expenditure should not be
Rule 18 Remission of Revenue. A claim to prima facie more than the
revenue shall not be remitted or occasion demands.
abandoned save with the sanction of the (iii) No authority should exercise its
competent authority. powers of sanctioning
Rule 19 (1) Subject to any general or special expenditure to pass an order
orders issued by the Government which will be directly or indirectly
Departments of the Central Government, to its own advantage.
Administrators and Heads of (iv) Expenditure from public moneys
Departments, other than those in the should not be incurred for the
Department of Posts, shall submit benefit of a particular person or a
annually on the 1st of June to the Audit section of the people, unless –
Officer and the Accounts Officer (a) a claim for the amount could
concerned, statements showing the be enforced in a Court of
remissions of revenue and abandonment Law, or
of claims to revenue sanctioned during (b) the expenditure is in
the preceding year by competent pursuance of a recognized
authorities in exercise of the discretionary policy or custom.
powers vested in them otherwise than by Rule 22 Expenditure from Public Funds. No
law or rule having the force of law, authority may incur any expenditure or
provided that individual remissions below enter into any liability involving
Rupees one thousand need not be expenditure or transfer of moneys for
included in the statements. investment or deposit from public funds
Rule 19 (2)For inclusion in the statements (Consolidated Fund / Contingency Fund
referred to in Rule 19 (1) above, and the Public Accounts) unless the
remissions and abandonments should be same has been sanctioned by a
classified broadly with reference to the competent authority.
grounds on which they were sanctioned Rule 23 Delegation of Financial Powers. The
and a total figure should be given for each financial powers of the Government have
class. A brief explanation of the been delegated to various subordinate
circumstances leading to the remission authorities vide Delegation of Financial
should be added in the case of each Powers Rules as amended from time to
class. time. The financial powers of the
Rule20 Departments of the Central Government Government, which have not been
and Administrators may make rules delegated to a subordinate authority,
defining remissions and abandonments shall vest in the Finance Ministry.
of revenue for the purpose of Rule 19 Rule 24 Consultation with Financial Advisers.
above. All draft memoranda for Expenditure
Finance Committee or Public Investment
I. GENERAL PRINCIPLES RELATING TO Bureau or Committee on Establishment
EXPENDITURE AND PAYMENT OF Expenditure and Cabinet Committee for
MONEY Economic Affairs or Cabinet shall be
circulated by the Ministry or Department
Rule 21 Standards of financial propriety. Every concerned after consultation with the
officer incurring or authorizing concerned Financial Adviser of the
expenditure from public moneys should Ministry or Department. A confirmation to
be guided by high standards of financial this effect shall be included in the draft
propriety. Every officer should also memorandum at the circulation stage.
enforce financial order and strict

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Rule 25 (1) Provision of funds for sanction. All easement or privilege of such
sanctions to the expenditure shall concessions, or
indicate the details of the provisions in the
relevant grant or appropriation wherefrom (ii) involves relinquishment of
such expenditure is to be met. revenue in any way
Rule 25 (2) All proposals for sanction to Rule 29 Procedure for communication of
expenditure, shall indicate whether such sanctions. All financial sanctions and
expenditure can be met by valid orders issued by a competent authority
appropriation or re- appropriation. shall be communicated to the Audit
Rule 25 (3) In cases where it becomes necessary Officer and the Accounts Officer. The
to issue a sanction to expenditure before procedure to be followed for
funds are communicated, the sanction communication of financial sanctions and
should specify that such expenditure is orders will be as under:-
subjected to funds being communicated (i) All financial sanctions issued by a
in the budget of the year. Department of the Central
Rule 26 Responsibility of Controlling Officer in Government which relate to a
respect of Budget allocation. The matter concerning the
duties and responsibilities of a controlling Department proper and on the
officer in respect of funds placed at his basis of which payment is to be
disposal are to ensure: made or authorized by the
(i) that the expenditure does not Accounts Officer, should be
exceed the budget allocation. addressed to him.
(ii) that the expenditure is incurred (ii) All other sanctions should be
for the purpose for which funds accorded in the form of an Order,
have been provided. which need not be addressed to
(iii) that the expenditure is incurred in any authority, but a copy thereof
public interest. should be endorsed to the
(iv) that adequate control mechanism Accounts Officer concerned.
is functioning in his Department (iii) In the case of non-recurring
for prevention, detection of errors expenditure, the sanctioning
and irregularities in the financial authority may, where required,
proceedings of his subordinate accord sanction by signing or
offices and to guard against countersigning the bill or
waste and loss of public money, voucher, whether before or after
Rule 27 (1) Date of effect of sanction. Subject to the money is drawn, instead of by
fulfillment of the provisions as contained a separate sanction.1
in the Delegation of Financial Powers (iv) All financial sanctions and orders
Rules, all rules, sanctions or orders shall issued by a Department of the
come into force from the date of issue Central Government with the
unless any other date from which they concurrence of the Internal
shall come into force is specified therein. Finance Wing or Finance
Rule 27 (2) Date of creation to be indicated in Ministry, as applicable, should be
sanctions for temporary posts. Orders communicated to the Accounts
sanctioning the creation of a temporary Officer in accordance with the
post should, in addition to the sanctioned procedure laid down in the
duration, invariably specify the date from Delegation of Financial Powers
which it is to be created Rules, and orders issued
Rule 28 Powers in regard to certain special thereunder from time to time.
matters. Except in pursuance of the (v) All financial sanctions and orders
general delegation made by, or with the issued by a Department with the
approval of the President, a subordinate concurrence of the Ministry of
authority shall not, without the previous Home Affairs or Comptroller and
consent of the Finance Ministry, issue an Auditor General of India or
order which- Department of Personnel should
(i) involves any grant of land, or specify that the sanction or
assignment of revenue, or orders are issued with the
concession, grant, lease or concurrence of that Department
licence of mineral or forest rights, along with the number and date
or rights to water, power or any of relevant communication of that

1
Amended vide Department of Expenditure (DoE), Ministry of
Finance (MoF) OM No. 14(37)/2015-E.II.A dated 12.07.2024.

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Department wherein the should be endorsed to the Audit
concurrence was conveyed. Officers:-
(vi) All orders conveying sanctions to (a) Sanctions relating to grant to
expenditure of a definite amount advances to Central
or upto a specific limit should Government employees.
express both in words and (b) Sanctions relating to
figures the amount of appointment or promotion or
expenditure sanctioned. transfer of Gazetted and
(vii) Sanctions accorded by a Head of non- Gazetted Officers.
Department may be (c) All sanctions relating to
communicated to the Accounts creation or continuation or
Officer by an authorized abolition of posts.
Gazetted Officer of his Office (d) Sanctions for handing over
duly signed by him for the Head charge and taking over
of Department or conveyed in the charge, etc.
name of the Head of the (e) Sanctions relating to
Department. payment or withdrawal of
(viii) All orders conveying sanctions to General Provident Fund
the grant of additions to pay such advances to Government
as Special Allowance, Personal servants.
Pay, etc., should contain a brief (f) Sanctions of contingent
summary of the reasons for the expenditure incurred under
grant of such additions to pay so the powers of Head of
as to enable the Accounts Officer Offices.
to see that it is correctly termed (g) Other sanctions of routine
as Special Allowance, Personal nature issued by Heads of
Pay, etc., as the case may be. Subordinate Officers (other
(ix) Orders issued by a Department than those issued by
of a Union Territory Government Ministries or Departments
where Audit and Accounts (a) proper and under powers of
have not been separated shall be a Head of Department).
communicated direct to the Audit (xii) Sanctions accorded by
authority; (b) have been competent authority to grants of
separated, copies shall be land and alienation of land
endorsed to the Audit authorities. revenue, other than those in
In case of sanctions in respect of which assignments of land
matters, where reference was revenue are treated as cash
made to the Central Government payment, shall be communicated
under the Rules of Business to the Audit and/ or the Accounts
framed under Section 46 of the Officer, as the case may be, in a
Government of Union Territory consolidated monthly return
Act, 1963, the following clause giving the necessary details.
shall be added in the sanction Rule 30 Lapse of Sanctions. A sanction for any
endorsed to Audit:- fresh charge shall, unless it is specifically
“A reference had been made in renewed, lapse if no payment in whole or
this case to the Central in part has been made during a period of
Government and the above twelve months from the date of issue of
order/letter conforms to the such sanction. Provided that -
decision of the Central (i) when the period of currency of
Government vide Government of the sanction is prescribed in the
India, Ministry/Department of departmental regulations or is
Letter No…………dated… ”. specified in the sanction itself, it
(x) Copies of all General Financial shall lapse on the expiry of such
Orders issued by a Department periods; or
of the Central Government with (ii) when there is a specific provision
the concurrence of the in a sanction that the expenditure
Comptroller and Auditor General would be met from the Budget
of India shall be supplied to the provision of a specified financial
Comptroller and Auditor General year, it shall lapse at the close of
of India. that financial year; or
(xi) Copies of all sanctions or orders (iii) in the case of purchase of stores,
other than the following types a sanction shall not lapse, if

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tenders have been accepted (in (c) refunds allowed on the
the case of local or direct ground that the claims were
purchase of stores) or the indent time-barred:
has been placed (in the case of (ii) Petty losses of value not
Central Purchases) on the exceeding Rupees ten thousand.
Central Purchase Organization Rule 33 (2) Cases involving serious irregularities
within the period of one year of shall be brought to the notice of Financial
the date of issue of that sanction, Adviser or Chief Accounting Authority of
even if the actual payment in the Ministry or Department concerned
whole or in part has not been and the Controller General of Accounts,
made during the said period. Ministry of Finance.
Rule 31 Notwithstanding anything contained in Rule 33 (3) Report of loss contemplated in sub-
Rule 30, a sanction in respect of an rule (1) & (2) shall be made at two
addition to a permanent establishment, stages:-
made from year to year under a general (i) An initial report should be made
scheme by a competent authority, or in as soon as a suspicion arises
respect of an allowance sanctioned for a that a loss has taken place.
post or for a class of Government (ii) The final report should be sent to
servants, but not drawn by the officer(s) authorities indicated in sub rule
concerned, shall not lapse. (1) & (2) after investigation
Rule32 Remission of disallowances by Audit indicating nature and extent of
and writing off of overpayment made loss, errors or neglect of rules by
to Government servants. The remission which the loss has been caused
of disallowances by Audit and writing off and the prospects of recovery.
of overpayments made to Government Rule 33 (4) The complete report contemplated in
servants by competent authorities shall sub- rule 3, shall reach through proper
be in accordance with the provisions of channels to the Head of the Department,
the Delegation of Financial Powers who shall finally dispose of the same
Rules, and instructions issued under the powers delegated to him under
thereunder. the Delegation of Financial Power Rules.
The reports, which he cannot finally
II. DEFALCATION AND LOSSES dispose of under the delegated powers,
shall be submitted to the Finance
Rule 33 (1) Report of Losses. Any loss or Ministry.
shortage of public moneys, departmental Rule 33 (5) An amount lost through
revenue or receipts, stamps, opium, misappropriation, defalcation,
stores or other property held by, or on embezzlement, etc., may be redrawn on
behalf of, Government irrespective of the a simple receipt pending investigation,
cause of loss and manner of detection, recovery or write-off with the approval of
shall be immediately reported by the the authority competent to write-off the
subordinate authority concerned to the loss in question.
next higher authority as well as to the Rule 33 (6) In cases of loss to Government on
Statutory Audit Officer and to the account of culpability of Government
concerned Principal Accounts Officer, servants, the loss should be borne by the
even when such loss has been made Central Government Department or State
good by the party responsible for it. Government concerned with the
However, the following losses need not transaction. Similarly, if any recoveries
be reported: are made from the erring Government
(i) Cases involving losses of officials in cash, the receipt will be
revenue due to credited to the Central Government
(a) mistakes in assessments Department or the State Government
which are discovered too who sustained the loss.
late to permit a Rule 33 (7) All cases involving loss of
supplementary claim being Government money arising from
made, erroneous or irregular issue of cheques
(b) under assessments which or irregular accounting of receipts will be
are due to interpretation of reported to the Controller General of
the law by the local authority Accounts along with the circumstances
being overruled by higher leading to the loss, so that he can take
authority after the expiry of steps to remedy defects in rules or
the time-limit prescribed procedures, if any, connected therewith.
under the law, and

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Rule 34 Loss of Government Property due to should be completed promptly with
fire, theft, fraud. Departmental Officers special attention to action against
shall, in addition to taking action as delinquents and remedial measures,
prescribed in Rule 33, follow the taken to strengthen the control system
provisions indicated below in cases
involving material loss or destruction of III. SUBMISSION OF RECORDS AND
Government property as a result of fire, INFORMATION
theft, fraud, etc.
All losses above the value of Rupees Fifty Rule 39 Demand for information by Audit or
thousand due to suspected fire, theft, Accounts Officer. A subordinate
fraud, etc., shall be invariably reported to authority shall afford all reasonable
the Police for investigation as early as facilities to the Audit Officer and Pay and
possible. Accounts Officer for the discharge of his
Once the matter is reported to the Police functions, and furnish fullest possible
Authorities, all concerned should assist information required by him for the
the Police in their investigation. A formal preparation of any official account or
investigation report should be obtained report, payments and internal audit.
from the Police Authorities in all cases, Rule 40 A subordinate authority shall not withhold
which are referred to them. any information, books or other
Rule 35 Loss of immovable property by fire, documents required by the Audit Officer
flood etc. All loss of immovable property or Accounts Officer.
exceeding Rupees fifty thousand, such Rule 41 If the contents of any file are categorized
as buildings, communications, or other as ‘Secret’ or ‘Top Secret’ the file maybe
works, caused by fire, flood, cyclone, sent personally to the Head of the Audit
earthquake or any other natural cause, Office specifying this fact, who will then
shall be reported at once by the deal with it in accordance with the
subordinate authority concerned to standing instructions for handling and
Government through the usual channel. custody of such classified documents.
All other losses should be immediately
brought to the notice of the next higher
authority.
Rule 36 Report to Audit and Accounts
Officers. After a full enquiry as to the
cause and the extent of the loss has been
made, the detailed report should be sent
by the subordinate authority concerned to
Government through the proper channel;
a copy of the report or an abstract thereof
being simultaneously forwarded to the
Audit officer and Pay and Accounts
Officer.
Rule 37 Responsibility of losses. An officer
shall be held personally responsible for
any loss sustained by the Government
through fraud or negligence on his part.
He will also be held personally
responsible for any loss arising from
fraud or negligence of any other officer to
the extent to which it may be shown that
he contributed to the loss by his own
action or negligence.
The Departmental proceedings for
assessment of responsibility for the loss
shall be conducted according to the
instructions contained in Appendix 1 and
those issued by the Ministry of Personnel
from time to time.
Rule 38 Prompt disposal of cases of loss.
Action at each stage of detection,
reporting, write off, final disposal, in
cases of losses including action against
delinquents and remedial measures

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Ch.-3 - BUDGET FORMULATION AND IMPLEMENTATION

Rule 42 Financial Year. Financial year of the item wise break-up of all major items of
Government shall commence on the 1st tax and non-tax revenues are clearly
day of April of each year and end on the identified and depicted in the receipt
31st day of March of the following year. estimates. This is required to highlight all
Rule 43 (1) Presentation of Budget to individual items of significance. Any
Parliament. major variation in estimates with
In accordance with the provisions of reference to past actuals or/and Budget
Article112 (1) of the Constitution, the Estimates shall be supported by cogent
Finance Minister shall arrange to lay reasons. The accounting heads under
before both the Houses of Parliament, an which major tax and non-tax revenues
Annual Financial Statement also known are collected shall be prescribed by the
as the ‘Budget’ showing the estimated administrative Ministry in consultation
receipts and expenditure of the Central with the Budget Division in the Finance
Government in respect of a financial year, Ministry.
before the commencement of that year. Rule46 Non-Tax Revenues. While the tax
Rule43 (2) The receipts and expenditure of the revenues, non- debt capital receipts
Railways being a departmental including disinvestments and borrowings
commercial organization form part of the are managed by the various Departments
Government’s receipts and expenditure of the Ministry of Finance, the non-tax
and are included in the Annual Financial revenues are collected through all
Statement. With the merger of Railway Ministries/Departments and other
Budget with the General Budget, the autonomous bodies and implementing
Demands for Grants and the Statement agencies and comprise an important
of Budget Estimates of Railways shall source of revenue for the Government.
also be part of the General Budget with Rule 47 User Charges. ‘User Charges’ is an
effect from 2017-18. important component of the non-tax
Rule 43 (3) The provisions for preparation, revenues. Each Ministry/Department may
formulation and submission of budget to undertake an exercise to identify the ‘user
the Parliament are contained in Articles charges’ levied by it and publish the same
112 to 116 of the Constitution of India. on its website.
Rule43 (4) The Ministry of Finance, Budget (i) While fixing the rates of user
Division, shall issue guidelines for charges, the
preparation of budget estimates from Ministries/Departments must
time to time. All the ensure that the user charges
Ministries/Departments shall comply in recover the current cost of
full with these guidelines. providing services with
Rule44 The budget shall contain the following: - reasonable return on capital
(i) Estimates of all revenues investment.
expected to be raised during the (ii) Any deviation from these
financial year to which the budget principles shall be specifically
relates; recorded with reasons justifying
(ii) Estimates of all expenditure for the setting of user charges lower
each programme, scheme and than the cost recovery norms, if
project in that financial year; any.
(iii) Estimates of all interest and debt (iii) The rates of user charges should
servicing charges and any be linked with appropriate price
repayments on loans in that indices and reviewed at least
financial year; every three years.
(iv) Any other information as may be (iv) In order to enable ease of
prescribed. revision of user charges, the rate
Rule 45 Receipt Estimates. The detailed of user charges shall be fixed,
estimates of receipts shall be prepared by wherever possible through Rules
the estimating authorities separately for or executive orders and not
each Major Head of Account in the through a statute.
prescribed form. For each Major Head, Rule 48 Dividends and Profits. Dividends and
the estimating authority shall give the profits including the transfer of surplus
break-up of the Minor/Subhead/ Detailed from Reserve Bank of India is a major
wise estimate along with actuals of the component of the non-tax revenues. The
past three years. While doing the head payment of dividends/profits etc. by the
wise classification, it may be ensured that Central Public Sector Enterprises shall

10
not be delayed and must be paid within Demand for Grants.
an appropriate time frame immediately Rule 51 (2) Generally, one Demand for Grant is
after the decision on dividend is taken in presented in respect of each Ministry or
the AGM. Ministries or Departments shall Department. However, in respect of large
monitor timely payments of dividends and Ministries or Departments, more than one
profits. The dividend shall be payable as Demand may be presented. Each
per the guidelines issued by DIPAM in Demand normally includes provisions
this regard. required for a service, i.e. provisions on
Rule 49 Receipts Portal. The Government has account of revenue expenditure, capital
provided a public portal for online expenditure, grants to the State and
collection of various non-tax revenues Union Territory Governments and also
including various fees and user charges Loans and Advances relating to the
through e- Receipts. All service.
Ministries/Departments, shall take Rule 51 (3) The Demand for Grants shall be
prompt measures for migration to e- presented to Parliament at two levels.
Receipts, to ensure customer The main Demand for Grants shall be
convenience and immediate credit of presented to Parliament by the Ministry of
receipts to the Government account. Finance, Budget Division along with the
Rule 50 (1) Expenditure estimates. The Annual Financial Statement while the
expenditure estimates shall show Detailed Demands for Grants, for
separately the sums required to meet the consideration by the “Departmentally
expenditure Charged on the Related Standing Committee” (DRSC) of
Consolidated Fund under Article 112 (3) the Parliament, are laid on the Table of
of the Constitution and sums required to the Lok Sabha by the concerned
meet other expenditure for which a vote Ministries/ Departments, as per dates
of the Lok Sabha is required under Article approved from time to time.
113(2) of the Constitution. Rule 52 (1) Form of Annual Financial
Rule 50 (2) The estimates shall also distinguish Statement and Demands for Grant.
provisions for expenditure on revenue The form of the Annual Financial
account from capital account, including Statement and Demands for Grants shall
on loans by the Government and for be laid down by the Finance Ministry and
repayment of loans, treasury bills, cash no alteration of arrangement or
management bills and ways and means classification shall be made without the
advances. approval of that Ministry.
Rule 50 (3) The detailed estimates of expenditure Rule 52 (2) The heads under which provision for
shall be prepared by the estimating expenditure shall be made in the
authorities up to the final unit of Demands for Grants or Appropriation
appropriation (Object head) under the shall be prescribed by the Finance
prescribed Major and Minor Heads of Ministry in consultation with the
Accounts for both Revenue and Capital Administrative Ministry or Department.
expenditure. Estimates shall include The authorized heads for expenditure in
suitable provision for liabilities of the a year shall be as shown in the Detailed
previous years that is to be discharged Demands for Grants passed by
during the year. Parliament and no change shall be made
Rule50 (4) The estimates of scheme related and therein without the formal approval of the
other expenditures shall be processed in Finance Ministry.
consultation with the Budget Division, Rule 52 (3) The major head wise provisions in the
Ministry of Finance in accordance with Detailed Demands for Grants shall match
the instructions issued by it. with the provision made in the Demands
Rule 50 (5) The Revised and Budget Estimates of for Grants presented by Budget Division,
both Revenue and Capital expenditure as the appropriations are sought on the
after being scrutinized by the Financial basis of Demands for Grants.
Advisers and approved by the Secretary NOTE: Detailed instructions for
of the Administrative Ministry or preparation of the budget are available in
Department concerned shall be Appendix 2, 3 and 4.
forwarded to the Budget Division in the Rule 53 (1) Acceptance and inclusion of
Ministry of Finance in such manner and estimates. The estimates of receipts and
forms as may be prescribed by it from expenditure of each Ministry/Department
time to time. shall be scrutinized in the Budget Division
Rule 51 (1) Demands for Grants. The estimates of the Ministry of Finance. Secretary
for expenditure for which vote of Lok (Expenditure) may hold meetings with
Sabha is required shall be in the form of Secretaries or Financial Advisers of

11
Administrative Ministries or Departments Departments which, in turn, shall
to discuss the totality of the requirements distribute the same to their subordinate
of funds for various programmes and formations. The distribution so made
schemes, along with receipts of the shall also be communicated to the
Ministries or Departments. respective Pay and Accounts Officers
Rule 53 (2) The estimates initially submitted by who shall exercise check against the
the Departments may undergo some allocation to each subordinate authority.
changes as a result of scrutiny in the
Budget Division, Ministry of Finance and II. CONTROL OF EXPENDITURE
deliberations in the pre-budget meetings AGAINST BUDGET
between the Secretary (Expenditure) and
the Secretary or Financial Adviser of the Rule 57 (1) Responsibility for control of
Department concerned. The final Expenditure. The Departments of the
estimates arrived at on the basis of Central Government shall be responsible
scrutiny and pre-budget meetings shall for the control of expenditure against the
be incorporated in the Budget sanctioned grants and appropriations
documents. placed at their disposal. The control shall
Rule 54 Outcome Budget. After finalization of be exercised through the Heads of
the estimates for budgetary allocations, Departments and other Controlling
the Department of Expenditure in Officers, if any, and Disbursing Officers
consultation with NITI Aayog and the subordinate to them.
concerned Ministries shall prepare an Rule 57 (2) A Grant or Appropriation can be
Outcome Budget statement linking utilised only to cover the charges
outlays against each scheme/project with (including liabilities, if any, of the past
the outputs/deliverables and medium- year) which are to be paid during the
term outcomes. The outputs/deliverables financial year of the Grant or
shall be mandatorily given in Appropriation and adjusted in the account
measurable/quantitative terms on the of the year. No charges against a Grant
basis of parameters and deliverables or Appropriation can be authorized after
decided in advance, on the basis of the expiry of the financial year.
projections made in the Medium-Term Rule 57 (3) No expenditure shall be incurred
Expenditure Framework (MTEF) which may have the effect of exceeding
Statement. Allocations for each the total grant or appropriation authorized
scheme/project shall be against a firm set by Parliament by law for a financial year,
of deliverables which shall be adhered to. except after obtaining a supplementary
The performance against specified grant or appropriation or an advance from
outcomes would form the basis of the Contingency Fund. Since voted and
deciding on the continuation of the charged portions as also the revenue and
scheme and the quantum of budget capital sections of a Grant/Appropriation
allocation. are distinct and re-appropriation inter se
Rule 55 Vote on Account. If the Appropriation is not permissible, an excess in any one
Bill seeking authorization of the portion or section is treated as an excess
Parliament to make expenditure in in the Grant/Appropriation.
consonance with the Budget proposal is Rule57(4) To have effective control over expenditure
likely to be passed after the start of the by the Departments, Controlling and
financial year to which it corresponds Disbursing Officers subordinate to them
then pending the completion of the shall follow the procedure as given
procedure prescribed in Article 113 of the below:-
Constitution for the passing of the (i) For drawl of money the Drawing
Budget, the Finance Ministry may need to and Disbursing Officer shall (a)
obtain a ‘Vote on Account’ to cover Prepare and present bills for
expenditure for a brief period in “charged” and “voted”
accordance with the provisions of Article expenditure separately. (b) Enter
116 of the Constitution. Funds made on each bill the complete
available under Vote on Account are not accounts classifications from
to be utilized for expenditure on a ‘New major head down to the object
Service’. head of account. When a single
Rule 56 Communication and distribution of bill includes charges falling under
grants and appropriations. After the two or more object heads, the
Appropriation Bill relating to Budget is charges shall be distributed
passed, the Ministry of Finance shall accurately over the respective
communicate the same to the Ministries / heads. (c) Enter on each bill the

12
progressive total of expenditure GFR 7, in which he shall
up-to-date under the primary unit incorporate –
of appropriation to which the bill (a) the totals of the figures
relates, including the amount of supplied by Disbursing
the bill on which the entry is Officers;
made. (b) the totals taken from his own
(ii) All drawing and disbursing registers in Form GFR 5;
officers shall maintain separate (c) the totals of such
registers in Form GFR 5, adjustments under the
physically or electronically for various detailed heads as
allocation under each minor or communicated to him by the
sub-head of account with which Accounts Officer on account
they are concerned. of transfer entries and
(iii) On the third day of each month, a expenditure debited to the
copy of the entries made in this grant as a result of
register during the preceding settlement of inward
month shall be sent by the officer account claims and not
maintaining it, to the Head of the reckoned by his DDOs.
Department or other designated (vii) If any adjustment communicated
Controlling Officer. This by the Accounts Officer affects
statement shall also include the appropriation at the disposal
adjustment of an inward claim, of a subordinate Disbursing
etc., communicated by Pay and Officer, the fact that the
Accounts Officer directly to the adjustment has been made shall
DDO (and not to his Grant be communicated by the
Controlling Officer). If there are Controlling Officer to the
no entries in the register in any Disbursing Officer concerned.
month, a ‘nil’ statement shall be (viii) On receipt of all the necessary
sent. returns, the Head of the
(iv) The Controlling Officer will Department shall prepare a
maintain a broadsheet in Form consolidated account in Form
GFR 6 to monitor the receipt of GFR 8, showing the complete
the return prescribed in the expenditure from the grant or
foregoing sub- clause appropriation at his disposal upto
(v) On receipt of the returns from the end of the preceding month.
Disbursing Officers, the Rule 57 (5) The Head of the Department and the
Controlling Officer shall examine Accounts Officer shall be jointly
them and satisfy himself: responsible for the monthly reconciliation
(a) that the accounts of the figures given in the accounts
classification has been maintained by the Head of the
properly given; Department with those appearing in the
(b) that progressive Accounts Officer’s books. The procedure
expenditure has been for reconciliation shall be as follows: -
properly noted and the (i) DDOs shall maintain a Bill
available balances worked Register in Form TR 28-A, and
out correctly; note all bills presented for
(c) that expenditure up-to-date payment to the PAO in the
is within the grant or register. As soon as cheques for
appropriation; and the bills presented for payment
(d) that the returns have been are received, and/or status of e-
signed by Disbursing payments are verified from the
Officers. Where the reports available with DDO on
Controlling Officer finds PFMS portal these shall be noted
defects in any of these in the appropriate column of the
respects, he shall take steps Bill Register and the DDOs shall
to rectify the defect. ensure that the amounts of
(vi) When all the returns from the cheques tally with the net amount
Disbursing Officers for a of the bills presented. In case any
particular month have been retrenchment is made by the
received and found to be in order, PAO, a note of such
the Controlling Officer shall retrenchments shall be kept
compile a statement in Form against the bill in the remarks

13
column in TR 28-A. Principal Accounts Officer
(ii) The PAOs shall furnish to each of certifying the correctness of the
the DDOs including Cheque – figures for the quarter by the 15th
drawing DDOs, an extract from of the second following month
the expenditure control register after the end of quarters April-
or from the Compilation Sheet June, July-September, October-
every month indicating the December and January- March.
expenditure relating to grants Rule 57 (6) The Departments of the Central
controlled by him classified under Government shall obtain from their
the various major-minor detailed Heads of Departments and other offices
head of accounts. The under them the departmental figures of
statements for May to March expenditure in Form GFR 8 by the 15th of
shall also contain Progressive the month following the month to which
Figures. the returns relate. The figures relating to
(iii) On receipt of these extracts from Revenue and Capital expenditure shall
the PAOs, the DDOs shall tally be separately shown in these returns.
the figures received, excluding The information so obtained shall be
book adjustments, with the posted in register(s) kept for watching the
expenditure worked out for the flow of expenditure against the
month in the GFR 5 register. sanctioned grant or appropriation.
Discrepancies, if any, between Progressive totals of expenditure shall be
the two sets of figures shall be worked out for the purpose. If the
promptly investigated by the departmental figures obtained in Form
DDO in consultation with the GFR 8 and posted in the register(s),
PAO. He shall also note in the require correction in a subsequent month,
GFR 5 register particulars of Heads of Departments or other offices
book adjustments advised by the shall make such corrections by making
PAO through the monthly plus or minus entries in the progressive
statement. Thereafter, the DDO totals. In case the Accounts Office figures
shall furnish to the PAO a which subsequently become available
certificate of agreement of the are found to be higher than departmental
figures as per his books with figures, the former shall be assumed to
those indicated by the PAOs by be the correct figures, as appropriation
the last day of the month accounts are prepared on the basis of the
following the month of accounts. figures booked in the accounts.
(iv) The Principal Accounts Officer Rule 57 (7) The Departments of Central
(or PAO wherever payments, Government shall also obtain from the
relating to a grant are handled Heads of Departments and other
wholly by a PAO) of each authorities under them, statements
Ministry, shall send a monthly showing the details of the physical
statement showing the progress of the schemes for which they
expenditure vis-à-vis the Budget are responsible. This statement shall
provision under the various show the name of the scheme, the
heads of accounts, in the Budget provision for each scheme, the
prescribed pro forma, to the progressive expenditure on each
Heads of Departments scheme, the progress of the scheme in
responsible for overall control of physical terms and the detailed reasons
expenditure against grant of the for any shortfalls or excess, both against
Ministry as a whole. The figures physical and financial targets.
so communicated by the Rule 57 (8) A Broadsheet in Form GFR 9 shall be
Principal Accounts Officer (or the maintained by the Departments of
PAO concerned) shall be Central Government or each Head of
compared by the Heads of Department and other authorities directly
Departments with those under them, to watch the prompt receipt
consolidated in Form GFR 8 and of the various returns mentioned above
differences, if any, shall be taken from month to month and to take
up by the Heads of Departments necessary measures for rectifying any
with the Principal Accounts defaults noticed.
Officers (or the PAO concerned) Rule 58 Maintenance of Liability Register for
for reconciliation. The Head of effecting proper control over
the Department shall furnish a expenditure. In order to maintain proper
quarterly certificate to the control over expenditure, a Controlling

14
Officer shall obtain from the spending financial year.
authorities liability statements in Form Rule 62 (2) The savings as well as provisions that
GFR 3- A every month, starting from the cannot be profitably utilised shall be
month of October in each financial year. surrendered to Government immediately,
The Controlling Officer shall also they are foreseen without waiting till the
maintain a Liability Register in Form GFR end of the year. No savings shall be held
3. in reserve for possible future excesses.
Rule 59 Personal attention of the Head of Rule 62 (3) Rush of expenditure, particularly in
Department /Controlling Officer the closing months of the Financial Year,
required to estimate savings or shall be regarded as a breach of financial
excesses. A Head of Department or propriety and shall be avoided. The
Controlling Officer shall be in a position to Financial Advisers of the
estimate the likelihood of savings or Ministries/Departments shall ensure
excesses every month and to regularize adherence to the stipulated Monthly
them in accordance with the instructions Expenditure Plan and the guidelines
laid down in Rule 62. issued in this regard by the Budget
Rule 60 Control of expenditure against Division, Department of Economic
grant/appropriation and ultimate Affairs, from time to time.
responsibility of the authority Rule 62 (4) The Financial Advisers of the
administering it. The Accounts Officer Ministries/ Departments shall ensure
shall report to the Head of the adherence to the stipulated Quarterly
Department concerned immediately on Expenditure Plan and the guidelines
the first appearance of any issued in this regard by Ministry of
disproportionate expenditure, particularly Finance from time to time.
in respect of recurring items of Rule 63 Expenditure on New Service. No
expenditure under any grant or expenditure shall be incurred during a
appropriation or a primary unit of financial year on a “New Service” not
appropriation thereof. However, the contemplated in the Annual Budget for
authority administering a grant/ the year except after obtaining a
appropriation is ultimately responsible for supplementary grant or appropriation or
the control of expenditure against the an advance from the Contingency Fund
grant/appropriation and not the Accounts during that year. The guidelines to
Officer. determine cases of “New Service”/ “New
Rule 61 Excess Expenditure. Instrument of Service” are contained in
1. The Accounts Officer shall not Annexure-1 to Appendix -3.
allow any payment against Rule 64 (1) Additional Allotment for excess
sanctions in excess of the Budget expenditure. A subordinate authority
provisions unless there is specific incurring the expenditure shall be
approval of the Chief Accounting responsible for seeing that the allotment
Authority. placed at its disposal is not exceeded.
2. The Financial Advisers and Chief Where any excess over the allotment is
Accounting Authority, before apprehended, the subordinate authority
according concurrence for shall obtain additional allotment before
excess under any Head, shall incurring the excess expenditure. For this
ensure availability of funds purpose, the authorities incurring
through Re-appropriation/ expenditure shall maintain a ‘Liability
Supplementary Demands for Register’ in Form GFR 3.
Grants. (Refer Appendix 10) Rule 64 (2) A Disbursing Officer may not, on his
Rule 62 (1) Surrender of savings. Departments own authority, authorize any payment in
of the Central Government shall excess of the funds placed at his
surrender to the Finance Ministry, by the disposal. If the Disbursing Officer is
dates prescribed by that Ministry before called upon to honour a claim, which is
the close of the financial year, all the certain to produce an excess over the
anticipated savings noticed in the Grants allotment or appropriation at his disposal,
or Appropriations controlled by them. The he shall take the orders of the
Finance Ministry shall communicate the administrative authority to which he is
acceptance of such surrenders as are subordinate before authorizing payment
accepted by it to the Accounts Officer, of the claim in question. The
before the close of the year. The funds administrative authority shall then
provided during the financial year and not arrange to provide funds either by re-
utilized before the close of that financial appropriation or by obtaining a
year shall stand lapsed at the close of the Supplementary Grant or Appropriation or

15
an advance from the Contingency Fund. sufficient time for the voting of the
Instructions contained in Note below Supplementary Demand and the passing
Appendix 10 may also be kept in view. of the connected appropriation bill before
Rule 65 (1) Re-appropriation of Funds. Subject close of the financial year, an advance
to the provisions of Rule 10 of the from the Contingency Fund set up under
Delegation of Financial Powers Rules, Article 267(1) of the Constitution shall be
and also subject to such other general or obtained before incurring the
specific restrictions as may be imposed expenditure.
by the Finance Ministry in this behalf, re- Rule 67 (2) An advance from the Contingency
appropriation of funds from one primary Fund shall also be obtained to meet
unit of appropriation to another such unit expenditure in excess of the provisions
within a grant or appropriation, may be for the service included in an
sanctioned by a competent authority at Appropriation (Vote on Account) Act.
any time before the close of the financial Rule 67 (3) The application for an advance from
year to which such grant or appropriation the Contingency Fund shall indicate inter
relates. The Primary unit in this regard alia the particulars of the additional
shall be the final unit of appropriation i.e. expenditure involved and the sanction to
the Object head of account. the advance has also to indicate the sub-
Rule 65 (2) Re-appropriation of funds shall be head and the primary unit of the Grant to
made only when it is known or anticipated which the expenditure appropriately
that the appropriation for the unit from relates. In case, however, any difficulty is
which funds are to be transferred shall felt, the matter shall be referred to the
not be utilized in full or that savings can Finance Ministry for clarification.
be effected in the appropriation for the Rule 67 (4) The procedure for obtaining an
said unit. advance from the Contingency Fund and
Rule 65 (3) Funds shall not be re-appropriated recoupment of the Fund shall be as laid
from a unit with the intention of restoring down in the Contingency Fund of India
the diverted appropriation to that unit (Amendment) Rules, 2021 as amended
when savings become available under from time to time. For ready reference,
other units later in the year. rules have been placed at Appendix - 6 to
Rule 65 (4) An application for re-appropriation of this volume.
funds shall ordinarily be supported by a [Note: The Contingency Fund of India
statement in Form GFR 1 or any other (Amendment) Rules, 2021 were
special form authorized by departmental published in Extraordinary Gazette of
regulations showing how the excess is India vide No. G.S.R. 721(E) dated 4th
proposed to be met. In all orders, October, 2021.]2
sanctioning re-appropriation, the reasons Rule 68 Inevitable Payments.
for saving and excess of Rupees 1 lakh (i) Subject to the provisions of
or over and the primary units (secondary Article 114(3) of the Constitution,
units, wherever necessary), affected shall money indisputably payable by
be invariably stated. The authority Government shall not ordinarily
sanctioning the re-appropriation shall be left unpaid.
endorse a copy of the order to the (ii) Suitable provision for anticipated
Accounts Officer. liabilities shall invariably be made
Rule 66 Supplementary Grants. If savings are in Demands for Grants to be
not available within the Grant to which the placed before Parliament.
payment is required to be debited, or if Rule 69 For easy reference an extract relating to
the expenditure is on “New Service” or procedures followed in the Accounts
“New Instrument of Service” not provided Office for check against provision of
in the budget, necessary Supplementary funds as a part of pre-check of bills has
Grant or Appropriation in accordance with been placed at Appendix 10.
Article 115(1) of the Constitution shall be Rule 70 Duties and Responsibilities of the
obtained before payment is authorized Chief Accounting Authority. The
(Refer to Appendix 5). Secretary of a Ministry/Department who
Rule 67 (1) Advance from Contingency Fund. is the Chief Accounting Authority of the
When a need arises to incur unforeseen Ministry/ Department shall: —
expenditure in excess of the sanctioned (i) be responsible and accountable
grant or appropriation or on a new service for financial management of his
not provided in Budget and there is not Ministry or Department.

2
Inserted vide DoE’s OM No.8(18)/2021/E.II.A dated 06.05.2022 in
view of DEA OM F.No.4(13)-B(SD)/2021 dated 18.04.2022

16
(ii) ensure that the public funds
appropriated to the Ministry or
Department are used for the
purpose for which they were
meant.
(iii) be responsible for the effective,
efficient, economical and
transparent use of the resources
of the Ministry or Department in
achieving the stated project
objectives of that Ministry or
Department, whilst complying
with performance standards.
(iv) appear before the Committee on
Public Accounts and any other
Parliamentary Committee for
examination.
(v) review and monitor regularly the
performance of the programmes
and projects assigned to his
Ministry to determine whether
stated objectives are achieved.
(vi) be responsible for preparation of
expenditure and other
statements relating to his Ministry
or Department as required by
regulations, guidelines or
directives issued by Ministry of
Finance.
(vii) shall ensure that his Ministry or
Department maintains full and
proper records of financial
transactions and adopts systems
and procedures that shall at all
times afford internal controls.
(viii) shall ensure that his Ministry or
Department follows the
Government procurement
procedure for execution of works,
as well as for procurement of
services and supplies, and
implements it in a fair, equitable,
transparent, competitive and
cost- effective manner;
(ix) shall take effective and
appropriate steps to ensure his
Ministry or Department: -
(a) collects all moneys due to
the Government and
(b) avoids unauthorized,
irregular and wasteful
expenditure.

17
Ch.-4 - GOVERNMENT ACCOUNTS
Rule 71 Preparation and presentation of accounts shall represent the actual cash
Accounts. Accounts of the Union receipts and disbursements during a
Government shall be prepared every year financial year as distinguished from
showing the receipts and disbursements amounts due to or by Government during
for the year, surplus or deficit generated the same period.
during the year and changes in Rule75 Period of Accounts. The annual
Government liabilities and assets. The accounts of the Central Government shall
accounts shall be prepared by Controller record transactions which take place
General of Accounts, certified by the during a financial year running from the
Comptroller and Auditor General of India 1st April to the 31st March thereof.
and along with the report of the Rule 76 Currency in which Accounts are kept.
Comptroller and Auditor General of India The accounts of Government shall be
on these accounts, shall be submitted to maintained in Indian Rupees. All foreign
the President of India, preferably within currency transactions and foreign aid
six months of close of the Financial Year, shall be brought into account after
who shall cause them to be laid before conversion into Indian Rupees.
each House of Parliament. Rule 77 Main Divisions and structure of
Rule 72 Form of Accounts. By virtue of the Accounts. The accounts of Government
provisions of Article 150 of the shall be kept in three parts, Consolidated
Constitution, the Accounts of the Union Fund (Part-I), Contingency Fund (Part-II)
Government shall be kept in such form as and Public Account (Part-III).
the President may, on the advice of the Part-I – Consolidated Fund is divided into
Comptroller and Auditor General of India, two Divisions, namely, ‘Revenue’ and
prescribe. ‘Capital’ divisions. The Revenue Division
The Controller General of Accounts in the comprises the following sections:
Ministry of Finance (Department of ‘Receipt Heads (Revenue Account)’
Expenditure) is responsible for dealing with the proceeds of taxation and
prescribing the form of accounts of the other receipts classified as revenue and
Union and States, and to frame, or revise, the section ‘Expenditure Heads
rules and manuals relating thereto on (Revenue Account)’ dealing with the
behalf of the President of India in terms of revenue expenditure met therefrom. The
Article 150 of the Constitution of India, on Capital Division comprises three
the advice of the Comptroller and Auditor sections, viz., ‘Receipt Heads (Capital
General of India. Account)’, ‘Expenditure Heads (Capital
Rule 73 Principles of Accounting. The main Account)’ and ‘Public Debt, Loans and
principles according to which the Advances, etc.’. These sections are in
accounts of the Government of India shall turn divided into sectors such as ‘General
be maintained are contained in Services’, ‘Social and Community
Government Accounting Rules, 1990; Services’, ‘Economic Services’, etc.,
Accounting Rules for Treasuries; and under which specific functions or services
Account Code Volume-III. Detailed rules are grouped corresponding to the sectors
and instructions relating to the forms of of classification and which are
the initial and subsidiary accounts to be represented by Major Heads (comprising
kept and rendered by officers of the Sub-Major Heads wherever necessary).
Department of Posts and other technical In Part-II – Contingency Fund- are
departments are laid down in the recorded transactions connected with the
respective Accounts Manuals or in the Contingency Fund set up by the
departmental regulations relating to the Government of India under Article 267 of
Departments concerned. the Constitution or Section 48 of
Rule74 Cash based Accounting. Government Government of Union Territories Act,
accounts shall be prepared on cash 1963. There shall be a single Major Head
basis. With the exception of such book to record the transactions thereunder,
adjustments as may be authorised by which will be followed by Minor, Sub
Government Accounting Rules, 1990 or and/or Detailed Heads.
by any general or special order issued by In Part-III – Public Account- transactions
the Central Government on the advice of relating to debt (other than those included
the Comptroller and Auditor General of in Part-I), reserve funds, deposits,
India, the transactions in Government advances, suspense, remittances and

18
cash balances shall be recorded. Power Rules. The power to amend or
Rule 78 Classification of transactions in modify these Object heads and to open
Government Accounts. As a general new Object Heads rest with Department
rule, classification of transactions in of Expenditure of Ministry of Finance on
Government Accounts, shall have closer the advice of the Comptroller and Auditor
reference to functions, programmes and General of India.
activities of the Government and the Rule 80 Conformity of budget heads with rules
object of revenue or expenditure, rather of classification. Budget Heads
than the department in which the revenue exhibited in estimates of receipts and
or expenditure occurs. expenditure framed by the Government
Major Heads (comprising Sub-Major or in any appropriation order shall
Heads wherever necessary) are divided conform to the prescribed rules of
into Minor Heads. Minor Heads may have classification.
a number of subordinate heads, generally Rule 81 Responsibility of Departmental
known as Sub Heads. The Sub Heads officers. Every officer responsible for the
are further divided into Detailed Heads collection of Government dues or
followed by Object Heads. expenditure of Government money shall
The Major Heads of account, falling see that proper accounts of the receipts
within the sectors for expenditure heads, and expenditure, as the case may be, are
generally correspond to functions of maintained in such form as may have
Government, while the Minor Heads been prescribed for the financial
identify the programmes undertaken to transactions of Government with which
achieve the objectives of the functions he is concerned and tender accurately
represented by the Major Head. The Sub and promptly all such accounts and
Head represents schemes, the Detailed returns relating to them as may be
Head denotes sub scheme and Object required by Government, Controlling
Head represent the primary unit of Officer or Accounts Officer, as the case
appropriation showing the economic may be.
nature of expenditure such as salaries Rule82 Classification should be recorded in
and wages, office expenses, travel all the bills and challans by Drawing
expenses, professional services, grants- Officers. Suitable classification shall be
in-aid, etc. The above six tiers are recorded by Drawing Officers on all bills
represented by a unique 15-digit numeric drawn by them. Similarly, classification
code. on challans crediting Government money
Rule 79 Authority to open a new Head of into the Bank shall be indicated or
Account. The List of Major and Minor recorded by Departmental Officers
Heads of Accounts of Union and States is responsible for the collection of
maintained by the Ministry of Finance Government dues, etc. In cases of doubt
(Department of Expenditure – Controller regarding the Head under which a
General of Accounts) which is authorised transaction should be accounted, the
to open a new head of account on the matter shall be referred to the Principal
advice of the Comptroller and Auditor Accounts Officer of the Ministry/
General of India under the powers flowing Department concerned for clarification of
from Article 150 of the Constitution. It the Ministry of Finance and the Controller
contains General Directions for opening General of Accounts, wherever
Heads of Accounts and a complete list of necessary.
the Sectors, Major, Sub-Major and Minor Rule 83 Charged or Voted Expenditure. The
Heads of Accounts and also some expenditure covered under Article 112 (3)
Sub/detailed heads, authorised to be so of the Constitution of India is charged on
opened. the Consolidated Fund of India and is not
Ministries/Departments may open Sub- subject to vote by the legislature. All other
Heads and Detailed Heads as required expenditure met out of the Consolidated
by them in consultation with the Budget Fund of India is treated as Voted
Division of the Ministry of Finance. Their expenditure. Charged or Voted
Principal Accounts Offices may open Expenditure shall be shown separately in
Sub/Detailed Heads required under the the accounts as well as in the Budget
Minor Heads falling within the Public documents.
Account of India subject to the above Rule 84 Capital or Revenue Expenditure.
stipulations. Significant expenditure incurred with the
The Object Heads have been prescribed object of acquiring tangible assets of a
under Government of India’s Orders permanent nature (for use in the
below Rule 8 of Delegation of Financial organisation and not for sale in the

19
ordinary course of business) or level of implementation on PFMS
enhancing the utility of existing assets, to track fund flow and unspent
shall broadly be defined as Capital balances.
expenditure. (3) All the payment, to the extent
Subsequent charges on maintenance, possible, shall be released ‘just-
repair, upkeep and working expenses, in-time’ by the Ministries through
which are required to maintain the assets PFMS.
in a running order as also all other (4) Detailed Demand for Grants
expenses incurred for the day to day (DDG), as approved, must be
running of the organisation, including uploaded on PFMS at the start of
establishment and administrative each Financial Year.
expenses shall be classified as Revenue (5) All the re-appropriation orders,
expenditure. Capital and Revenue surrender order shall be
expenditure shall be shown separately in generated through PFMS
the Accounts. system.
Rule 85 Banking Arrangements. The Reserve (6) All grantee institutions shall
Bank of India (RBI) shall be the banker to submit Utilisation Certificates on
the Government. It shall maintain cash PFMS.
balance of the Government and provide Rule 87 Direct Benefit Transfer.
banking facilities to the Ministries and (1) Transfer of benefits should be
subordinate or attached offices either done directly to beneficiaries
directly through its own offices or through under various Government
its agent banks. For this purpose, RBI Schemes and Programmes using
shall, in consultation with the Controller Information and Communication
General of Accounts, nominate a bank to Technology (ICT). Necessary
function as Accredited Bank of a Ministry process reengineering to
or Department. Pay & Accounts offices minimise intermediary levels and
and Cheque Drawing and Disbursing to reduce delay in payments to
Officer shall have assignment accounts intended beneficiaries with the
with the identified branches of the objective of minimising pilferage
Accredited Bank of the Ministry. All and duplication should be done
payments shall be made through these for all Government Schemes and
identified bank branches. These Programmes. The process for
branches shall also collect departmental implementation of DBT as
and other receipts. Tax revenues of the prescribed should be adopted.
Government shall be collected by the RBI (2) DBT should include in-kind and
through its own offices or through the cash transfers to beneficiaries as
nominated branches of its agent banks. well as transfers/honorariums
Note: Detailed procedure to be followed given to various enablers of
for remittance of Government receipts government schemes like
into Government cash balance and community workers, etc. for
reimbursement of payments made on successful implementation of the
behalf of Government by the banks are schemes.
laid down in the Memoranda of (3) Transfer of cash benefits from
Instructions issued by the Reserve Bank Ministries/Departments should
of India. be done (a) directly to
Rule 86 Public Financial Management System beneficiaries from
(PFMS).— Ministries/Departments; (b)
(1) Public Financial Management through State Treasury Account;
System (PFMS), an integrated or (c) through any Implementing
Financial Management System Agency as appointed by Central /
of Controller General of State Governments.
Accounts, Government of India, (4) In-kind Transfer to Individual
shall be used for sanction Beneficiary/ Household/Service
preparation, bill processing, provider includes schemes or
payment, receipt management, components of schemes where
Direct Benefit Transfer, fund flow in-kind benefits are given by the
management and financial Government or through any
reporting. Implementing Agency as
(2) All the ministries sanctioning appointed by Centre/State
grant-in-aid shall register all Governments to Individual
implementing agencies till last Beneficiary/ Household/ Service

20
providers. General of Accounts countersigned by
(5) Ministries/Departments will use the Secretary (Expenditure), Ministry of
PFMS platform for processing of Finance.
payments for cash / in kind Rule90 Presentation of Annual accounts. The
transfers to individual Appropriation and Finance accounts
beneficiaries as per framework mentioned above, shall be prepared by
laid down by Department of the respective authorities on the dates
Expenditure, Ministry of Finance. mutually agreed upon with the
(6) Implementing Agencies shall Comptroller and Auditor General of India,
generate Electronic Utilisation in the forms prescribed by the President
Certificate (E-UCs) on PFMS on the advice of the Comptroller and
portal and submit them online. E- Auditor General of India and sent to the
UCs shall be used to certify that latter for recording his/her certificate. The
money was actually utilized for certified Annual Accounts and the
the purpose for which it was Reports relating to the accounts shall be
sanctioned to eliminate the need submitted by the Comptroller and Auditor
for physical generation of UCs. General of India to the President in
(7) Transaction charges for the accordance with the provisions of Section
financial intermediaries 11 of the Comptroller and Auditor
facilitating DBT payments shall General’s (Duties, Powers and
be paid as stipulated by Ministry Conditions of Service) Act, 1971 and
of Finance. Clause (1) of Article 151 of the
Constitution of India.
II. ANNUAL ACCOUNTS Rule 91 Administrative Ministries / PSUs /
Subordinate / Statutory / Autonomous
Rule88 Appropriation Accounts. Appropriation Bodies may have financial stakes in
Accounts of Central Ministries (other than Public Private Partnerships (PPP)/
Ministry of Railways) and of Central Civil Production Sharing Contracts (PSCs)/
Departments (excluding Department of Joint Ventures (JV’s)/ Subsidiary
Posts and Defence Services) shall be companies etc. In such case details of the
prepared by the Principal Accounts financial stakes of the Government or
Officers of the respective Ministries and other entities mentioned above, should
Departments (under the guidance and be disclosed in the Annual Report of the
supervision of the Controller General of Administrative Ministry.
Accounts) and signed by their respective
Chief Accounting Authorities i.e., the III. PROFORMA ACCOUNTS
Secretaries in the concerned Ministries or
Departments. Union Government Rule 92 Subsidiary Accounts of Government
Appropriation Accounts (Civil) required to Departments undertaking commercial
be submitted to Parliament, shall be activities. Where the operations of
prepared annually by the Controller certain Government Departments
General of Accounts by consolidating the working on a commercial or quasi-
aforesaid Appropriation Accounts. commercial basis e.g., an industrial
Appropriation Accounts pertaining to factory or a store cannot be suitably
Departments of Posts and Defence brought within the cash-based
Services shall be prepared and signed by Government accounting system, the
the Secretaries to the Government of Head of the units shall be required to
India in the Department of Posts and maintain such subsidiary proforma
Ministry of Defence respectively and that accounts in commercial form as may be
of Ministry of Railways by the Chairman, agreed between Government and
Railway Board. Comptroller and Auditor General of India.
Rule 89 Finance Accounts. Annual accounts of This includes the maintenance of suitable
the Government of India (including Manufacturing, Trading, Profit & Loss
transactions of Department of Posts and Accounts and Balance Sheet.
Ministries of Defence and Railways and Rule93 Methods and principles on which
transactions under Public Account of subsidiary accounts in commercial
India of Union Territory Governments), form are to be kept. The methods and
showing under the respective Heads the principles in accordance with which
annual receipts and disbursements and subsidiary and proforma accounts in
statement of balances for the purpose of commercial form are to be kept shall be
the Union, called Finance Accounts, shall regulated by orders and instructions
be prepared and signed by the Controller issued by Government in each case.

21
Note 1. Proforma accounts of regular Account. The Personal Deposit Account
Government Workshops and Factories shall be authorised to be opened by a
shall be kept in accordance with the special order by the concerned Ministry
detailed rules and procedure prescribed or Department in consultation with the
in the departmental regulations. Proforma Controller General of Accounts. Such
accounts relating to Public Works shall be special order or permission shall be
prepared by the Accounts Officers in issued or granted by the Ministry or
accordance with the instructions Department concerned after it is satisfied
contained in Account Code for that the initial accounts of the moneys to
Accountants General. be held in a personal deposit account and
Note 2. The Heads of Account (which disbursed, shall be arranged to be
should, as far as possible, be common to maintained properly and shall be subject
the Government accounts and the to audit. Every personal deposit account
General Ledger maintained by a so authorised to be opened, shall form
Commercial Undertaking) shall be part of the Government Account and be
selected with due regard to the principles located in the Public Account thereof. The
of Governmental and Commercial provisions relating to “Personal Deposit
accounting so that the monthly classified Account” are contained in para 16.7 of
account of income and expenditure of the Civil Accounts Manual and Rule 191 to
undertaking may be prepared readily 194 of Central Government Account
from the General Ledger maintained by it. (Receipts and Payments) Rules.
Rule 94 Adequate regulations to be framed to Rule 97 (2) Personal Deposit accounts shall
ensure cost deduced is accurate and generally be authorised to be opened in
true. Where commercial accounts are the following types of cases:
maintained for the purpose of (a) In favour of a Designated Officer
assessment of the cost of an article or appointed for the purpose of
service, the Head of the unit shall ensure administering monies tendered
that adequate regulations are framed with by or on behalf of wards and
the approval of Government in order to attached estates under
ensure that the cost deduced from the Government management. It
accounts is accurate and true. shall also be ensured that proper
Rule 95 Maintenance and submission of arrangements are made for the
subsidiary accounts and statements maintenance and audit of
by department units. The Head of the connected initial accounts;
unit shall arrange to obtain the orders of (b) in relation to Civil and Criminal
Government regarding the nature and Courts’ deposits, in favour of the
form of subsidiary accounts and Chief Judicial Authority
statements, if any. Such accounts and concerned;
statements shall be submitted to the (c) where, under certain regulatory
Accounts Officer on such date as may be activities of the Government,
required by him. The same shall be receipts are realised and credited
appended to the Appropriation Accounts to a Fund or Account under the
of each year. provisions of an Act to be utilised
towards expenditure thereunder
IV. PERSONAL DEPOSIT ACCOUNTS and no outgo from the
Consolidated Fund is involved.
Rule 96 Personal Deposit Account. Personal (d) where a personal deposit
Deposit Account is a device intended to account is required to be created
facilitate the Designated Officer thereof to by a law or rules having the force
credit receipts into and effect withdrawals of law and certain liabilities
directly from the account, subject to an devolve on the Government out
overall check being exercised by the of the special enactments;
bank in which the account is authorised (e) officers commanding units and
to be opened. The Designated Officer others concerned in the
shall ensure (with the help of a personal administration of public funds in
ledger account to be maintained by the the Defence Departments can be
bank for the purpose) that no withdrawal authorised to open personal
will result in a minus balance therein. deposit accounts for such funds.
Only Government officers acting in their
official or any other capacity shall be the V. CAPITAL AND REVENUE ACCOUNTS
Designated Officer thereof.
Rule 97 (1) Authority to open Personal Deposit Rule 98 Capital Expenditure. Significant

22
expenditure incurred with the object of (b) Subject to Clause (c) below,
acquiring tangible assets of a permanent revenue shall bear subsequent
nature (for use in the organisation and not charges for maintenance and all
for sale in the ordinary course of working expenses. These
business) or enhancing the utility of embrace all expenditure on the
existing assets, shall broadly be defined working and upkeep of the
as Capital expenditure. Subsequent, project and also on renewals
charges on maintenance, repair, upkeep and replacements and
and working expenses, which are additions, improvements or
required to maintain the assets in a extensions that are revenue in
running order as also all other expenses nature as per rules made by
incurred for the day to day running of the Government.
organisation, including establishment (c) In the case of works of renewal
and administrative expenses, shall be and replacement, which partake
classified as Revenue expenditure. expenditure both of a capital and
Capital and Revenue expenditure shall revenue nature, the allocation of
be shown separately in the Accounts. expenditure shall be regulated by
Expenditure on a temporary asset or on the broad principle that Revenue
grants-in-aid cannot ordinarily be should pay or provide a fund for
considered as a capital expenditure and the adequate re- placement of all
shall not, except in cases specifically wastage or depreciation of
authorised by the President on the advice property originally provided out of
of the Comptroller and Auditor General of capital grants. Only the cost of
India, be debited to a Capital Head. genuine improvements, which
Capital expenditure is generally met from enhance the useful life of the
receipts of capital nature, as asset whether determined by
distinguished from ordinary revenues prescribed rules or formulae, or
derived from taxes, duties, fees, fines and under special orders of
similar items of current income including Government, may be debited to
extraordinary receipts. It is open to the Capital. Where under special
Government to meet capital expenditure orders of Government, a
from ordinary revenues, provided there Depreciation or Renewals
are sufficient revenue resources to cover Reserve Fund is established for
this liability. renewing assets of any
Expenditure of a Capital nature as commercial department or
defined above, shall not be classed as undertaking, the distribution of
Capital expenditure in the Government expenditure on renewals and
Accounts unless the classification has replacements between Capital
been expressly authorised by general or and the Fund shall be so
special orders of Government. regulated as to guard against
Expenditure of a Capital nature shall be over-capitalisation on the one
distinguished from the Revenue hand and excessive withdrawals
Expenditure both in the Budget Estimates from the Fund on the other.
and in Government Accounts. (d) Expenditure on account of
Rule99 Principles for allocation of reparation of damage caused by
expenditure between Capital and extraordinary calamities such as
Revenue. The following are the main flood, fire, earthquake, enemy
principles governing the allocation of action, etc., shall be charged to
expenditure between Revenue and Capital, or to Revenue, or divided
Capital: between them, depending upon
(a) Capital shall bear all charges for whether such expenditure results
the first construction and in creation/acquisition of new
equipment of a project as well as assets or whether it is only for
charges for intermediate restoring the condition of the
maintenance of the work while existing assets, as may be
not yet opened for service. It shall determined by Government
also bear charges for such according to the circumstance of
further additions and each case.
improvements, which enhance (e) Expenditure on a temporary
the useful life of the asset, as asset cannot ordinarily be
may be sanctioned under rules considered as a capital
made by competent authority. expenditure and shall not, except

23
in cases specifically authorised such conversion of loans may be
by the President on the advice of explained in the relevant
the Comptroller and Auditor Budget/Supplementary Demand
General of India, be debited to a documents. After obtaining the approval
Capital Head. of the Parliament, the balances under
Rule 100 Allocation between capital and loans and the progressive expenditure of
revenue expenditure: The allocation the Capital Heads of Accounts shall be
between capital and revenue expenditure corrected proforma in the relevant
on a Capital Scheme for which separate Accounts of the Union Government,
Capital and Revenue Accounts are to be under the Loan/Capital Major Heads
kept, shall be determined in accordance concerned.
with such general or special orders as
may be prescribed by the Government VI. INTEREST ON CAPITAL
after consultation with the Comptroller
and Auditor General of India. Rule 104 Interest rate. Except in special cases
Rule101 Capital receipts during construction regulated by special orders of
mainly to be utilised in reduction of Government, interest at such rates as
capital expenditure: Capital receipts in may be specified from time to time shall
so far they relate to expenditure be charged in the accounts of all
previously debited to Capital accruing Commercial Departments or units for
during the process of construction of a which separate capital and revenue
project, shall be utilised in reduction of accounts are maintained within the
capital expenditure. Thereafter their Government accounts.
treatment in the accounts will depend on Rule 105 (1) Charging of interest on capital
circumstances, but except under special outlay met out of specific loans raised
rule or order of Government, they shall by Government. For capital outlay met
not be credited to the revenue account of out of specific loans raised by
the department or undertaking. Government, the interest shall be
Rule 102 Receipts and recoveries representing charged at such rate as may be
recoveries of expenditure previously prescribed by Government, having
debited to Capital Major Head: regard to the rate of interest actually paid
Receipts and recoveries on Capital on such loans and the incidental charges
Account in so far as they represent incurred in raising and managing them.
recoveries of expenditure previously By specific loans are meant loans that are
debited to a Capital Major Head shall be raised in the open market for one specific
taken in reduction of expenditure under purpose which is clearly specified in the
the Major Head concerned except where, prospectus and in regard to which definite
under the rules of allocation applicable to information is given at the time of raising
a particular department, such receipts of the loans.
have to be taken to Revenue. Rule 105 (2) For capital outlay provided otherwise,
Rule 103 Conversion of outstanding loans into interest shall be charged at the rate of
equity investments or grants-in-aid. interest to be determined each year by
Government takes from time to time, the Department of Economic Affairs,
suitable measures to strengthen/ Ministry of Finance.
restructure the Capital base of public Rule 106 Method of calculation of interest. The
sector enterprises so that these interest shall be calculated on the direct
enterprises can improve their capital outlay at the end of the previous
performance and productivity. As a part year plus half the outlay of the year itself,
of the package scheme, financial relief in irrespective of whether such outlay has
the form of conversion of outstanding been met from current revenues or from
loans into equity investments or grants- other sources.
in-aid are also agreed to. Rule 107 How interest charged to capital is to be
Where loans outstanding against Public written back. When under any special
Sector Undertakings are proposed to be orders of Government, charges for
converted into equity investments in or as interest during the process of
grants-in-aid to the Public Sector construction of a project are temporarily
Undertakings, the approval of the met from capital, the writing back of
Parliament to such proposals, shall be capitalised interest shall form the first
obtained by including a token provision in charge on any capital receipts or surplus
the relevant Demands for Grants or revenue derived from the project when
Supplementary Demands for Grants as opened for working.
may be found expedient. The details of

24
VII. ADJUSTMENT WITH GOVERNMENT Union Territories) and the State
DEPARTMENTS ETC Governments have agreed under
reciprocal arrangements not to prefer
Rule 108 Adjustments with State Governments. petty and isolated claims for an amount
Subject to the relevant provision of the not exceeding Rupees ten thousand
Constitution or of law made by Parliament against one another
or any orders issued thereunder, Rule 112 Criteria in determining whether a
adjustments in respect of financial particular claim is covered by the
transactions with State Governments reciprocal arrangement. The significant
shall, unless otherwise provided for, be criterion in determining whether a
made in such manner, and to such extent particular claim is covered by the
as may be mutually agreed upon reciprocal arrangement mentioned
between the Central Government and the above, will be that the claim shall be both
State Government concerned. However, petty and of an occasional character and
adjustments with State Government in shall cover services rendered and not
respect of the matters mentioned below supplies made unless the latter forms
shall be regulated by the rules contained part of service. The term “service
in Appendix-5 to the Government rendered” will be taken to mean an
Accounting Rules, 1990. The rules are individual act of service, like providing
based on reciprocal arrangements made police escort to a high dignitary and will
with the State Governments and are, not apply to supply of stores etc. Claims
therefore, binding on all of them: - relating to Commercial undertakings
(i) Pay and Allowances, other than under the Government of India or the
Leave Salaries. State Governments such as those of the
(ii) Leave Salaries. Railways, the Department of Post, the
(iii) Pensions. Electrical undertakings, etc., shall fall
(iv) Expenditure involved in Audit and outside the purview of the proposed
keeping Accounts. reciprocal arrangements and shall
(v) Cost of Police functions on continue to be settled as hitherto.
Railways including the cost of If a doubt arises as to whether a particular
protecting Railway Bridges. claim would fall within or outside the
(vi) Cost of Forest Surveys carried purview of the proposed arrangement, it
out by the Survey of India, and shall be decided by mutual consultation.
Forest maps prepared by that The above arrangements will remain in
Department. force without any time limit in respect of
(vii) Leave Salary and Pension all State Governments.
Contributions recovered in Rule 113 Projects jointly executed by several
respect of Government servants State Governments. In the case of
lent on Foreign Service Projects, jointly executed by several
Rule 109 Re-audit. As a convention, a period of Governments, where the expenditure is
three years has been accepted by the to be shared by the participating
Central and State Governments for the Governments in agreed proportions, but
re- audit of past transactions involving the expenditure is ab-initio incurred by
errors in classification one Government and shares of other
Rule110 When adjustment necessary. participating Governments recovered
Adjustment shall always be made unless subsequently; such recoveries from other
otherwise agreed upon — Governments shall be exhibited as
(a) If a commercial department or abatement of charges under the relevant
undertaking or a regularly expenditure Head of Account in the
organised store department or books of the Governments incurring the
store section of a department is expenditure initially
concerned, or Rule 114 Claims of State Governments on
(b) If under the operation of any rule account of the extra cost of agency
or order, an adjustment would functions. Claims of State Governments,
have been made if the particular on account of the extra cost of agency
transaction withState functions entrusted to them under Article
Government were a transaction 258 of the Constitution shall be dealt with
between two departments of the and settled in accordance with such
Central Government. directions as may be issued by the
Rule 111 Petty and isolated claims for services President in this regard from time to time
rendered not to be preferred. The Rule 115 The following principles shall be generally
Central Government (which includes observed in dealing with claims preferred

25
by State Governments under Clause (3) annual statement of
of Article 258 of the Constitution: — proposed charges from the
(i) If the agency work involves the State Government at the
employment of a State time of preparation of the
Commercial Department, it would Budget. However, if in any
be open to that department to individual case, the
charge its normal commercial charges are obviously
costs. static, then the contract
(ii) Public Works Department system may be adopted in
agency costs shall be these cases also.
represented by such percentage (v) In exceptional cases in which
charges on the cost of Central arbitration has to be resorted to,
Works executed by the State as the Ministry of Finance will make
may be agreed between the the requisite arrangement in the
Central and the State matter.
Government concerned, works (vi) The Ministry of Finance shall be
outlay being treated as an consulted on all matters arising
amount placed at the disposal of under Article 258 (3) of the
the State Government for actual Constitution.
expenditure on the execution of Rule 116 Principles governing transactions in
the work. connection with the agency functions
(iii) The cost of regular joint entrusted to State Government. The
establishment shall be shared as following procedure shall be followed in
far as practicable on the basis of regard to transactions arising in
fixed annual sums settled in connection with the agency functions
agreement with the State entrusted to the State Governments
Government concerned. under Article 258 of the Constitution:
(iv) In other cases, the following (i) The expenditure on extra staff
procedure shall be adopted or contingencies which the
unless there are special orders to State Government have to
the contrary:- incur-The extra cost to the State
(a) Details of claims preferred Government arising mainly in
by State Governments respect of the additional staff
shall be ascertained. employed or contingent and
(b) If the work has been other expenditure, as in the case
performed by the State of work devolving on the State
Government in the past, Governments in connection with
the charges shall be the administration of the Census
compared with those Act, is reimbursable under Article
charged in the past but it is 258 (3) of the Constitution.
not necessary to be Expenditure in this regard shall
meticulous in the matter. be provided in the State Budget
(c) If the charges are found to in the first instance and adjusted
be reasonable and do not in the accounts of the State
exceed Rupees Fifty Governments under the normal
thousand per annum for Heads of Accounts. These will be
any individual item (or reimbursed in lumpsum to the
connected group of items), State Governments, necessary
a five years contract shall provision being made under a
be offered to the State distinct sub-head ”Amounts paid
Government during which to other Governments,
the Central Government Departments, etc.”, under the
would pay the fixed sum concerned Demand of the
per annum for the work. Ministry administratively
The amount will be concerned with the subject. In
subjected to review at the computing the extra cost, the
end of each period of five element of leave and pensionary
years. charges can also be included,
(d) If the amount agreed upon provided the relevant service and
exceeds Rupees Fifty financial rules of the State
thousand, it shall be Governments provide for this.
necessary to have an

26
(ii) The expenditure on work
entrusted to the State
Government, such as therefore, be made to settle as far as
expenditure on construction possible all transactions with State
and maintenance of National Governments before the close of the
Highways, expenditure on year.
Defence Works, Aviation
Works, etc.-The expenditure Rule 118 Adjustments with foreign
directly connected with the Governments, outside bodies, etc.
execution of the scheme or work Unless exempted by Government by
entrusted to the State general or special orders, services shall
Government such as expenditure not be rendered to any foreign
on the construction or Government or non-Government body or
maintenance of National institution or to a separate fund
Highways etc., will be adjusted constituted as such except on payment.
direct in the accounts of the Rule 119 Recoveries of expenditure for services
Central Government under the rendered to non-Government parties.
relevant Head of Account. The Recoveries of expenditure for services
question of including the rendered or supplies made to non-
estimates in this regard in the Government parties or other
Budget of the State Governments Governments (including local funds and
and subjecting them to the vote Governments outside India), shall in all
of the State Legislature will not cases, be classified as receipts of the
arise. The expenditure will be Government rendering such services.
adjusted under the Head “8658 – Rule 120 Recoveries of expenditure for services
Suspense Accounts –PAO rendered as an agent. When a
Suspense” in the Remittance Government undertakes a service merely
Section of the State Accounts in as an agent of a private body, the entire
the first instance pending their cost of the service shall be recovered
eventual clearance in from that body so that the net cost to
accordance with the prescribed Government is nil. The recoveries shall
procedure. be taken as reduction of expenditure.
Note: In the converse case relating to the Explanation: The term ‘recovery’ is used
entrustment of a State function to the in these rules to denote repayment of, or
Central Government under Article258-A payment by non-Government parties or
of the Constitution, a procedure similar to other Governments towards charges
that indicated in the Rule 116 above shall initially incurred and classified by a
be followed. The extra cost on staff and Central Government Department in the
other contingent expenditure, etc., will account, as final expenditure by debit to
accordingly have to be provided in the a Revenue or Capital Head of Account.
Budget of the Central Government in the Recoveries towards establishment
usual manner and recovery made in charges, tools and plants, fees for
lumpsum from the State Government procurement of inspection of stores or
concerned. The other expenditure on both etc., effected at percentage rates or
execution of the work proper should be otherwise, are some examples.
debited to the State Government Rule 121 Payments to outside body or fund to
concerned directly and the question of be through grant-in-aid. Any relief in
obtaining a vote of the Parliament for the respect of payment for services rendered
same will not arise. or supplies made to any outside body or
Rule 117 Crucial date for closure of Inter- fund shall ordinarily be given through a
Governmental adjustments. Inter- grant-in-aid rather than by remission of
Governmental adjustments can be dues.
carried out upto the 10th of April or the Rule 122 Charges relating to the maintenance
date as specified by office of Controller and demarcations and disputes over
General of Accounts in consultation with boundaries. The incidence of charges
Reserve Bank of India from time to relating to the maintenance and
time[1A] on which date the books of the demarcations and disputes over
Reserve Bank are closed for the month of boundaries between India and a
March. Every endeavour must, foreigncountry is regulated by the
following principles;
1A
(i) Maintenance – Half the
Inserted vide DoE ID No. TA-2-03001/(03)/1/2022-TA-
II(e10997)/52 dated 18.01.2024.
maintenance charges will be

27
borne by the Central payments. For purposes of inter-
Government, the other half being Departmental payments, the
recovered, as far as practicable, Departments of a Government shall be
from the foreign country, failing divided into service Departments and
which the foreign country’s share commercial departments according to the
will also be borne by the Central following principles: -
Government. (i) Service Departments-These are
(ii) Demarcation and Disputes – constituted for the discharge of
Charges relating to demarcation those functions which either -
of boundaries and boundary (a) Are inseparable from and
disputes will be borne by the form part of the idea of
Central Government under Entry Government e.g.
10 of the Union List, subject to Departments of
such recovery as shall be made Administration of Justice,
from the Foreign Country. Jails, Police, Education,
(iii) Where streams or other Medical, Public Health,
watercourses form the Forest, Defence; or
boundaries and where the (b) Are necessary to, and form
ordinary principle of median line part of, the general conduct
applies, the Government of the business of
concerned (i.e., Foreign Country Government e.g.
or India) will bear the cost of Departments of Survey,
maintenance of the boundary line Government Printing,
on its side. Where a separate set Stationery, Public Works
of survey marks is maintained by (Building and Roads
each of the two Governments on Branch), Central Purchase
its side, the cost of maintenance Organisation (Director-
of the survey marks shall be General of Supplies and
borne by the Government Disposals, New Delhi).
concerned. (ii) Commercial Departments or
Exception: Undertakings.- These are
(a) The arrangement in (i) established mainly for the
above in its application to purposes of rendering services or
Nepal will be subject to providing supplies, of certain
special arrangements special kinds, on payment for the
worked out in consultation services rendered or for the
with the Nepal Government. articles supplied. They perform
(b) The share of the Bhutan functions, which are not
Government for necessarily governmental
maintenance and functions. They are required to
demarcation of and disputes work to a financial result
over boundaries will be determined through accounts
borne by the Central maintained on commercial
Government for the present principles.
Rule 125 Period for preferment of claims. All
VIII. INTER-DEPARTMENTAL claims shall ordinarily be preferred
ADJUSTMENTS between Departments, both commercial
and non-commercial of the Central
Rule 123 Inter-Departmental Adjustments. Save Government, within the same financial
as expressly provided by any general or year and not beyond three years from the
special orders, a Service Department date of transaction. This limitation,
shall not charge other Departments for however, may be waived in specific
services rendered or supplies made cases by mutual agreement between the
which falls within the class of duties for departments concerned.
which the former Department is Rule 126 Procedure for settlement of inter-
constituted. However, a commercial departmental adjustments. The
Department or undertaking shall settlement of inter- departmental
ordinarily charge and be charged for any adjustments shall be regulated by the
supplies made and services rendered to, directions contained in Chapter 4 of
or by, other departments of Government. Government Accounting Rules, 1990.
Rule 124 Principles for division of Departments Rule 127 Inter-departmental and other
for purposes of inter-departmental adjustments to be made in the account

28
year. Under the directions contained in Account etc. Recovery actually effected,
the Account Code for Accountants irrespective of the year to which it relates
General, Inter-departmental and other shall be adjusted in accounts in the
adjustments are not to be made in the schedule of recovery to be attached to
accounts of the past year, if they could the Appropriation Account of the year in
not have been reasonably anticipated in which the recovery is affected.
time for funds being obtained from the
proper authority. In all cases, where the Rule 128 Adjustment of Pensionary Charges of
adjustment could have reasonably been certain Commercial Departments.
anticipated as, for example, recurring Except as otherwise provided, the
payments to another Government or pensionary liability of commercial
department and payments which, though departments and undertakings, for which
not of fixed amount, are of a fixed pro forma commercial accounts are
character, etc., the Accounts Officer will maintained, shall be assessed on a
automatically make the adjustment in the contribution basis at such rates as may
accounts before they are finally closed. be fixed by Government from time to time.
The onus of proving that the adjustments In the case of departments and
could not have been reasonably undertakings, for which no regular
anticipated should lie with the Controlling commercial accounts are maintained
Officer. either within or outside the regular
As between different Departments of the Government accounts but which are
same Government, the recoveries allowed to charge for their products or
effected for services rendered shall be services rendered, the pensionary liability
classified as deductions from the gross shall be taken into account in the
expenditure. However, recoveries made estimate of overhead charges and
by a Commercial Department, e.g., manufacturing costs for the purpose of
Railways, Posts or a departmental calculating the issue price of goods
commercial undertaking in respect of manufactured or fees for services
services rendered in pursuance of the rendered. The calculation shall be made
functions for which the Commercial at rates prescribed for the purpose by
Department is constituted shall be treated Government.
as receipts of the Department but where NOTE: The Railways, Posts and Defence
it acts as an agent for the discharge of Departments are regarded as separate
functions not germane to the essential Governments for the purpose of
purpose of the Department, the adjustment of pensionary charges.
recoveries shall be taken as reduction of Rule 129 Pensionary liability in the case of
expenditure. Government Departments / Undertakings
Exception-Recoveries of fees for declared as commercial. In the case of
purchase, inspection, etc., effected by the Government Departments and
Central Purchase Organizations of Undertakings declared as commercial,
Government of India, are treated as adjustment of Pensionary liability shall be
receipts of the Department concerned. made in the regular accounts by charging
NOTE 1.-The term ‘recovery’ is used in the average of the percentage for 15th
this rule to denote repayment of/or year of service based on the rates of
payment by one Department of the same monthly contribution of pension as
Government towards charges initially prescribed in the appropriate order
incurred and classified by another issued from time to time under Appendix-
Department in its accounts as final II of Fundamental and Supplementary
expenditure by debit to a Revenue or Rules.
Capital Head of Account. Recoveries
towards establishment charges, tools and
plants, fees for procurement or inspection
of stores or both, etc., effected at
percentage rates or otherwise, are some
examples.
NOTE 2.-Recoveries effected from
another Department of the same
Government which are to be classified as
deduction from the gross expenditure,
shall be shown in the relevant Demand
for Grant as “below the line” recovery
under the appropriate Major Head of

29
Ch.-5 WORKS
Rule 130 Original works means all new
constructions, site preparation,
additions and alterations to existing
works, special repairs to newly
purchased or previously abandoned
buildings or structures, including
remodeling or replacement.
Minor works mean works which add
capital value to existing assets but
do not create new assets.
Repair works means works
undertaken to maintain building and
fixtures. Works will also include
services or goods incidental or
consequential to the original or
repair works.
Rule 131 Administrative control of works
includes:
(i) assumption of full responsibility
for construction, maintenance
and upkeep;
(ii) proper utilization of buildings
and allied works;
(iii) provision of funds for execution
of these functions.
Rule 132 Powers to sanction works. The
powers delegated to various
subordinate authorities to accord
administrative approval, sanction
expenditure and re-appropriate
funds for works are regulated by the
Delegation of Financial Powers
Rules, and other orders contained in
the respective departmental
regulations.
Rule 133 (1) A Ministry or Department at its
discretion may directly execute
repair works estimated to cost up to
[Rupees Sixty Lakhs]3 after following
due procedure indicated in Rule 139,
159 & 160.
Rule 133 (2) A Ministry or Department may, at
its discretion, assign repair works
estimated to cost above [Rupees
Sixty Lakhs]4 and original/ minor
works of any value to any Public
Works Organisation (PWO) such as
Central Public Works Department
(CPWD), State Public Works
Department, others Central
Government organisations
authorised to carry out civil or

3 4
Amended vide Department of Expenditure (DoE), Ministry Amended vide DoE OM No. F.1/3/2024-PPD dated
of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024. 10.07.2024.

30
electrical works such as Military Department of Expenditure to decide
Engineering Service (MES), Border on further extension of these
Roads Organisation (BRO), etc. or powers.]6
Ministry/ Department's construction Rule 134 Work under the administrative
wings of Ministries of Railways, control of the Public Works
Defence, Environment & Forests, Departments. Works not specifically
Information & Broadcasting and allotted to any Ministry or
Departments of Posts, and Space Department shall be included in the
etc. Grants for Civil Works to be
Rule 133 (3) As an alternative to 133(2), a administered by Central Public Works
Ministry or Department may award Department. No such work may be
repair works estimated to cost above financed partly from funds provided
[Rupees Sixty Lakhs]5 and original in departmental budget and partly
works of any value to: from the budget for Civil works as
(i) any Public Sector Undertaking mentioned above.
set up by the Central or State Rule 135 (1) General Rules. Subject to the
Government to carry out civil or observance of these general rules,
electrical works or (including Rule 144) the initiation,
(ii) to any other Central/ State authorization and execution of works
Government organisation/ PSU allotted to a particular Ministry or
which may be notified by the Department shall be regulated by
Ministry of Housing and Urban detailed rules and orders contained in
Affairs (MoHUA) for such the respective departmental
purpose after evaluating their regulations and by other special
financial strength and technical orders applicable to them.
competence. Rule 135 (2) Ministry or Department shall put
For the award of work under this sub- in place, as far as possible,
rule, the Ministry/ Department shall empowered project teams for all
ensure competition among such large value projects and these teams
PSUs/ Organisations. This should be tasked only with project
competition shall be essentially on execution and not given other
the lump sum service charges to be operational duties.
claimed for execution of work. Rule 136 (1) No works shall be commenced or
In exceptional cases, for award of liability incurred in connection with it
work under (i) and (ii) above, on until:
nomination basis, the conditions (i) administrative approval has
contained in Rule 194 would apply. been obtained from the
The work under these circumstances appropriate authority in each
shall also be awarded only on the case.
basis of lump sum service charge (ii) sanction to incur expenditure
[Note: has been obtained from the
(i) Scientific Ministries/ Departments competent authority.
can assign repair Works estimated to (iii) a properly detailed design has
cost up to Rs 5 crore on nomination been sanctioned; while
basis even in normal cases only to the designing the projects etc,
organizations specified in this sub- principles of Life Cycle cost may
rule of GFRs. also be considered.
(ii) This special provision will be (iv) estimates containing the
applicable upto 31.03.2025. detailed specifications and
Thereafter review will be made by quantities of various items have

5 and Development Organisation, Indian Council of

Amended vide DoE OM No. F.1/3/2024-PPD dated
10.07.2024. Agricultural Research (ICAR), including its affiliated
6
Inserted vide DoE OM No. F.20/42/2021-PPD dated institutions and Universities, Department of Health
20.05.2024. The Scientific Ministries/ Departments/ Research (DHR), including Indian Council of Medical
Organization of Government of India are Department Research, Educational and Research Institutes
of Science and Technology, Department of Bio- conducting post-graduate/ doctoral level courses or
technology, Department of Scientific & Industrial research, under any Ministry/ Department.
Research, Department of Atomic Energy, Department
of Space, Ministry of Earth Sciences, Defence Research

31
been prepared on the basis of the detailed procedure relating
(i)
the Schedule of Rates to expenditure on such works
maintained by CPWD or other shall be prescribed by
Public Works Organisations and departmental regulations
sanctioned. framed in consultation with the
(v) funds to cover the charge Accounts Officer, generally
during the year have been based on the procedures and the
provided by competent principles underlying the
authority. financial and accounting rules
(vi) tenders invited and processed prescribed for similar works
in accordance with rules. carried out by the Central Public
(vii) a Work Order issued. Works Department (CPWD);
Rule 136 (2) On grounds of urgency or (ii) preparation of detailed design
otherwise, if it becomes necessary to and estimates shall precede any
carry out a work or incur a liability sanction for works;
under circumstances when the (iii) no work shall be undertaken
provisions set out under sub rule 1 before Issue of Administrative
of rule 136 cannot be complied with, Approval and Expenditure
the concerned executive officer may Sanction by the competent
do so on his own judgement and Authority on the basis of
responsibility. Simultaneously, he estimates framed;
should initiate action to obtain (iv) Open tenders will be called for
approval from the competent works costing [Rs. Ten lakh to
authority and also to intimate the Rs. Sixty lakh]7;
concerned Accounts Officer. (v) limited tenders will be called for
Rule 136 (3) Any development of a project works costing less than [Rupees
considered necessary while a work is Ten lakhs]8;
in progress, which is not contingent (vi) execution of Contract
on the execution of work as first Agreement or Award of work
sanctioned, shall have to be covered should be done before
by a supplementary estimate. commencement of the work;
Rule 137 For purpose of approval and (vii) final payment for work shall be
sanctions, a group of works which made only on the Personal
forms one project, shall be Certificate of the Officer-in-
considered as one work. The charge of execution of the work
necessity for obtaining approval or in the format given below:
sanction of higher authority to a "I Executing Officer of (Name of
project which consists of such a the Work), am personally
group of work should not be avoided satisfied that the work has been
because of the fact that the cost of executed as per the specifications
each particular work in the project is laid down in the Contract
within the powers of such approval Agreement and the workmanship
or sanction of a lower authority. This is up to the standards followed in
provision, however, shall not apply in the Industry."
case of works of similar nature which Rule 140 For original/minor works and repair
are independent of each other. works entrusted as per Rule 133(2)
Rule 138 Any anticipated or actual savings or Rule 133(3), the Administrative
from a sanctioned estimate for a Approval and Expenditure Sanction
definite project, shall not, without shall be accorded and funds allotted
special authority, be applied to carry by the concerned authority under
out additional work not these rules and in accordance with
contemplated in the original project. the Delegation of Financial Power
Rule 139 Procedure for Execution of Rules. The Public Works
Works. The broad procedure to be Organisation or the Public Sector
followed by a Ministry or Department Undertaking or any Organisation
for execution of works under its own allotted work shall then execute the
arrangements shall be as under :- work entrusted to it in accordance

7 8
Amended vide Department of Expenditure (DoE), Ministry Amended vide Department of Expenditure (DoE), Ministry
of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024. of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024.

32
with the rules and procedures
prescribed in that organisation. A
Memorandum of Understanding
(MoU) may be drawn with Public
Works Organisation or the Public
Sector Undertaking for proper
execution of work.
Rule 141 Review of Projects. After a project
costing Rs. 100 crore or above is
approved, the Administrative
Ministry or Department will set up a
Review Committee consisting of a
representative each from the
Administrative Ministry, Finance
(Internal Finance Wing) and the
Executing Agency to review the
progress of the work. The Review
Committee shall have the powers to
accept variation within 10% of the
approved estimates. For works
costing less than Rs. 100 crore, it will
be at the discretion of the
Administrative Ministry/Department
to set up a suitable mechanism for
review and acceptance of variation
within 10% of the approved
estimates.

33
Ch. -6 - PROCUREMENT OF GOODS AND matter of procurement to the
SERVICES extent practicable should -
PROCUREMENT OF GOODS a. be objective, functional,
Rule 142 This chapter contains the general generic and measurable and
rules applicable to all Ministries or specify technical, qualitative
Departments, regarding and performance
procurement of goods required for characteristics.
use in the public service. Detailed b. not indicate a requirement
instructions relating to procurement for a particular trade mark,
of goods may be issued by the trade name or brand.
procuring departments broadly in (ii) the specifications in terms of
conformity with the general rules quality, type etc., as also
contained in this Chapter. quantity of goods to be
Rule 143 Definition of Goods. The term procured, should be clearly
'goods' used in this chapter includes spelt out keeping in view the
all articles, material, commodity, specific needs of the procuring
livestock, furniture, fixtures, raw organisations. The
material, spares, instruments, specifications so worked out
machinery, equipment, industrial should meet the basic needs of
plant, vehicles, aircraft, ships, the organisation without
medicines, railway rolling stock, including superfluous and non-
assemblies, subassemblies, essential features, which may
accessories, a group of machineries result in unwarranted
comprising of an integrated expenditure.
production process or such other (iii) Where applicable, the technical
category of goods or intangible specifications shall, to the
products like software, technology extent practicable, be based on
transfer, licenses, patents or other the national technical
intellectual properties purchased or regulations or recognized
otherwise acquired for the use of national standards or building
Government but excludes books, codes, wherever such standards
publications, periodicals, etc. for a exist, and in their absence, be
library. based on the relevant
The term 'goods' also includes works international standards. In case
and services which are incidental or of Government of India funded
consequential to the supply of such projects abroad, the technical
goods, such as, transportation, specifications may be framed
insurance, installation, based on requirements and
commissioning, training and standards of the host
maintenance. beneficiary Government, where
Rule 144 Fundamental principles of such standards exist.
public buying (for all Provided that a procuring entity
procurements including may, for reasons to be recorded
procurement of works). Every in writing, adopt any other
authority delegated with the technical specification.
financial powers of procuring goods (iv) Care should also be taken to
in public interest shall have the avoid purchasing quantities in
responsibility and accountability to excess of requirement to avoid
bring efficiency, economy, and inventory carrying costs.
transparency in matters relating to (v) offers should be invited
public procurement and for fair and following a fair, transparent and
equitable treatment of suppliers and reasonable procedure.
promotion of competition in public (vi) the procuring authority should
procurement. be satisfied that the selected
The procedure to be followed in offer adequately meets the
making public procurement must requirement in all respects.
conform to the following yardsticks (vii) the procuring authority should
:- satisfy itself that the price of the
(i) The description of the subject selected offer is reasonable and

34
consistent with the quality operations shall be regulated by
required. special rules and orders issued by the
(viii) at each stage of Government on this behalf from time
procurement the concerned to time.
procuring authority must place Rule 147 Powers for procurement of
on record, in precise terms, the goods. [The Ministries or
considerations which weighed Departments have been delegated
with it while taking the full powers to make their own
procurement decision. arrangements for procurement of
(ix) a complete schedule of goods and services, that are not
procurement cycle from date of available on GeM. Common use
issuing the tender to date of Goods and Services available on GeM
issuing the contract should be are required to be procured
published when the tender is mandatorily through GeM as per Rule
issued. 149.]10
(x) All Ministries/Departments shall Rule 148 Deleted11
prepare Annual Procurement Rule 149. Government e-Market place
Plan before the commencement (GeM). Government of India has established
of the year and the same should the Government e-Marketplace (GeM) for
also be placed on their website. common use Goods and Services. GeM SPV will
(xi) [Notwithstanding anything ensure adequate publicity including periodic
contained in these Rules, advertisement of the items to be procured
Department of Expenditure through GeM for the prospective suppliers. The
may, by order in writing, impose Procurement of Goods and Services by Ministries
restrictions, including prior or Departments will be mandatory for Goods or
registration and/ or screening, Services available on GeM. The credentials of
on procurement from bidders suppliers on GeM shall be certified by GeM SPV.
from, or bidders having The procuring authorities will certify the
commercial arrangements with reasonability of rates. The GeM portal shall be
an entity from, a country or utilized by the Government buyers for direct on-
countries, or a class of line purchases as under:
countries, on grounds of (i) Up to [Rs.50,000/-]12 through any of the
defence of India, or matters available suppliers on the GeM, meeting
directly or indirectly related the requisite quality, specification and
thereto including national delivery period.
security; no procurement shall Note: In case of automobiles,
be made in violation of such procurement under this sub-rule is
restrictions.]9 permitted without any ceiling limit.
Rule 145 Authorities competent to (ii) Above [Rs.50,000/- and up to
purchase goods. An authority Rs.10,00,000/-]13 through the GeM
which is competent to incur Seller having lowest price amongst the
expenditure may sanction the available sellers of at least three
purchase of goods required for use in different manufacturers, on GeM,
public service in accordance with meeting the requisite quality,
provisions in the Delegation of specification and delivery period. The
Financial Powers Rules, following the tools for online bidding and online
general procedure contained in the reverse auction available on GeM can be
following rules. used by the Buyer even for
Rule 146 Procurement of goods required procurements less than [Rs
on mobilisation Procurement of 10,00,000]14.
goods required on mobilisation and/ (iii) Above [Rs.10,00,000/-]15 through the
or during the continuance of Military supplier having lowest price meeting the

9
Amended vide Department of Expenditure (DoE), Ministry of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024.
of Finance (MoF) OM No. F.7/10/2021-PPD dated 13
Amended vide Department of Expenditure (DoE), Ministry
23.02.2023. of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024.
10
Amended vide DoE OM No. F.1/26/2018-PPD dated 14
Amended vide Department of Expenditure (DoE), Ministry
02.04.2019. of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024.
11
Deleted vide DoE OM No. F.1/26/2018-PPD dated 15
Amended vide Department of Expenditure (DoE), Ministry
02.04.2019.
12
Amended vide Department of Expenditure (DoE), Ministry of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024.

35
requisite quality, specification and (ii) Credentials, manufacturing capability,
delivery period after mandatorily quality control systems, past
obtaining bids, using online bidding or performance, after-sales service,
reverse auction tool provided on GeM. financial background etc. of the
(iv) The invitation for the online e- supplier(s) should be carefully verified
bidding/reverse auction will be available before registration.
to all the existing Sellers or other Sellers ( i i i ) The supplier(s) will be registered for a
registered on the portal and who have fixed period (between 1 to 3 years)
offered their goods/services under the depending on the nature of the goods.
particular product/service category, as At the end of this period, the registered
per terms and conditions of GeM. supplier(s) willing to continue with
(v) The above mentioned monetary ceiling registration are to apply afresh for
is applicable only for purchases made renewal of registration. New supplier(s)
through GeM. For purchases, if any, may also be considered for registration
outside GeM, relevant GFR Rules shall at anytime, provided they fulfill all the
apply. required conditions.
(vi) The Ministries/Departments shall work ( i v ) Performance and conduct of every
out their procurement requirements of registered supplier is to be watched by
Goods and Services on either "OPEX" the concerned Ministry or Department.
model or "CAPEX" model as per their The registered supplier(s) are liable to
requirement/ suitability at the time of be removed from the list of approved
preparation of Budget Estimates (BE) suppliers if they fail to abide by the
and shall project their Annual terms and conditions of the registration
Procurement Plan of goods and services or fail to supply the goods on time or
on GeM portal within 30 days of Budget supply substandard goods or make any
approval. false declaration to any Government
(vii) The Government Buyers may ascertain agency or for any ground which, in the
the reasonableness of prices before opinion of the Government, is not in
placement of order using the Business public interest.
Analytics (BA) tools available on GeM ( v ) [The list of registered suppliers for the
including the Last Purchase Price on subject matter of procurement be
GeM, Department's own Last Purchase exhibited on websites of the Procuring
Price etc. Entity/ their e-Procurement portals.]17
(viii) A demand for goods shall not be divided Rule 151 Debarment from bidding.
into small quantities to make piecemeal (i) A bidder shall be debarred if he has
purchases to avoid procurement been convicted of an offence—
through L-1 Buying / bidding / reverse ( a ) under the Prevention of
auction on GeM or the necessity of Corruption Act, 1988; or
obtaining the sanction of higher ( b ) the Indian Penal Code or any other
authorities required with reference to law for the time being in force, for
the estimated value of the total causing any loss of life or property
demand. or causing a threat to public health
Rule 150 Registration of Suppliers as part of execution of a public
(i) [For goods and services not available on procurement contract.
GeM, Head of Ministry/ Department may (ii) A bidder debarred under sub-section
also register suppliers of goods and (i) or any successor of the bidder shall
services which are specifically required not be eligible to participate in a
by that Department or Office, procurement process of any
periodically. Registration of the supplier procuring entity for a period not
should be done following a fair, exceeding three years commencing
transparent and reasonable procedure from the date of debarment.
and after giving due publicity. Such Department of Expenditure (DoE) will
registered suppliers should be boarded maintain such list which will also be
on GeM as and when the item or service displayed on the Central Public
gets listed on GeM.]16 Procurement Portal.18

16
Amended vide DoE OM No. F.1/26/2018-PPD dated 18
Amended vide DoE OM No. F.1/20/2018-PPD dated
02.04.2019. 02.11.2021.
17
Amended vide DoE OM No. F.1/26/2018-PPD dated
02.04.2019.

36
(iii) A procuring entity may debar a bidder Companies (PC), Corporations
or any of its successors, from etc. including Weavers having
participating in any procurement Pehchan Cards.]20
process undertaken by it, for a period (ii) Ministry of Micro, Small and
not exceeding two years, if it Medium Enterprises (MSME)
determines that the bidder has have notified procurement
breached the code of integrity. The policy under section 11 of the
Ministry/Department will maintain Micro, Small and Medium
such list which will also be displayed Enterprises Development Ad,
on their website. 2006.
(iv) The bidder shall not be debarred unless (iii) The Central Government may,
such bidder has been given a by notification, provide for
reasonable opportunity to represent mandatory procurement of any
against such debarment goods or services from any
Rule 152 Enlistment of Indian Agents: category of bidders, or provide
[Ministries / Departments if they so for preference to bidders on the
require, may enlist Indian agents, grounds of promotion of locally
who desire to quote directly on manufactured goods or locally
behalf of their foreign principals.]19 provided services.
Ru1e 153 Reserved Items and other Rule 154 Purchase of goods without
Purchase/ Price Preference quotation
Policy. Purchase of goods upto the value of
(i) [The Central Government, [Rs. 50,000 (Rupees fifty thousand)
through administrative only]21 on each occasion may be
instructions, has reserved all made without inviting quotations or
items of hand spun and hand- bids on the basis of a certificate to
woven textiles (khadi goods) for be recorded by the competent
exclusive purchase from Khadi authority in the following format.
Village Industries commission "I„ am personally satisfied that these
(KVIC). Of all items of textiles goods purchased are of the requisite
required by Central quality and specification and have
Government departments, it been purchased from a reliable
shall be mandatory to make supplier at a reasonable price."
procurement of at least 20% Rule 155 Purchase of goods by Purchase
from amongst items of Committee. [In case a certain item
handloom origin, for exclusive is not available on the GeM portal,]22
purchase from KVIC and/ or Purchase of goods costing above
Handloom Clusters such as Co- [Rs.50,000 (Rupees Fifty thousand
Operative Societies, Self Help only) and upto Rs.5,00,000/- (Rupees
Group (SHG) Federations, Joint Five lakh only)]23 on each occasion
Liability Group (JLG), Producer may be made on the

19
Amended vide DoE OM No. F.26/2/2016-PPD dated Marketplace (GeM) as stipulated in this Department OM No.
25.07.2017. 6/1/2018-PPD dated 19.01.2018.
20
Amended vide DoE OM No. F.10/2/2019-PPD(Pt.) dated 22
Inserted vide DoE OM No. F.1.26/2018-PPD dated
17.02.2020. 02.04.2019.
21
Replace with purchase of goods upto the value of Rs. 23
Replace with purchase of goods costing above Rs.
1,00,000/- (Rupees one lakh) only on each occasion in case 1,00,000/- (Rupees one lakh) and upto Rs. 10,00,000/-
of Scientific Ministries/ Departments/ Organization of (Rupees ten lakh) in case of Scientific Ministries/
Government of India which are Department of Science and Departments/ Organization of Government of India which
Technology, Department of Bio-technology, Department of are Department of Science and Technology, Department of
Scientific & Industrial Research, Department of Atomic Bio-technology, Department of Scientific & Industrial
Energy, Department of Space, Ministry of Earth Sciences, Research, Department of Atomic Energy, Department of
Defence Research and Development Organisation, Indian Space, Ministry of Earth Sciences, Defence Research and
Council of Agricultural Research (ICAR), including its Development Organisation, Indian Council of Agricultural
affiliated institutions and Universities, Department of Health Research (ICAR), including its affiliated institutions and
Research (DHR), including Indian Council of Medical Universities, Department of Health Research (DHR),
Research, Educational and Research Institutes conducting including Indian Council of Medical Research, Educational
post-graduate/ doctoral level courses or research, under any and Research Institutes conducting post-graduate/ doctoral
Ministry/ Department, notified vide Department of level courses or research, under any Ministry/ Department,
Expenditure OM No. F.20/42/2021-PPD dated 20.05.2024. notified vide Department of Expenditure OM No.
Note: These powers can be used for procurement of any F.20/42/2021-PPD dated 20.05.2024. Note: These powers
item. Further, these powers are to be used only when the are to be used only when the required goods are not
required goods are not available on Government e- available on Government e-Marketplace (GeM) as stipulated

37
recommendations of a duly Central Public Procurement
constituted Local Purchase Portal (CPPP).
Committee consisting of three (ii) Individual cases where
members of an appropriate level as confidentiality is required, for
decided by the Head of the reasons of national security,
Department. The committee will would be exempted from the
survey the market to ascertain the mandatory e-publishing
reasonableness of rate, quality and requirement. The decision to
specifications and identify the exempt any case on the said
appropriate supplier. Before grounds should be approved by
recommending placement of the the Secretary of the Ministry/
purchase order, the members of the Department with the
committee will jointly record a concurrence of the concerned
certificate as under: Financial Advisor. In the case of
"Certified that we, members of the Autonomous Bodies and
purchase committee are jointly and Statutory Bodies' approval of
individually satisfied that the goods the Head of the Body with the
recommended for purchase are of the concurrence of the Head of the
requisite specification and quality, Finance should be obtained in
priced at the prevailing market rate each such case. Statistical
and the supplier recommended is information on the number of
reliable and competent to supply the cases in which exemption was
goods in question, and it is not granted and the value of the
debarred by Department of concerned contract should be
Expenditure24 or Ministry/ intimated on a Quarterly basis
Department concerned." to the Ministry of Finance,
Rule 156 Deleted.25 Department of Expenditure.
Rule 157 A demand for goods should not be (iii) The above instructions apply to
divided into small quantities to make all Tender Enquiries, Requests
piecemeal purchases to avoid the for Proposals, Requests for
necessity of obtaining the sanction of Expressions of Interest, Notice
higher authority required with for pre Qualification/
reference to the estimated value of Registration or any other notice
the total demand inviting bids or proposals in any
Rule 158 Purchase of goods by obtaining form whether they are
bids. Except in cases covered under advertised, issued to limited
Rule 154 and 155, Ministries or number of parties or to a single
Departments shall procure goods party.
under the powers referred to in Rule (iv) Deleted.26
140 above by following the standard (v) These instructions would not
method of obtaining bids in: apply to procurements made in
(i) Advertised Tender Enquiry terms of provisions of Rules 154
(ii) Limited Tender Enquiry (Purchase of goods without
( i i i ) Two-Stage Bidding quotations) or 155 (Purchase of
( i v ) Single Tender Enquiry goods by purchase committee)
(v) Electronic Reverse Auctions of General Financial Rules.
Rule 159 E-Publishing Rule 160 E -Procurement
(i) It is mandatory for all Ministries/ (i) It is mandatory for Ministries/
Departments of the Central Departments to receive all bids
Government, their attached and through e-procurement portals
Subordinate Offices and in respect of all procurements.
Autonomous /Statutory Bodies (ii) Ministries/ Departments which
to publish their tender do not have a large volume of
enquiries, corrigenda thereon procurement or carry out
and details of bid awards on the procurements required only for

in this Department OM No. 6/1/2018-PPD dated 19.01.2018. 02.04.2019.

24 26
Deleted vide DoE OM No. F.1/26/2018-PPD dated
Amended vide DoE OM No. F.1/20/2018-PPD dated
02.11.2021. 02.04.2019.
25
Deleted vide DoE OM No. F.1/26/2018-PPD dated

38
day-to-day running of offices (iv) [Global Tender Enquiry (GTE):
and also have not initiated e- (a) Where the Ministry or
procurement through any other Department feels that the
solution provided so far, may goods of the required
use e-procurement solution quality, specifications etc.,
developed by NIC. Other may not be available in the
Ministries/ Departments may country and it is necessary
either use e-procurement to also look for suitable
solution developed by NIC or competitive offers from
engage any other service abroad, the Ministry or
provider following due process. Department may send
(iii) Deleted.27 copies of the tender notice
(iv) In individual case where to the Indian Embassies
national security and strategic abroad as well as to the
considerations demands Foreign Embassies in India.
confidentiality, Ministries/ The selection of embassies
Departments may exempt such will depend on the
cases from e-procurement after possibility of availability of
seeking approval of concerned the required goods in such
Secretary and with concurrence countries. In such cases e-
of Financial Advisers. procurement as per Rule
(v) In case of tenders floated by 160 may not be insisted.
Indian Missions Abroad, (b) No Global Tender Enquiry
Competent Authority to decide (GTE), however shall be
the tender, may exempt such invited for tenders up to Rs
case from e-procurement. 200 crore or such limit as
Rule 161 Advertised Tender Enquiry may be prescribed by the
(i) Subject to exceptions Department of Expenditure
incorporated under Rule 154, from time to time. Provided
155, 162 and 166, invitation to that for tenders below such
tenders by advertisement limit, in exceptional cases,
should be used for procurement where the Ministry or
of goods of estimated value of Department feels that
[Rs. 50 lakhs (Rupees Fifty there are special reasons
Lakh)28 and above. for GTE, it may record its
Advertisement in such cases detailed justification and
should be given on GeM as well seek prior approval for
as on GeM- Central Public relaxation to the above rule
Procurement Portal (CPPP). An from the Competent
organisation having its own Authority specified by the
website should also publish all Department of
its advertised tender enquiries Expenditure.]29
on the website. (v) In order to promote wider
(ii) The organisation should also participation and ease of
post the complete bidding bidding, no cost of tender
document in its website and on document may be charged for
CPPP to enable prospective the tender documents
bidders to make use of the downloaded by the bidders.
document by downloading from (vi) Ordinarily, the minimum time to
the web site. be allowed for submission of
(iii) The advertisements for bids should be three weeks from
invitation of tenders should give the date of publication of the
the complete web address from tender notice or availability of
where the bidding documents the bidding document for sale,
can be downloaded. whichever is later. Where the

27
Deleted vide DoE OM No. F.1/26/2018-PPD dated
02.04.2019. 29
Amended vide DoE OM No. F.12/17/2019-PPD dated
28
Amended vide Department of Expenditure (DoE), Ministry 15.05.2020.
of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024

39
Department also contemplates Department should also
obtaining bids from abroad, the put on record the nature of
minimum period should be kept the urgency and reasons
as four weeks for both domestic why the procurement could
and foreign bidders. not be anticipated.
Rule 162 Limited Tender Enquiry (b) There are sufficient
(i) This method may be adopted reasons, to be recorded in
when estimated value of the writing by the competent
goods to be procured is up to authority, indicating that it
[Rupees Fifty Lakhs]30. Copies will not be in public interest
of the bidding document should to procure the goods
be sent directly by speed through advertised tender
post/registered post/courier/ e- enquiry.
mail to firms which are borne on (c) The sources of supply are
the list of registered suppliers definitely known and
for the goods in question as possibility of fresh
referred under Rule 150 above. source(s) beyond those
The number of supplier firms in being tapped is remote.
Limited Tender Enquiry should (iv) Sufficient time should be
be more than three. Efforts allowed for submission of bids in
should be made to identify a Limited Tender Enquiry cases.
higher number of approved Rule 163 Two bid system (simultaneous
suppliers to obtain more receipt of separate technical and
responsive bids on competitive financial bids): For purchasing high
basis. value plant, machinery etc. of a
Further, an organisation should complex and technical nature, bids
publish its limited tender may be obtained in two parts
enquiries on [GeM as well as on asunder:
GeM- Central Public (i) Technical bid consisting of all
Procurement Portal (CPPP). An technical details along with
organisation having its own commercial terms and
website should also publish all conditions; and
its advertised tender enquiries (ii) Financial bid indicating item-
on the website]31. wise price for the items
(ii) The unsolicited bids should not mentioned in the technical
be accepted. However, bid.
Ministries/ Departments should The technical bid and the financial bid
evolve a system by which should be sealed by the bidder in
interested firms can register separate covers duly super-scribed
and bid in next round of and both these sealed covers are to
tendering. be put in a bigger cover which should
(iii) Purchase through Limited also be sealed and duly super-
Tender Enquiry may be adopted scribed. The technical bids are to be
even where the estimated value opened by the purchasing Ministry or
of the procurement is more than Department at the first instance and
[Rupees Fifty Lakhs]32, in the evaluated by a competent committee
following circumstances. or authority. At the second stage
(a) The competent authority in financial bids of only these technically
the Ministry or Department acceptable offers should be opened
certifies that the demand is after intimating them the date and
urgent and any additional time of opening the financial bid for
expenditure involved by further evaluation and ranking before
not procuring through awarding the contract.
advertised tender enquiry Rule 164 Two-Stage Bidding (Obtain bids in
is justified in view of two stages with receipt of financial
urgency. The Ministry or bids after receipt and evaluation of

30 of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024

Amended vide Department of Expenditure (DoE), Ministry
32
of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024 Amended vide Department of Expenditure (DoE), Ministry
31 of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024
Amended vide Department of Expenditure (DoE), Ministry

40
technical bids) Department;
(i) Ministry/Department may (c) the committee may hold
procure the subject matter of discussions with the
procurement by the method of bidders and if any such
two-stage bidding, if discussion is held, equal
(a) it is not feasible to opportunity shall be given
formulate detailed to all bidders to participate
specifications or identify in the discussions;
specific characteristics for (d) in revising the relevant
the subject matter of terms and conditions of the
procurement, without procurement, the
receiving inputs regarding procuring entity shall not
its technical aspects from modify the fundamental
bidders; or nature of the procurement
(b) the character of the itself, but may add, amend
subject matter of or omit any specification of
procurement is subject to the subject matter of
rapid technological procurement or criterion
advances or market for evaluation;
fluctuations or both; or (e) in the second stage of the
(c) Ministry/Department seeks bidding process, the
to enter into a contract for procuring entity shall invite
the purpose of research, bids from all those bidders
experiment, study or whose bids at the first
development, except stage were not rejected, to
where the contract present final bid with bid
includes the production of prices in response to a
items in quantities revised set of terms and
sufficient to establish their conditions of the
commercial viability or to procurement;
recover research and (f) any bidder, invited to bid
development costs; or but not in a position to
(d) The bidder is expected to supply the subject matter
carry out a detailed survey of procurement due to
or investigation and modification in the
undertake a specifications or terms and
comprehensive conditions, may withdraw
assessment of risks, costs from the bidding
and obligations associated proceedings without
with the particular forfeiting any bid security
procurement. that he may have been
(ii) The procedure for two stage required to provide or
bidding shall include the being penalised in any
following, namely: way, by declaring his
(a) in the first stage of the intention to withdraw from
bidding process, the the procurement
Ministry/Department shall proceedings with adequate
invite bids through justification.
advertised tender Rule 165 Late Bids. In the case of advertised
containing the technical tender enquiry or limited tender
aspects and contractual enquiry, late bids (i.e. bids received
terms and conditions of the after the specified date and time for
proposed procurement receipt of bids) should not be
without a bid price; considered.
(b) all first stage bids, which Rule 166 Single Tender Enquiry.
are otherwise eligible, shall Procurement from a single source
be evaluated through an may be resorted to in the following
appropriate committee circumstances:
constituted by the Ministry/ (i) It is in the knowledge of the

41
user department that only a (b) There is a competitive
particular firm is the market of bidders
manufacturer of the required anticipated to be qualified
goods. to participate in the
(ii) In a case of emergency, the electronic reverse auction,
required goods are necessarily so that effective
to be purchased from a competition is ensured;
particular source and the (c) The criteria to be used by
reason for such decision is to be the procuring entity in
recorded and approval of determining the successful
competent authority obtained. bid are quantifiable and
(iii) For standardization of can be expressed in
machinery or spare parts to be monetary terms; and
compatible to the existing sets (iii) The procedure for electronic
of equipment (on the advice of reverse auction shall include the
a competent technical expert following, namely:
and approved by the competent (a) The procuring entity shall
authority), the required item is solicit bids through an
to be purchased only from a invitation to the electronic
selected firm reverse auction to be
Note: Proprietary Article Certificate in the published or
following form is to be provided by the communicated in
Ministry/ Department before procuring the accordance with the
goods from a single source under the provisions similar to e-
provision of sub-Rule 166 (i) and 166 (iii) as procurement; and
applicable. (b) The invitation shall, in
(i) The indented goods are manufactured addition to the information
by M/s ……………………….. as specified in e-
(ii) No other make or model is acceptable procurement, include
for the following reasons: details relating to access to
……………………………………………… and registration for the
(iii) Concurrence of finance wing to the auction, opening and
proposal vide: closing of the auction and
……………………………………….. Norms for conduct of the
(iv) Approval of the competent authority auction.
vide: Rule 168 Contents of Bidding Document
(Signature with date and All the terms, conditions, stipulations
designation of the indenting and information to be incorporated in
officer) the bidding document are to be
Rule 167 Electronic Reverse Auction shown in the appropriate chapters as
(i) Electronic Reverse Auction below:
means an online real-time Chapter-1: Instructions to Bidders.
purchasing technique utilised by Chapter-2: Conditions of Contract.
the procuring entity to select Chapter-3: Schedule of
the successful bid, which Requirements.
involves presentation by bidders Chapter-4: Specifications and
of successively more favourable allied Technical Details.
bids during a scheduled period Chapter-5: Price Schedule (to be
of time and automatic utilised by the bidders for quoting
evaluation of bids; their prices).
(ii) A procuring entity may choose Chapter-6: Contract Form.
to procure a subject matter of Chapter-7: Other Standard Forms, if
procurement by the electronic any, to be utilised by the purchaser
reverse auction method, if: and the bidders.
(a) It is feasible for the Rule 169 Maintenance Contract.
procuring entity to Depending on the cost and nature of
formulate a detailed the goods to be purchased, it may
description of the subject also be necessary to enter into
matter of the procurement; maintenance contract(s) of suitable

42
period either with the supplier of the the Commercial Banks or
goods or with any other competent payment online in an acceptable
firm, not necessarily the supplier of form, safeguarding the
the subject goods. Such purchaser's interest in all
maintenance contracts are especially respects. The bid security is
needed for sophisticated and costly normally to remain valid for a
equipment and machinery. It may, period of forty-five days beyond
however, be kept in mind that the the final bid validity period.
equipment or machinery is (ii) Bid securities of the
maintained free of charge by the unsuccessful bidders should be
supplier during its warranty period or returned to them at the earliest
such other extended periods as the after expiry of the final bid
contract terms may provide and the validity and latest on or before
paid maintenance should commence the 30th day after the award of
only thereafter. the contract.
Rule 170 Bid Security [However, in case of two packet
(i) To safeguard against a bidder's or two stage bidding, Bid
withdrawing or altering its bid securities of unsuccessful
during the bid validity period in bidders during first stage i.e.
the case of advertised or limited technical evaluation etc. should
tender enquiry, Bid Security be returned within 30 days of
(also known as Earnest Money) declaration of result of first
is to be obtained from the stage i.e. technical evaluation
bidders except Micro and Small etc.]36
Enterprises (MSEs) as defined in (iii) In place of a Bid security, the
MSE Procurement Policy issued Ministries/ Departments may
by Department of Micro, Small require Bidders to sign a Bid
and Medium Enterprises securing declaration accepting
(MSME) or are registered with that if they withdraw or modify
the Central Purchase their Bids during the period of
Organisation or the concerned validity, or if they are awarded
Ministry or Department [or the contract and they fail to sign
Startups as recognized by the contract, or to submit a
Department for Promotion of performance security before the
Industry and Internal Trade deadline defined in the request
(DPIIT)]33. The bidders should for bids document, they will be
be asked to furnish bid security suspended for the period of
along with their bids. Amount of time specified in the request for
bid security should ordinarily bids document from being
range between two percent to eligible to submit Bids for
five percent of the estimated contracts with the entity that
value of the goods to be invited the Bids.
procured. The amount of bid Rule 171 Performance Security
security should be determined (i) To ensure due performance of
accordingly by the Ministry or the contract, Performance
Department and indicated in the Security is to be obtained from
bidding documents. The bid the successful bidder awarded
security may be accepted in the the contract. Unlike contracts of
form of [Insurance Surety Works and Plants, in case of
Bonds]34 Account Payee contracts for goods, the need
Demand Draft, Fixed Deposit for the Performance Security
Receipt, Banker's Cheque or depends on the market
Bank Guarantee [including e- conditions and commercial
Bank Guarantee]35 from any of practice for the particular kind

33
Inserted vide DoE OM No. F.20/2/2014-PPD(Pt.) dated 05.08.2022.
25.07.2017. 36
Inserted vide DoE OM No. F.1/2/2022-PPD dated
34
Inserted vide DoE OM No. F.1/1/2022-PPD dated 01.04.2022.
02.02.2022.
35
Inserted vide DoE OM No. F.1/4/2022-PPD dated

43
of goods. Performance Security, contract value to a State or
[in respect of procurement only Central Government agency
of Goods/ Consultancy Services/ or a Public Sector
Non Consultancy Services, Undertaking; or
should be for an amount of (c) in case of maintenance
three to five per cent (3-5%)]37. contract, the amount should
of the value of the contract as not exceed the amount
specified in the bid documents. payable for six months
Performance Security may be under the contract.
furnished in the form of Ministries or Departments of
[Insurance Surety Bond]38 the Central Government may
Account Payee Demand Draft, relax, in consultation with
Fixed Deposit Receipt from a their Financial Advisers
Commercial bank, Bank concerned, the ceilings
Guarantee [including e-Bank (including percentage laid
Guarantee]39 from a down for advance payment
Commercial bank or online for private firms) mentioned
payment in an acceptable form above. While making any
safeguarding the purchaser's advance payment as above,
interest in all respects. adequate safeguards in the
(ii) Performance Security should form of bank guarantee etc.
remain valid for a period of sixty should be obtained from the
days beyond the date of firm.
completion of all contractual Rule 172 (2) Part payment to suppliers:
obligations of the supplier Depending on the terms of delivery
including warranty obligations. incorporated in a contract, part
(iii) Bid security should be refunded payment to the supplier may be
to the successful bidder on released after it dispatches the goods
receipt of Performance Security. from its premises in terms of the
Rule 172 (1) Advance payment to contract.
supplier Rule 173 Transparency, competition,
Ordinarily, payments for services fairness and elimination of
rendered or supplies made should be arbitrariness in the procurement
released only after the services have process All government purchases
been rendered or supplies made. should be made in a transparent,
However, it may become necessary competitive and fair manner, to
to make advance payments for secure best value for money. This will
example in the following types of also enable the prospective bidders to
cases: formulate and send their competitive
(i) Advance payment demanded by bids with confidence. Some of the
firms holding maintenance measures for ensuring the above are
contracts for servicing of Air- as follows:-
conditioners, computers, other (i) the text of the bidding
costly equipment, etc. document should be self-
(ii) Advance payment demanded by contained and comprehensive
firms against fabrication without any ambiguities. All
contracts, turn-key contracts essential information, which a
etc. bidder needs for sending
Such advance payments should responsive bid, should be
not exceed the following limits: clearly spelt out in the bidding
(a) Thirty per cent. of the document in simple language.
contract value to private The condition of prior turnover
firms; and prior experience may be
(b) Forty per cent. of the relaxed for Startups (as defined

37
Amended vide DoE OM No. F.1/2/2023-PPD dated 38
Inserted vide DoE OM No. F.1/1/2022-PPD dated
01.01.2024 02.02.2022.
Amount of performance security plus security deposit/ 39
Inserted vide DoE OM No. F.1/4/2022-PPD dated
retention money for procurement of works will continue to 05.08.2022.
be 3% to 10%.

44
by Department of Industrial document, the procuring
Policy and Promotion) subject to entity shall publish or
meeting of quality & technical communicate such
specifications and making modification or clarification
suitable provisions in the in the same manner as the
bidding document. The bidding publication or
document should contain, communication of the initial
interalia. bidding document was
(a) Description and made.
Specifications of goods ( b) In case a clarification or
including the nature, modification is issued to the
quantity, time and place or bidding document, the
places of delivery. procuring entity shall, before
(b) the criteria for eligibility and the last date for submission
qualifications to be met by of bids, extend such time
the bidders such as limit, if, in its opinion more
minimum level of time is required by bidders to
experience, past take into account the
performance, technical clarification or modification,
capability, manufacturing as the case may be, while
facilities and financial submitting their bids.
position etc. or limitation for ( c) Any bidder who has
participation of the bidders, submitted his bid in
if any. response to the original
(c) eligibility criteria for goods invitation shall have the
indicating any legal opportunity to modify or re-
restrictions or conditions submit it, as the case may
about the origin of goods be, or withdraw such bid in
etc. which may be required case the modification to
to be met by the successful bidding document materially
bidder. affect the essential terms of
(d) the procedure as well as the procurement, within the
date, time and place for period initially allotted or
sending the bids. such extended time as may
(e) date, time and place of be allowed for submission of
opening of the bid. bids, after the modifications
(f) Criteria for evaluation of bids are made to the bidding
(g) special terms affecting document by the procuring
performance, if any. entity:
(h) Essential terms of the Provided that the bid last
procurement contract. submitted or the bid as
(i) Bidding Documents should modified by the bidder shall
include a clause that "if a be considered for evaluation
firm quotes NIL charges/ (iv) Suitable provision should be
consideration, the bid shall kept in the bidding document to
be treated as unresponsive enable a bidder to question the
and will not be considered". bidding conditions, bidding
(ii) Any other information which the process and/ or rejection of its
procuring entity considers bid. The reasons for rejecting a
necessary for the bidders to tender or non-issuing a tender
submit their bids. document to a prospective
(iii) Modification to bidding bidder must be disclosed where
document: enquiries are made by the
( a) In case any bidder.
modification is made to the (v) Suitable provision for
bidding document or any settlement of disputes, if any,
clarification is issued which emanating from the resultant
materially affects the terms contract, should be kept in the
contained in the bidding bidding document.

45
(vi) The bidding document should of guarantees in respect of
indicate clearly that the the subject matter of
resultant contract will be procurement
interpreted under Indian Laws. ( d ) price.
(vii) The bidders should be given ( e ) cost of operating,
reasonable time to prepare and maintaining and repairing
send their bids. etc.
(viii) The bids should be opened in (xii) Bids received should be
public and authorised evaluated in terms of the
representatives of the bidders conditions already incorporated
should be permitted to attend in the bidding documents; No
the bid opening. new condition which was not
(ix) The specifications of the incorporated in the bidding
required goods should be documents should be brought in
clearly stated without any for evaluation of the bids.
ambiguity so that the Determination of a bid's
prospective bidders can send responsiveness should be based
meaningful bids. In order to on the contents of the bid itself
attract sufficient number of without recourse to extrinsic
bidders, the specification should evidence.
be broad based to the extent (xiii) Bidders should not be permitted
feasible to alter or modify their bids after
(x) Pre-bid conference: In case of expiry of the deadline for receipt
turn- key contract(s) or of bids.
contract(s) of special nature for (xiv) Negotiation with bidders after
procurement of sophisticated bid opening must be severely
and costly equipment or discouraged. However, in
wherever felt necessary, a exceptional circumstances
suitable provision is to be kept where price negotiation against
in the bidding documents for an ad-hoc procurement is
one or more rounds of pre-bid necessary due to some
conference for clarifying issues unavoidable circumstances, the
and clearing doubts, if any, same may be resorted to only
about the specifications and with the lowest evaluated
other allied technical details of responsive bidder.
the plant, equipment and (xv) Deleted.40
machinery etc. projected in the (xvi) Contract should ordinarily be
bidding document. The date, awarded to the lowest
time and place of pre-bid evaluated bidder whose bid has
conference should be indicated been found to be responsive
in the bidding document. This and who is eligible and qualified
date should be sufficiently to perform the contract
ahead of bid opening date. The satisfactorily as per the terms
records of such conference shall and conditions incorporated in
be intimated to all bidders and, the corresponding bidding
shall also be exhibited on the document. However, where the
website(s) where tender was lowest acceptable bidder
published. against ad-hoc requirement is
(xi) Criteria for determining not in a position to supply the
responsiveness are to be taken full quantity required, the
into account for evaluating the remaining quantity, as far as
bids such as: possible, be ordered from the
( a ) time of delivery. next higher responsive bidder at
( b ) Performance/ efficiency/ the rates offered by the lowest
environmental responsive bidder.
characteristics. (xvii) Procurement of Energy Efficient
( c ) the terms of payment and Electrical Appliances: Ministries/

40
Deleted vide DoE OM No. F.1/26/2018-PPD dated 02.04.2019.

46
Departments while procuring recommend the procurement,
electrical appliances notified by no member of the purchase
Department of Expenditure Committee should be reporting
shall ensure that they carry the directly to any other member of
notified threshold or higher Star such Committee in case
Rating of Bureau of Energy estimated value of procurement
Efficiency (BEE). exceeds [Rs. 50 lakhs]41.
(xviii) The name of the successful Rule 174 Efficiency, Economy and
bidder awarded the contract Accountability in Public
should be mentioned in the Procurement System. Public
CPPP, Ministries or Departments procurement procedure should
website and their notice board ensure efficiency, economy and
or bulletin. accountability in the system. To
(xix) Rejection of all Bids is justified achieve the same, the following keys
when areas should be addressed:
a. effective competition is (i) To reduce delay, appropriate
lacking. time frame for each stage of
b. all Bids and Proposals are procurement should be
not substantially prescribed by the Ministry or
responsive to the Department.
requirements of the (ii) To minimise the time needed for
Procurement Documents. decision making and placement
c. the Bids'/Proposals' prices of contract, every
are substantially higher Ministry/Department, with the
that the updated cost approval of the competent
estimate or available authority, may delegate,
budget; or wherever necessary,
d. none of the technical appropriate purchasing powers
Proposals meets the to the lower functionaries.
minimum technical (iii) The Ministries or Departments
qualifying score. should ensure placement of
(xx) Lack of competition in rule contract within the original
173(xix) shall not be validity of the bids. Extension of
determined solely on the basis bid validity must be discouraged
of the number of Bidders. Even and resorted to only in
when only one Bid is submitted, exceptional circumstances.
the process may be considered (iv) Deleted.42
valid provided following Rule 175 (1) Code of Integrity
conditions are satisfied: No official of a procuring entity
a. the procurement was or a bidder shall act in
satisfactorily advertised contravention of the codes
and sufficient time was which includes
given for submission of (i) prohibition of
bids. ( a) making offer, solicitation or
b. the qualification criteria acceptance of bribe,
were not unduly reward or gift or any
restrictive; and material benefit, either
c. prices are reasonable in directly or indirectly, in
comparison to market exchange for an unfair
values advantage in the
(xxi) When a limited or open tender procurement process or to
results in only one effective otherwise influence the
offer, it shall be treated as a procurement process.
single tender contract. ( b) any omission, or
(xxii) In case a purchase Committee misrepresentation that
is constituted to purchase or may mislead or attempt to

41 02.04.2019.
Amended vide Department of Expenditure (DoE), Ministry
of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024
42
Deleted vide DoE OM No. F.1/26/2018-PPD dated

47
mislead so that financial or new and better version, the
other benefit may be department may trade the existing
obtained or an obligation old item while purchasing the new
avoided. one. For this purpose, a suitable
( c) any collusion, bid rigging or clause is to be incorporated in the
anticompetitive behavior bidding document so that the
that may impair the prospective and interested bidders
transparency, fairness and formulate their bids accordingly.
the progress of the Depending on the value and
procurement process. condition of the old item to be
( d) improper use of traded, the time as well as the mode
information provided by of handing over the old item to the
the procuring entity to the successful bidder should be decided
bidder with an intent to and relevant details in this regard
gain unfair advantage in suitably incorporated in the bidding
the procurement process document. Further, suitable
or for personal gain. provision should also be kept in the
( e) any financial or business bidding document to enable the
transactions between the purchaser either to trade or not to
bidder and any official of trade the item while purchasing the
the procuring entity related new one.
to tender or execution PROCUREMENT OF SERVICES
process of contract; which A. CONSULTING SERVICES
can affect the decision of Rule 177 "Consulting Service means any
the procuring entity subject matter of procurement
directly or indirectly. (which as distinguished from 'Non-
( f) any coercion or any threat Consultancy Services' involves
to impair or harm, directly primarily non-physical project-
or indirectly, any party or specific, intellectual and procedural
its property to influence processes where outcomes/
the procurement process. deliverables would vary from one
( g) obstruction of any consultant to another), other than
investigation or auditing of goods or works, except those
a procurement process. incidental or consequential to the
( h) making false declaration or service, and includes professional,
providing false information intellectual, training and advisory
for participation in a tender services or any other service
process or to secure a classified or declared as such by a
contract; procuring entity but does not include
(ii) disclosure of conflict of direct engagement of a retired
interest. Government servant.
(iii) Disclosure by the bidder of any Note: These Services typically
previous transgressions made in involve providing expert or strategic
respect of the provisions of sub- advice e.g., management
clause (i) with any entity in any consultants, policy consultants,
country during the last three communications consultants,
years or of being debarred by Advisory and project related
any other procuring entity. Consulting Services which include,
Rule 175 (2) The procuring entity, after giving feasibility studies, project
a reasonable opportunity of being management, engineering services,
heard, comes to the conclusion that a finance, accounting and taxation
bidder or prospective bidder, as the services, training and development
case may be, has contravened the etc.
code of integrity, may take Rule 178 The Ministries or Departments may
appropriate measures. hire external professionals,
Rule 176 Buy-Back Offer consultancy firms or consultants
When it is decided with the approval (referred to as consultant
of the competent authority to hereinafter) for a specific job, which
replace an existing old item(s) with a is well defined in terms of content

48
and time frame for its completion. etc.
Rule 179 This chapter contains the Where the estimated cost of the
(ii)
fundamental principles applicable to consulting services is above
all Ministries or Departments [Rupees Fifty lakhs]44, in
regarding engagement of addition to (i) above, an enquiry
consultant(s). Detailed instructions for seeking 'Expression of
to this effect may be issued by the Interest' from consultants
concerned Ministries or should be published on [GeM as
Departments. However, the well as on GeM- Central Public
Ministries or Departments shall Procurement Portal (CPPP)]45.
ensure that they do not contravene An organisation having its own
the basic rules contained in this website should also publish all
chapter. its advertised tender enquiries
Rule 180 Identification of Services on the website. Enquiry for
required to be performed by seeking Expression of Interest
Consultants: Engagement of should include in brief, the
consultants may be resorted to in broad scope of work or service,
situations requiring high quality inputs to be provided by the
services for which the concerned Ministry or Department,
Ministry/ Department does not have eligibility and the pre-
requisite expertise. Approval of the qualification criteria to be met
competent authority should be by the consultant(s) and
obtained before engaging consultant's past experience in
consultant(s). similar work or service. The
Rule 181 Preparation of scope of the consultants may also be asked
required Consultant(s): The to send their comments on the
Ministries/ Departments should objectives and scope of the
prepare in simple and concise work or service projected in the
language the requirement, enquiry. Adequate time should
objectives and the scope of the be allowed for getting
assignment. The eligibility and responses from interested
prequalification criteria to be met by consultants.
the consultants should also be Rule 184 Short listing of consultants. On
clearly identified at this stage. the basis of responses received from
Rule 182 Estimating reasonable the interested parties as per Rule
expenditure: Ministry or 183 above, consultants meeting the
Department proposing to engage requirements should be short listed
consultant(s) should estimate for further consideration. The
reasonable expenditure for the same number of short listed consultants
by ascertaining the prevalent market should not be less than three.
conditions and consulting other Rule 185 Preparation of Terms of
organisations engaged in similar Reference (TOR).
activities. The TOR should include
Rule 183 Identification of likely sources. ( i) Precise statement of objectives.
(i) Where the estimated cost of the ( ii) Outline of the tasks to be
consulting service is up to carried out.
[Rupees Fifty lakhs]43, ( iii) Schedule for completion of
preparation of a long list of tasks.
potential consultants may be ( iv) The support or inputs to be
done on the basis of formal or provided by the Ministry or
informal enquiries from other Department to facilitate the
Ministries or Departments or consultancy.
Organisations involved in similar ( v) The final outputs that will be
activities, Chambers of required of the Consultant.
Commerce & Industry, Rule 186 Preparation and Issue of
Association of consultancy firms Request for Proposal (RFP). RFP

43 of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024

Amended vide Department of Expenditure (DoE), Ministry
45
of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024. Amended vide Department of Expenditure (DoE), Ministry
44 of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024
Amended vide Department of Expenditure (DoE), Ministry

49
is the document to be used by the bidders who have been declared
Ministry/Department for obtaining technically qualified by the
offers from the consultants for the Consultancy Evaluation Committee as
required service. The RFP should be per Rule 189 above for further
issued to the shortlisted consultants analysis or evaluation and ranking
to seek their technical and financial and selecting the successful bidder
proposals. The RFP should contain: for placement of the consultancy
( i) A letter of Invitation contract.
( ii ) Information to Consultants Rule 191 Methods of Selection/ Evaluation
regarding the procedure for of Consultancy Proposals
submission of proposal. The basis of selection of the
( ii i) Terms of Reference (TOR). consultant shall follow any of the
( iv) Eligibility and pre-qualification methods given in Rule 192 to 194 as
criteria in case the same has not appropriate for the circumstances in
been ascertained through each case.
Enquiry for Expression of Rule 192 Quality and Cost Based Selection
Interest. (QCBS):QCBS may be used for
(v) List of key position whose CV Procurement of consultancy
and experience would be services, where quality of
evaluated. consultancy is of prime concern.
(vi) Bid evaluation criteria and (i) In QCBS initially the quality of
selection procedure. technical proposals is scored as
(vii) Standard formats for technical per criteria announced in the
and financial proposal. RFP. Only those responsive
(viii) Proposed contract terms. proposals that have achieved at
(ix) Procedure proposed to be least minimum specified
followed for midterm review of qualifying score in quality of
the progress of the work and technical proposal are
review of the final draft report. considered further.
Rule 187 Receipt and opening of proposals ( i i ) After opening and scoring, the
Proposals should ordinarily be asked Financial proposals of
for from consultants in 'Two bid' responsive technically qualified
system with technical and financial bidders, a final combined score
bids sealed separately. The bidder is arrived at by giving
should put these two sealed predefined relative weight ages
envelopes in a bigger envelop duly for the score of quality of the
sealed and submit the same to the technical proposal and the score
Ministry or Department by the of financial proposal.
specified date and time at the ( i i i ) The RFP shall specify the
specified place. On receipt, the minimum qualifying score for
technical proposals should be opened the quality of technical proposal
first by the Ministry or Department at and also the relative weight
the specified date, time and place. ages to be given to the quality
Rule 188 Late Bids. Late bids i.e. bids received and cost (determined for each
after the specified date and time of case depending on the relative
receipt should not be considered. importance of quality vis-a-vis
Rule 189 Evaluation of Technical Bids: cost aspects in the assignment,
Technical bids should be analysed e.g. 70:30, 60:40, 50:50 etc).
and evaluated by a Consultancy The proposal with the highest
Evaluation Committee (CEC) weighted combined score
constituted by the Ministry or (quality and cost) shall be
Department. The CEC shall record in selected.
detail the reasons for acceptance or ( i v ) The weight age of the technical
rejection of the technical proposals parameters i.e. non- financial
analysed and evaluated by it. parameters in no case should
Rule 190 Evaluation of Financial Bids of exceed 80 percent.
the technically qualified bidders: Rule 193 Least Cost System (LCS). LCS is
The Ministry or Department shall appropriate for assignments of a
open the financial bids of only those standard or routine nature (such as

50
audits and engineering design of a task force approach and
non-complex works) where well continuously monitoring the
established methodologies, practices performance of the consultant(s) so
and standards exist. Unlike QCBS, that the output of the consultancy is
there is no weight age for Technical in line with the
score in the final evaluation and the Ministry/Department's objectives.
responsive technically qualified Rule 196 Public competition for Design of
proposal with the lowest evaluated symbols/logos. Design
cost shall be selected. competition should be conducted in
Rule 194 Single Source a transparent, fair and objective
Selection/Consultancy by manner. Wide publicity should be
nomination. The selection by direct given to the competition so as to
negotiation/nomination, on the lines ensure that the information is
of Single Tender mode of accessible to all possible participants
procurement of goods, is considered in the competition. This should
appropriate only under exceptional include publication on the website of
circumstance such as: Ministry/Department concerned, as
(i) tasks that represent a natural also the Central Public Procurement
continuation of previous work Portal. If the selection has been by a
carried out by the firm; jury of experts nominated for the
(ii) in case of an emergency purpose, the composition of the jury
situation, situations arising after may also be notified.
natural disasters, situations B. OUTSOURCING OF SERVICES
where timely completion of the Rule 197 "Non-Consulting Service" means
assignment is of utmost any subject matter of procurement
importance; and (which as distinguished from
(iii) situations where execution of 'Consultancy Services'), involve
the assignment may involve use physical, measurable deliverables/
of proprietary techniques or outcomes, where performance
only one consultant has standards can be clearly identified
requisite expertise. and consistently applied, other than
(iv) Under some special goods or works, except those
circumstances, it may become incidental or consequential to the
necessary to select a particular service, and includes maintenance,
consultant where adequate hiring of vehicle, outsourcing of
justification is available for such building facilities management,
single-source selection in the security, photocopier service,
context of the overall interest of janitor, office errand services,
the Ministry or Department. Full drilling, aerial photography, satellite
justification for single source imagery, mapping etc.
selection should be recorded in Rule 198 Procurement of Non-consulting
the file and approval of the Services.
competent authority obtained A Ministry or Department may
before resorting to such single- procure certain non-consulting
source selection. services in the interest of economy
(v) It shall ensure fairness and and efficiency and it may prescribe
equity, and shall have a detailed instructions and procedures
procedure in place to ensure for this purpose without, however,
that the prices are reasonable contravening the following basic
and consistent with market guidelines.
rates for tasks of a similar Rule 199 Identification of likely
nature; and the required contractors.
consultancy services are not The Ministry or Department should
split into smaller sized prepare a list of likely and potential
procurement. contractors on the basis of formal or
Rule 195 Monitoring the Contract. The informal enquiries from other
Ministry/Department should be Ministries or Departments and
involved throughout in the conduct Organisations involved in similar
of consultancy, preferably by taking activities, scrutiny of 'Yellow pages',

51
and trade journals, if available, web receipt should not be considered.
site etc. Rule 203 Evaluation of Bids Received.
Rule 200 Preparation of Tender enquiry. The Ministry or Department should
Ministry or Department should evaluate, segregate, rank the
prepare a tender enquiry responsive bids and select the
containing, inter alia : successful bidder for placement of
(i) The details of the work or the contract.
service to be performed by the Rule 204 Procurement of Non-consulting
contractor; services by nomination. Should it
(ii) The facilities and the inputs become necessary, in an exceptional
which will be provided to the situation to procure a non-consulting
contractor by the Ministry or service from a specifically chosen
Department; contractor, the Competent Authority
(iii) Eligibility and qualification in the Ministry or Department may
criteria to be met by the do so in consultation with the
contractor for performing the Financial Adviser. In such cases the
required work/service; and detailed justification, the
(iv) The statutory and contractual circumstances leading to such
obligations to be complied with procurement by choice and the
by the contractor. special interest or purpose it shall
Rule 201 Invitation of Bids. serve, shall form an integral part of
(i) For estimated value of the non- the proposal.
consulting service up to Rule 205 Monitoring the Contract. The
[Rupees Fifty lakhs]46 or less: Ministry or Department should be
The Ministry or Department involved throughout in the conduct
should scrutinise the of the contract and continuously
preliminary list of likely monitor the performance of the
contractors as identified as per contractor.
Rule 199 above, decide the Rule 206 Any circumstances which are not
prima facie Eligible and capable covered in Rule 198 to Rule 205 for
contractors and issue limited procurement of non-consulting
tender enquiry to them asking services, the procuring entity may
for their offers by a specified refer Rule 142 to Rule 176 pertaining
date and time etc. as per to procurement of goods and not to
standard practice. The number the procurement of consulting
of the contractors so identified services.
for issuing limited tender
enquiry should be more than
three.
(ii) For estimated value of the non-
consulting service above [Rs. 50
lakhs]47: The Ministry or
Department should issue
advertisement in such cases on
[GeM as well as on GeM-
CPPP]48. An organisation having
its own website should also
publish all its advertised tender
enquiries on the website. The
advertisements for invitation of
tenders should give the
complete web address from
where the bidding documents
can be downloaded.
Rule 202 Late Bids. Late bids i.e. bids received
after the specified date and time of

46 of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024

Amended vide Department of Expenditure (DoE), Ministry
48
of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024 Amended vide Department of Expenditure (DoE), Ministry
47 of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024
Amended vide Department of Expenditure (DoE), Ministry

52
INVENTORY MANAGEMENT examine, count, measure or
Rule 207 This chapter contains the basic rules weigh the materials as the case
applicable to all Ministries or may be, to ensure that the
Departments regarding inventory quantities are correct, the
management. Detailed instructions quality is in line with the
and procedures relating to inventory required specifications and
management may be prescribed by there is no damage or
various Ministries or Departments deficiency in the materials. An
broadly in conformity with the basic appropriate receipt shall also be
rules contained in this chapter. given to this effect by the
Rule 208 (1) Receipt of goods and indenting officer to the division
materials from private sending the materials.
suppliers. (ii) In the case of issue of materials
(i) While receiving goods and from stock for departmental
materials from a supplier, the use, manufacture, sale, etc., the
officer—in-charge of stores Officer-in charge of the stores
should refer to the relevant shall see that an appropriate
contract terms and follow the indent, in the prescribed form
prescribed procedure for has been projected by the
receiving the materials. indenting officer. A
(ii) All materials shall be counted, written/online
measured or weighed and acknowledgement of receipt of
subjected to visual inspection at material issued shall be
the time of receipt to ensure obtained from the indenting
that the quantities are correct, officer or his authorised
the quality is according to the representative at the time of
required specifications and issue of materials.
there is no damage or (iii) In case of materials issued to a
deficiency in the materials. contractor, the cost of which is
Technical inspection where recoverable from the
required should be carried out contractor, all relevant
at this stage by Technical particulars, including the
Inspector or Agency approved recovery rates and the total
for the purpose. An appropriate value chargeable to the
receipt, in terms of the relevant contractor should be got
contract provisions may also be acknowledged from the
given to the supplier on contractor duly signed and
receiving the materials. dated.
( i i i ) Details of the material so (iv) If the Officer-in-charge of the
received should thereafter be stores is unable to comply with
entered in the appropriate stock the indent in full, he should
register, preferably in an IT- make the supply to the extent
based system. The officer-in- available and make suitable
charge of stores should certify entry to this effect in the
that he has actually received the indentor's copy of the indent. In
material and recorded it in the case alternative materials are
appropriate stock registers. available in lieu of the indented
Rule 209 Receipt/issue of goods and materials, a suitable indication
materials from internal to this effect may be made in
divisions of the same the document.
organisation. Rule 210 Custody of goods and materials.
(i) The indenting officer requiring The officer-in-charge of stores having
goods and materials from custody of goods and materials,
internal division(s) of the same especially valuable and/or
organisation should project an combustible articles, shall take
indent in the prescribed form for appropriate steps for arranging their
this purpose. While receiving safe custody, proper storage
the supply against the indent, accommodation, including
the indenting officer shall arrangements for maintaining

53
required temperature, dust free The inventory for fixed assets shall
environment etc. ordinarily be maintained at site.
Rule 211 Lists and Accounts. Fixed assets should be verified at
(i) The Officer-in-charge of least once in a year and the outcome
stores shall maintain of the verification recorded in the
suitable item-wise lists and corresponding register.
accounts and prepare Discrepancies, if any, shall be
accurate returns in respect promptly investigated and brought
of the goods and materials to account.
in his charge making it Rule 213 (2) Verification of Consumables:
possible at any point of time A physical verification of all the
to check the actual balances consumable goods and materials
with the book balances. The should be undertaken at least once
form of the stock accounts in a year and discrepancies, if any,
mentioned above shall be should be recorded in the stock
determined with reference register for appropriate action by the
to the nature of the goods competent authority.
and materials, the Rule 213 (3) Procedure for verification:
frequency of the (i) Verification shall always be
transactions and the special made in the presence of the
requirements of the officer, responsible for the
concerned custody of the inventory being
Ministries/Departments. verified.
(ii) Separate accounts shall be (ii) A certificate of verification along
kept for with the findings shall be
( a ) Fixed Assets such as plant, recorded in the stock register.
machinery, equipment, (iii) Discrepancies, including
furniture, fixtures etc. in shortages, damages and
the Form GFR-22. unserviceable goods, if any,
( b ) Consumables such as identified during verification,
office stationery, shall immediately be brought to
chemicals, maintenance the notice of the competent
spare parts etc. in the Form authority for taking appropriate
GFR-23. action in accordance with
( c ) Library books in the Form provision given in Rule 33 to 38.
GFR 18 Rule 214 Buffer Stock. Depending on the
( d ) Assets of historical/artistic frequency of requirement and
value held by quantity thereof as well as the pattern
museum/government of supply of a consumable material,
departments in the Form optimum buffer stock should be
GFR-24. determined by the competent
Note: These forms can be authority.
supplemented with additional Note: As the inventory carrying cost
details by Ministries/ is an expenditure that does not add
Departments as required. value to the material being stocked, a
Rule 212 Hiring out of Fixed Assets. When material remaining in stock for over a
a fixed asset is hired to local bodies, year shall generally be considered
contractors or others, proper record surplus, unless adequate reasons to
should be kept of the assets and the treat it otherwise exist. The items so
hire and other charges as declared surplus may be dealt as per
determined under rules prescribed the procedure laid down under Rule
by the competent authority, should 217.
be recovered regularly. Calculation Rule 215 Physical verification of Library
of the charges to be recovered from books.
the local bodies, contractors and (i) Complete physical verification of
others as above should be based on books should be done every
the historical cost. year in case of libraries having
Rule 213 (1) Physical verification of Fixed not more than twenty thousand
Assets. volumes. For libraries having

54
more than twenty thousand and reserved price, which will
volumes and up to fifty be required while disposing of
thousand volumes, such the surplus goods, should also
verification should be done at be worked out. In case where it
least once in three years. is not possible to work out the
Sample physical verification at book value, the original
intervals of not more than three purchase price of the goods in
years should be done in case of question may be utilised. A
libraries having more than fifty report of stores for disposal
thousand volumes. In case such shall be prepared in Form GFR-
verification reveals unusual or 10.
unreasonable shortages, (iv) In case an item becomes
complete verification shall be unserviceable due to
done. negligence, fraud or mischief on
(ii) Loss of five volumes per one the part of a Government
thousand volumes of books servant, responsibility for the
issued/consulted in a year may same should be fixed.
be taken as reasonable (v) Sale of Hazardous
provided such losses are not waste/Scrap
attributable to dishonesty or Batteries/Electronic waste:
negligence. However, loss of a Scrap lots comprising of
book of a value exceeding Rs. hazardous waste, batteries etc.
1,000/- (Rupees One thousand shall be sold keeping in view the
only) and rare books extant guidelines of Ministry of
irrespective of value shall Environment & Forest.
invariably be investigated and Prospective bidders of such lots
appropriate action taken. of hazardous waste/scrap
Rule 216 Transfer of charge of goods, batteries/ e-waste should be in
materials etc. In case of transfer of possession of registration, valid
Officer-in-charge of the goods, on the date of e-Auction and on
materials etc., the transferred officer the date of delivery, as recycler/
shall see that the goods or material preprocessor agency.
are made over correctly to his Rule 218 Modes of Disposal.
successor. A statement giving all (i) Surplus or obsolete or
relevant details of the goods, unserviceable goods of assessed
materials etc., in question shall be residual value above [Rupees
prepared and signed with date by the Four Lakh]49 should be disposed
relieving officer and the relieved of by:
officer. Each of these officers will (a) obtaining bids through
retain a copy of the signed statement. advertised tender or
Rule 217 Disposal of Goods. ( b ) public auction. For surplus
(i) An item may be declared or obsolete or
surplus or obsolete or unserviceable goods with
unserviceable if the same is of residual value less than
no use to the Ministry or [Rupees Four Lakh]50, the
Department. The reasons for mode of disposal will be
declaring the item surplus or determined by the
obsolete or unserviceable competent authority,
should be recorded by the keeping in view the
authority competent to necessity to avoid
purchase the item. accumulation of such goods
(ii) The competent authority may, and consequential blockage
at his discretion, constitute a of space and, also,
committee at appropriate level deterioration in value of
to declare item(s) as surplus or goods to be disposed of.
obsolete or unserviceable. Ministries/ Departments
(iii) The book value, guiding price should, as far as possible

49 50
Amended vide Department of Expenditure (DoE), Ministry Amended vide Department of Expenditure (DoE), Ministry
of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024 of Finance (MoF) OM No. F.1/3/2024-PPD dated 10.07.2024

55
prepare a list of such competition, fairness and
goods. elimination of discretion.
(ii) Certain surplus or obsolete or Wide publicity should be
unserviceable goods such as ensured of the sale plan
expired medicines, food grain, and the goods to be sold.
ammunition etc., which are All the required terms
hazardous or unfit for human and conditions of sale are
consumption, should be to be incorporated in the
disposed of or destroyed bidding document
immediately by adopting comprehensively in plain
suitable mode so as to avoid any and simple language.
health hazard and/or Applicability of taxes, as
environmental pollution and also relevant, should be
the possibility of misuse of such clearly stated in the
goods. document.
( i i i ) Surplus or obsolete or (b) The bidding document
unserviceable goods, should also indicate the
equipment and documents, location and present
which involve security condition of the goods to
concerns (e.g. currency, be sold so that the
negotiable instruments, bidders can inspect the
receipt books, stamps, goods before bidding.
security press etc.) should (c) The bidders should be
be disposed of/ destroyed asked to furnish bid
in an appropriate manner security along with their
to ensure compliance with bids. The amount of bid
rules relating to official security should ordinarily
secrets as well as financial be ten per cent. of the
prudence. assessed or reserved
Rule 219 Disposal through Advertised Tender. price of the goods. The
(i) The broad steps to be adopted exact bid security amount
for this purpose are as follows should be indicated in the
(a) Preparation of bidding bidding document.
documents. (d) The bid of the highest
(b) Invitation of tender for the acceptable responsive
surplus goods to be sold. bidder should normally
(c) Opening of bids. be accepted. However, if
(d) Analysis and evaluation of the price offered by that
bids received. bidder is not acceptable,
(e) Selection of highest negotiation may be held
responsive bidder. only with that bidder. In
(f) Collection of sale value case such negotiation
from the selected bidder. does not provide the
(g) Issue of sale release order desired result, the
to the selected bidder. reasonable or acceptable
(h) Release of the sold surplus price may be counter
goods to the selected offered to the next
bidder. highest responsive
(i) Return of bid security to bidder(s).
the unsuccessful bidders. (e) In case the total quantity
(ii) The important aspects to be to be disposed of cannot
kept in view while disposing be taken up by the
the goods through advertised highest acceptable
tender are as under:- bidder, the remaining
(a) The basic principle for quantity may be offered
sale of such goods to the next higher
through advertised bidder(s) at the price
tender is ensuring offered by the highest
transparency, acceptable bidder.

56
(f) Full payment, i.e. the taken on the spot from the
residual amount after successful bidder either in cash
adjusting the bid security or in the form of Deposit-at-
should be obtained from Call-Receipt (DACR), drawn in
the successful bidder favour of the Ministry or
before releasing the Department selling the goods.
goods. The goods should be handed
(g) In case the selected over to the successful bidder
bidder does not show only after receiving the balance
interest in lifting the payment.
goods, the bid security (v) The composition of the auction
should be forfeited and team will be decided by the
other actions initiated competent authority. The team
including re-sale of the should however include an
goods in question at the officer of the Internal Finance
risk and cost of the Wing of the department
defaulter, after obtaining Rule 221 Disposal at scrap value or by
legal advice. other modes. If a Ministry or Department
(iii) Late bids i.e. bids received after is unable to sell any surplus or obsolete or
the specified date and time of unserviceable item in spite of its attempts
receipt should not to be through advertised tender or auction, it
considered. may dispose of the same at its scrap value
Rule 220 Disposal through Auction. with the approval of the competent
(i) A Ministry or Department may authority in consultation with Finance
undertake auction of goods to division. In case the Ministry or Department
be disposed of either directly or is unable to sell the item even at its scrap
through approved auctioneers. value, it may adopt any other mode of
(ii) The basic principles to be disposal including destruction of the item in
followed here are similar to an eco-friendly manner.
those applicable for disposal Rule 222 A sale account should be prepared for
through advertised tender so as goods disposed of in Form GFR 11 duly
to ensure transparency, signed by the officer who supervised the
competition, fairness and sale or auction.
elimination of discretion. The Rule 223 (1) Powers to write off. All profits
auction plan including details of and losses due to revaluation, stock-taking
the goods to be auctioned and or other causes shall be duly recorded and
their location, applicable terms adjusted where necessary. Formal sanction
and conditions of the sale etc. of the competent authority shall be
should be given wide publicity in obtained in respect of losses, even though
the same manner as is done in no formal correction or adjustment in
case of advertised tender. government accounts is involved. Powers
(iii) While starting the auction to write off of losses are available under the
process, the condition and Delegation of Financial Powers Rules.
location of the goods to be Rule 223 (2) Losses due to depreciation :
auctioned, applicable terms and Losses due to depreciation shall be
conditions of sale etc., (as analysed, and recorded under following
already indicated earlier while heads, as applicable :-
giving vide publicity for the (i) normal fluctuation of market
same), should be announced prices;
again for the benefit of the (ii) normal wear and tear;
assembled bidders. (iii) lack of foresight in regulating
(iv) During the auction process, purchases; and
acceptance or rejection of a bid (iv) negligence after purchase.
should be announced Rule 223 (3) Losses not due to
immediately on the stroke of the depreciation : Losses not due to
hammer. If a bid is accepted, depreciation shall be grouped under the
earnest money (not less than following heads :-
twenty-five per cent. of the bid (i) losses due to theft or fraud;
value) should immediately be (ii) losses due to neglect;

57
(iii) anticipated losses on account of
obsolescence of stores or of
purchases in excess of
requirements;
(iv) losses due to damage, and
(v) losses due to extra ordinary
situations under 'Force Majeure'
conditions like fire, flood,
enemy action, etc.;

58
CONTRACT MANAGEMENT (iv)
Rule 224 (1) All contracts shall be made by an (a) A Ministry or Department
authority empowered to do so by or may, at its discretion,
under the orders of the President in make purchases of value
terms of Article 299 (1) of the up to Rupees two lakh
Constitution of India. and fifty thousand by
Rule 224 (2) All the contracts and assurances issuing purchase orders
of property made in the exercise of containing basic terms
the executive power of the Union and conditions:
shall be executed on behalf of the (b) In respect of Works
President. The words "for and on Contracts, or Contracts
behalf of the President of India" for purchases valued
should follow the designation between Rupees one lakh
appended below the signature of the to Rupees ten lakhs,
officer authorized in this behalf. where tender documents
Note 1: The various classes of include the General
contracts and assurances of property, Conditions of Contract
which may be executed by different (GCC), Special Conditions
authorities, are specified in the of Contract (SCC) and
Notifications issued by the Ministry of scope of work, the letter
Law from time to time. of acceptance will result
Note 2: [The powers of various in a binding contract.
authorities, the conditions under (c) In respect of contracts for
which such powers should be works with estimated
exercised and the general procedure value of Rupees ten lakhs
prescribed with regard to various or above or for purchase
classes of contracts and assurances above Rupees ten lakhs,
of property are laid down in [Rule 11] a Contract document
of the Delegation of Financial Powers should be executed, with
Rules.]51 all necessary clauses to
Rule 225 General principles for contract. make it a self-contained
The following general principles contract. If however,
should be observed while entering these are preceded by
into contracts:— Invitation to Tender,
(i) The terms of contract must be accompanied by GCC and
precise, definite and without SCC, with full details of
any ambiguities. The terms scope and specifications,
should not involve an uncertain a simple one page
or indefinite liability, except in contract can be entered
the case of a cost plus contract into by attaching copies
or where there is a price of the GCC and SCC, and
variation clause in the contract. details of scope and
(ii) Standard forms of contracts specifications, Offer of
should be adopted wherever the Tenderer and Letter
possible, with such of Acceptance.
modifications as are considered (d) Contract document
necessary in respect of should be invariably
individual contracts. The executed in cases of
modifications should be carried turnkey works or
out only after obtaining financial agreements for
and legal advice. maintenance of
(iii) In cases where standard forms equipment, provision of
of contracts are not used, legal services etc.
and financial advice should be (v) No work of any kind should be
taken in drafting the clauses in commenced without proper
the contract. execution of an agreement as
given in the foregoing

51 12.07.2024.
Amended vide Department of Expenditure (DoE),
Ministry of Finance (MoF) OM No. 14(37)/2015-E.II.A dated

59
provisions. prevailing in that month
(vi) Contract document, where and year.
necessary, should be executed (b) A formula for calculation
within 21 days of the issue of of the price variations
letter of acceptance. Non- that have taken place
fulfilment of this condition of between the Base level
executing a contract by the and the Scheduled
Contractor or Supplier would Delivery Date should be
constitute sufficient ground for included in this clause.
annulment of the award and The variations are
forfeiture of Earnest Money calculated by using
Deposit. indices published by
(vii) Cost plus contracts should Governments or
ordinarily be avoided. Where Chambers of Commerce
such contracts become periodically. An
unavoidable, full justification illustrative formula has
should be recorded before been appended to these
entering into the contract. rules at Appendix -11 for
Where supplies or special work guidance.
covered by such cost plus (c) The Price variation clause
contracts have to continue over should also specify cut off
a long duration, efforts should dates for material and
be made to convert future labour, as these inputs
contracts on a firm price basis taper off well before the
after allowing a reasonable scheduled Delivery
period to the Dates.
suppliers/contractors to (d) The price variation clause
stabilize their production/ should provide for a
execution methods and ceiling on price
processes. variations, particularly
Explanation : A cost plus contract where escalations are
means a contract in which the involved. It could be a
price payable for supplies or percentage per annum or
services under the contract is an overall ceiling or both.
determined on the basis of The buyer should ensure
actual cost of production of the a provision in the
supplies or services concerned contract for benefit of
plus profit either at a fixed rate any reduction in the price
per unit or at a fixed percentage in terms of the price
on the actual cost of production variation clause being
(viii) passed on to him.
(a) Price Variation Clause can (e) The clause should also
be provided only in long- stipulate a minimum
term contracts, where percentage of variation of
the delivery period the contract price above
extends beyond 18 which price variations will
months. In short-term be admissible (e.g. where
contracts firm and fixed resultant increase is
prices should be provided lower than two per cent,
for. Where a price no price adjustment will
variation clause is be made in favour of the
provided, the price supplier).
agreed upon should (f) Where advance or stage
specify the base level viz, payments are made there
the month and year to should be a further
which the price is linked, stipulation that no price
to enable variations being variations will be
calculated with reference admissible on such
to the price levels portions of the price,

60
after the dates of such contain the mode and
payment terms of payment of the
(g) Where deliveries are price variation
accepted beyond the admissible.
scheduled Delivery Date (ix) Contracts should include
subject to levy of provision for payment of all
liquidated damages as applicable taxes by the
provided in the Contract, contractor or supplier.
the liquidated damages (x) "Lump sum” contracts should
(if a percentage of the not be entered into except in
price) will be applicable cases of absolute necessity.
on the price as varied by Where lump sum contracts
the operation of the Price become unavoidable, full
variation clause. justification should be recorded.
(h) No price variation will be The contracting authority
admissible beyond the should ensure that conditions in
original Scheduled the lump sum contract
Delivery Date for defaults adequately safeguard and
on the part of the protect the interests of the
supplier. Government.
(i) Price variation may be (xi) Departmental issue of materials
allowed beyond the should be avoided as far as
original Scheduled possible. Where it is decided to
Delivery Date, by specific supply materials
alteration of that date departmentally, a schedule of
through an amendment quantities with the issue rates of
to the contract in cases of such material as are required to
Force Majeure or defaults execute the contract work
by Government. should form an essential part of
(j) Where contracts are for the contract.
supply of equipment, (xii)
goods etc, imported (a) In contracts where
(subject to customs duly government property is
and foreign exchange entrusted to a contractor
fluctuations) and/or either for use on payment
locally manufactured of hire charges or for
(subject to excise duty doing further work on
and other duties and such property, specific
taxes), the percentage provision for
and element of duties safeguarding
and taxes included in the government property
price should be (including insurance
specifically stated, along cover) and for recovery
with the selling rate of of hire charges regularly,
foreign exchange should be included in the
element taken into contracts.
account in the calculation (b) Provision should be made
of the price of the in the contract for
imported item. periodical physical
The mode of calculation verification of the number
of variations in duties and and the physical
taxes and Foreign condition of the items at
exchange rates and the the contractor's
documents to be premises. Results of such
produced in support of verification should be
claims for such variations recorded and appropriate
should also be stipulated penal action taken where
in the Contract. necessary.
(k) The clause should also (xiii) [Copies of all contracts and

61
agreements for purchases of (xvii) A warranty clause should be
the value of Rupees Twenty-five incorporated in every contract,
Lakhs and above entered into requiring the supplier to,
by civil departments of the without charge, repair or rectify
Government, should be sent to defective goods or to replace
the Audit Officer and or the such goods with similar goods
Accounts officer as the case free from defect. Any goods
may be.]52 repaired or replaced by the
(xiv) supplier shall be delivered at the
(a) The terms of a contract, buyers premises without costs
including the scope and to the buyer.
specification once (xviii) All contracts for supply of goods
entered into, should not should reserve the right of
be materially varied. Government to reject goods
(b) Wherever material which do not conform to the
variation in any of the specifications.
terms or conditions in a (xix) No claim for the payment from
contract becomes contractor shall be entertained
unavoidable, the financial after the lapse of three years of
and other effects arising of the claim.
involved should be Rule 226 Management of Contracts.
examined and recorded (i) Implementation of the contract
and specific approval of should be strictly monitored and
the authority competent notices issued promptly
to approve the revised whenever a breach of provisions
financial and other occurs.
commitments obtained, (ii) Proper procedure for safe
before varying the custody and monitoring of Bank
conditions. Guarantees or other
(c) All such changes should Instruments should be laid
be in the form of an down. Monitoring should
amendment to the include a monthly review of all
contract duly signed by Bank Guarantees or other
all parties to the contract. instruments expiring after three
(xv) Normally no extensions of the months, along with a review of
scheduled delivery or the progress of supply or work.
completion dates should be Extensions of Bank Guarantees
granted except where events or other instruments, where
constituting force majeure, as warranted, should be sought
provided in the contract, have immediately.
occurred or the terms and Rule 227 Legal Advice.
conditions include such a Wherever disputes arise during
provision for other reasons. implementation of a contract, legal
Extensions as provided in the advice should be sought before
contract may be allowed initiating action to refer the dispute to
through formal amendments to conciliation and/or arbitration as
the contract duly signed by provided in the contract or to file a suit
parties to the contract. where the contract does not include an
(xvi) All contracts shall contain a arbitration clause. The draft of the
provision for recovery of plaint for arbitration should be got
liquidated damages for defaults vetted by obtaining legal and financial
on the part of the contractor. advice. Documents to be filed in the
Only in exceptional matter of resolution of dispute, if any,
circumstances to be justified by should be carefully scrutinized before
procuring entity in writing, an filing to safeguard government
exemption from such provision interest.
can be made. [Rule 227A Arbitration Awards

52
Amended vide DoE OM No. F.1/26/2018-PPD dated 02.04.2019.

62
(i) In cases where the Ministry/
Department has challenged an
arbitral award and, as a result,
the amount of the arbitral
award has not been paid, 75%
of the arbitral award (which
may include interest up to date
of the award) shall be paid by
the Ministry/ Department to the
contractor/ concessionaire
against a Bank Guarantee (BG).
The BG shall only be for the said
75% of the arbitral award as
above and not for the interest
which may become payable to
the Ministry/ Department
should the subsequent court
order require refund of the said
amount.
(ii) The payment may be made into
a designated Escrow Account
with the stipulation that the
proceeds will be used first, for
payment of lenders' dues,
second, for completion of the
project and then for completion
of other projects of the same
Ministry/ Department as
mutually agreed/ decided. Any
balance remaining in the escrow
account subsequent to
settlement of lenders' dues and
completion of projects of the
Ministry/ Department may be
allowed to be used by the
contractor/ concessionaire with
the prior approval of the lead
banker and the Ministry/
Department. If otherwise
eligible and subject to
contractual provisions,
retention money and other
amounts withheld may also be
released against BG.]53

53
Inserted vide DoE OM No. F./1/9/2021-PPD dated 29.10.2021.

63
Ch.-9 - GRANTS-IN-AID AND LOANS
I. GRANTS-IN-AID undertaken by them. The Ministry
or Department should examine in
Rule 228 As a general principle Grants-in-aid can detail: (a) whether the activities
be given to a person or a public body or proposed to be taken up are
an institution having a distinct legal entity. necessary at all; (b) whether
Thus Grants-in-aid including scholarships these activities, if necessary,
may be sanctioned by an authority need to be undertaken by setting
competent to do so under the Delegation up an autonomous organisation
of Financial Powers Rules to: — only or whether these could be
(a) Institutions or Organizations set performed by the concerned
up as Autonomous Government agency or any other
Organisations, under a specific organisation already existing.
statute or as a society registered (iv) All autonomous organisations,
under the Societies Registration new or already in existence
Act, 1860 or Indian Trusts Act, should be encouraged to
1882 or other statutes. maximise generation of internal
(b) Voluntary organizations or Non- resources and eventually attain
Government Organisations self-sufficiency.
carrying out activities which (v) The Ministry or Department may
promote the welfare schemes consider creating a Corpus Fund
and programmes of the for an Autonomous Body only
Government should be selected with prior concurrence of Ministry
on the basis of well-defined of Finance if the corpus is
criteria regarding financial and created out of budgetary
other resources, credibility and allocation. If the corpus is created
type of activities undertaken. out of internal accruals of the
(c) Educational and other institutions body, approval of the
by way of scholarships or administrative Ministry must be
stipends to the students. obtained.
(d) Urban and Rural local self- (vi) User Charges: Governing Body
government institutions of the Autonomous Body shall
(e) Co-operative societies. review user charges/ sources of
(f) Societies or clubs set up by internal revenue generation at
Government servants to promote least once a year and inform the
amongst themselves social, administrative Ministry. This
cultural and sports activities as exercise should preferably be
recreational avenues. completed before the formulation
Rule 229 General Principles for setting up of of Union Annual Budget.
Autonomous Organisations referred to (vii) All Autonomous Bodies should
under Rule 228(a): - maintain database relating to
(i) No new autonomous institutions grants, income, expenditure,
should be created by Ministries investment assets and employee
or Departments without the strength in the format prescribed
approval of the Cabinet. by the Department of
(ii) No new autonomous institution Expenditure, Ministry of Finance.
should be created by an (viii) Financial advice for
Autonomous Body itself, the Autonomous Bodies: Every
appraisal/approval process for autonomous organisation should
creation of new autonomous designate an officer at
bodies would apply in such cases appropriate level to render
too. However, Regional financial advice whose
Centres/Offices/Sub-Stations of concurrence should be obtained
any autonomous body can be for sanction and incurring of
created with prior approval of the expenditure. The financial limits
administrative ministry in up to which such concurrence is
consultation with Ministry of mandatory may be drawn up by
Finance. each organisation. The Chief
(iii) Stringent criteria should be Executive Officer of the
followed for setting up of new Autonomous body will be
autonomous organisations and responsible for overall financial
the type of activities to be management of the autonomous

64
bodies. wherever the output or
(ix) Peer review of autonomous benefit of services are
organisations: Ministry shall put utilised by others, are levied
in place a system of external or at appropriate rates
internal peer review of (g) the scope for maximizing
autonomous organisations every internal resources
three or five years depending on generation in the
the size and nature of activity. organization so that the
Such a review should be the dependence upon
responsibility of the concerned Government budgetary
administrative division of the support is minimised.
Ministry/Department and should (x) An organisation whose
focus, inter alia, on; performance is found to be
(a) the objective for which the outstanding and internationally
autonomous organisation acclaimed as a result of the
was set up and whether review envisaged under Para (ix)
these objectives have been above should be granted greater
or are being achieved; autonomy and increased
(b) whether the activities should flexibility in matters of recruitment
be continued at all, either and financial rules thereby
because they are no longer enabling it to devise and adopt
relevant or have been staff structures, procedures and
completed or if there has rules suited to improving their
been a substantial failure in productivity.
achievement of objectives. (xi) Autonomous organisations as
(c) whether the nature of the also others with a budgetary
activities is such that these support of more than Rupees five
need to be performed only crores per annum, should be
by an autonomous required to enter in to a
organisation. Memorandum of Understanding
(d) whether similar functions with the Administrative Ministry
are also being undertaken or Department, spelling out
by other organisations, be it clearly performance parameters,
in the Central Government output targets in terms of details
or State Governments or the of programme of work and
Private Sector, and if so, qualitative improvement in
whether there is scope for output, along with commensurate
merging or winding up the input requirements. The output
organisations under review. targets, given in measurable
(e) whether the total staff units of performance, should
complement, particularly at form the basis of budgetary
the support level, is kept at a support extended to these
minimum: whether the organisations. The roadmap for
enormous strides in improved performance with clear
information technology and milestones should form part of
communication facilities as the MoU.
also facilities for outsourcing (xii) Findings of the peer review
of work on a contract basis, should be examined and put up
have been taken into for appropriate decision to the
account in determining staff Secretary by the concerned
strength; and whether programme division of the
scientific or technical Administrative Department.
personnel are being Further releases of Grant (after
deployed on functions which three or five years, as the case
could well be carried out by may be), should be made
non-scientific or non- conditional on conduct and
technical personnel etc. decisions on the findings of such
(f) whether user charges peer review.
including overhead/ Rule230 (1) Principles and Procedure for award
institutional charges / of Grants-in-aid.
management fee in respect Any Institution or Organisation seeking
of sponsored projects, Grants-in-aid from Government will be

65
required to submit an application which Rule 230 (5) Central Autonomous Organisations
includes all relevant information such as which receive Grants should account for
Articles of Association, bye-laws, audited capital and revenue expenditure
statement of accounts, sources and separately. The Government of India,
pattern of income and expenditure etc. Ministry of Finance has formulated
enabling the sanctioning authority to standard formats for presentation of final
assess the suitability of the Institution or accounts, for all Central Autonomous
Organisation seeking Grant. The Organisations. All Grant sanctioning
application should clearly spell out the authorities should enforce the condition
need for seeking Grant and should be of maintaining and presenting their
submitted in such form as may be annual accounts in the standard formats
prescribed by the sanctioning authority. on all Central Autonomous
The Institution or Organisation seeking Organisations.
Grants-in-aid should also certify that it Rule 230 (6) The Grants sanctioning authorities
has not obtained or applied for grants for should not only take into account the
the same purpose or activity from any internally generated resources while
other Ministry or Department of the regulating the award of Grants but should
Government of India or State consider laying down targets for internal
Government. resources generation by the Grantee
Rule 230 (2) In order to obviate duplication in Institutions or Organisations every
Grants-in-aid, each Ministry or financial year, particularly where Grants
Department should maintain a list of are given on recurring basis every year.
institutions or organisations along with Rule 230 (7) Unspent Balances: When recurring
details of amount and purpose of Grants Grants-in-aid are sanctioned to the same
given to them. These details should also Institution or Organisation for the same
be made available on the website of the purpose, the unspent balance of the
Ministry/Department. previous Grant should be taken into
Rule 230 (3) Award of Grants should be considered account in sanctioning the subsequent
only on the basis of viable and specific Grant. For this purpose, the Programme
schemes drawn up in sufficient detail by Division of Ministries/Department shall
the institution or organisation. The budget take help of PFMS Portal to know the
for such schemes should disclose, inter bank balance of the recipients before
alia, the specific quantified and qualitative making each release. The instructions of
targets likely to be attained against the Department of Expenditure regarding the
outlay. In the cases of the schemes use of PFMS Portal for Central Sector
where Grants are given as part of the Schemes issued from time to time shall
expenditure on reimbursement basis (i.e. be strictly followed by all Ministries/
the expenditure has already been Departments. The principles of ‘just in
incurred on approved project/scheme time release’, should be applied for
and reimbursement from the Government releases in respect of all payments to the
in the form of Grant/Subsidy etc. is due) extent possible. The following broad
the same will be treated as the Central principles shall be adhered to:
Financial Assistance (CFA) and no (i) Cash balance at a time should
Utilization Certificate shall be required in preferably not be more than 3
such cases of reimbursements. months of requirements
Rule 230 (4) Recurring Grant is defined as one (ii) Funds should be released as per
which is released periodically to the same actual requirements and that
organization for the same purpose. Non- sanction may precede the
recurring Grant is one time release to an release of funds, though its
organization for a special purpose (which validity may be limited to that
could be released in installments). Every financial year.
order sanctioning a Grant shall indicate Rule 230 (8) All interests or other earnings against
whether it is recurring or non-recurring Grants in aid or advances (other than
and specify clearly the object for which it reimbursement) released to any Grantee
is being given and the general and institution should be mandatorily remitted
special conditions, if any, attached to the to the Consolidated Fund of India
Grant. In the case of non-recurring immediately after finalisation of the
Grants for specified object, the order shall accounts. Such advances should not be
also specify the time limit within which the allowed to be adjusted against future
Grant or each installment of it, is to be releases.
spent.

66
Rule 230 (9) In making Grants to Non-Government cases relaxation may be made in
or Quasi-Government Institutions or consultation with the Ministry of
Organisations, a condition should be laid Finance.
down that assets acquired wholly or (ii) Grantee Institutions or
substantially out of Government Grants, Organisations should be
except those declared as obsolete and encouraged to take advantage of
unserviceable or condemned in the pension or gratuity schemes
accordance with the procedure laid down or Group Insurance Schemes or
in the General Financial Rules, shall not house buildings loans or vehicle
be disposed of without obtaining the prior loans schemes etc. available in
approval of the authority which the market for employees instead
sanctioned the Grants-in-aid. of undertaking liability on their
Rule 230 (10) The sanctioning authority may own or Government account.
prescribe conditions regarding quantum Rule 230 (13) The sanctioning authority, while
and periodicity for release of Grants-in- laying down the pattern of assistance,
aid in installments in consultation with the may decide whether the ownership of
Financial Adviser. However, the release buildings constructed with Grants-in-aid
of the last installment of the Annual Grant may vest with Government or the
must be conditional upon the Grantee Grantee Institution or Organisation.
Institutions providing reasonable Where the ownership is vested in the
evidence of proper utilization of Government, the Grantee Institution or
installments released earlier. In the cases Organisation may be allowed to occupy
where Central Financial Assistance the building as a lessee. In such cases
(CFA) has been sanctioned, the grant will suitable record of details of location, cost,
be released in one installment upon the name of lessee and terms & conditions of
Grantee Institutions/ Organisation lease must be maintained in the records
providing complete evidence of achieving of the granting Ministry or Department. In
the specified objectives and expenditure all cases of buildings constructed with
incurred supported by Audited Statement Grants-in-aid, responsibility of
of Expenditure. In these cases, the maintenance of such buildings shall be of
grantee institutions will not be required to the Grantee Institution or Organisation.
submit Utilization Certificates. Rule 230 (14) Any other special terms and
Rule 230 (11) In order to finalize the Budgetary conditions or procedures for transaction
Estimates of Grants in aid to the Grantee of business as Government may desire to
Institutions, the Ministry or Department be followed by the Grantee Institution or
should impress upon Institution or Organisation, shall be got incorporated in
Organisation desiring Grants from the Articles of Association or bye-laws of
Government, to submit their requirement the Institution or Organisation concerned
with supporting details by the end of before release of Grants-in-aid.
September in the year preceding the year Rule 230 (15) Grants-in-aid may be sanctioned to
for which the Grants-in-aid is sought. The meet the bonafide expenditure incurred
Ministry or Department should finalize not earlier than two years prior to the date
their examination of the requests with the of issue of the sanction.
utmost expedition and make the Rule 230 (16) The stipulation in regard to refund of
necessary Budget provision where it is the un-utilised amount of Grant-in-aid
decided to sanction Grants. The with interest thereon should be brought
Institution or Organisation should be out clearly in the letter sanctioning the
informed of the result of their requests by Grant as well as in the bond so required
April of the succeeding year. to be executed.
Rule 230 (12) Rule 230 (17) (i) As a precondition to the sanction
(i) All Grantee Institutions or of Grants-in-aid to the agencies where:
Organisations which receive (a) the recipient body employs
more than fifty percent of their more than twenty persons on
recurring expenditure in the form a regular basis and at least
of Grants-in- aid, should fifty per cent of its recurring
ordinarily formulate terms and expenditure is met from
conditions of service of their Grants-in-aid from Central
employees which are, by and Government; and
large, not higher than those (b) the body is a registered
applicable to similar categories of society or a co-operative
employees in Central institution and is in receipt of a
Government. In exceptional general purpose annual

67
Grants-in-aid of Rupees consultation with Internal
twenty lakhs and above from Finance Wing.
the Consolidated Fund of Rule 231 (2) Before a Grant is released, the
India; members of the Executive Committee of
(c) the Grant sanctioning the Grantee should be asked to Execute
authority should ensure that a Bonds in a prescribed format binding
suitable clause is invariably themselves jointly and severally to:-
included in the terms and (i) abide by the conditions of the
conditions under which the Grants- in-aid by the target dates,
Grants-in-aid are given, to if any, specified therein; and
provide for reservation for (ii) not to divert the Grants or entrust
Scheduled Castes and execution of the scheme or work
Scheduled Tribes or OBC in concerned to another
posts and services under Institution(s) or Organization(s);
such organizations or and
agencies. The relative (iii) abide by any other conditions
provision may be on the specified in the agreement
following lines: - governing the Grants-in-aid.
“ … … … … … (Name of (iv) In the event of the Grantee failing
Institution or Organization to comply with the conditions or
etc.)agrees to make committing breach of the
reservations for Scheduled conditions of the Bond, the
Castes and Scheduled Tribes signatories to the Bond shall be
or OBC in the posts or jointly and severally liable to
services under its control on refund to the President of India,
the lines indicated by the the whole or a part amount of the
Government of India”. Grant with interest at ten percent
(ii) While sanctioning Grants-in- per annum thereon or the sum
aid to Institutions or specified under the Bond. The
Organisations referred to in stamp duty for this Bond shall be
(a) above, the Grant borne by the Government.
sanctioning authority should Rule 231 (3) Execution of Bond will not apply to
keep in view the progress Quasi - Government Institutions, Central
made by such Institutions or Autonomous Organisations and
Organisations in employing Institutions whose budget is approved by
Scheduled Castes and the Government
Scheduled Tribes or OBC Rule 232 General Principles for award of
candidates in their services. Grants-in-aid for Centrally Sponsored
Rule 231 (1) Grants-in-aid to “Voluntary Schemes. The following principles
Organisations” Subject to the following should be kept in view by
terms and conditions, Grants-in-aid Ministries/Departments of the Central
towards administrative expenditure may Government at the time of designing
be sanctioned to voluntary organizations Centrally Sponsored Schemes for
to ensure a certain minimum staff implementation in State Governments or
structure and qualified personnel to Union Territories and approving and
improve their effectiveness and expand releasing assistance to State
their activities under the following Governments or Union Territories for
conditions: - such schemes: -
(i) The Grants-in-aid should not (i) Every Centrally Sponsored
exceed twenty-five percent of Scheme should haveatime-
approved administrative bound quantifiable and
expenditure on pay and measurable outcome targets with
allowances of the personnel of provisions for periodic
the voluntary organisation monitoring, mid-term evaluation
concerned; and detailed impact studies.
(ii) Grants-in-aid to meet (ii) The scheme should be designed
administrative expenditure to any in consultation with States and
private institutions other than the Union Territories. States should
voluntary organizations should be delegated adequate powers to
not ordinarily be sanctioned. In change the details of the
exceptional cases such Grants schemes to suit local conditions,
can be considered for sanction in subject to reporting such

68
changes to the concerned suggestions for formulating and
Ministry or Department. implementing future schemes. A
(iii) Where schemes are in operation copy of the review should be
with similar objectives targeting obtained by the Ministry
the same population, the concerned and kept in view while
schemes should be converged. formulating new Centrally
(iv) To ensure monitoring and Sponsored Schemes.
effective control over such Rule 233 Funding of Sponsored Projects or
schemes, the number of Schemes.
schemes should be restricted, so (i) Ministries or Departments of
that the gain from the Government sponsor projects or
expenditure on such schemes is schemes to be undertaken by
maximized. The role of the Universities, Indian Institute of
Central Ministries or Technology and other similar
Departments should be capacity Autonomous Organisations such
building, inter-sectoral as ICAR, CSIR, ICMR etc., the
coordination and detailed results from which are expected
monitoring. to be in national interest.
(v) The release of funds to State Normally the entire expenditure
Governments and monitoring on such projects or schemes
further utilisation should be including capital expenditure, is
undertaken through PFMS. The funded by the Ministry or
Ministries or Departments should Department. The funds released
establish a mechanism to ensure for such projects or schemes in
that the funds earlier released one or more installments are not
have been effectively utilised and treated as Grants-in-aid in the
that the data and facts reported books of the implementing
by the State Governments or agency. Apart from the
Union Territories relating to requirement of submission of
physical and financial technical and financial reports on
performance are correct. Before completion of the project or
releasing further funds, it should scheme, a stipulation should be
also be ensured that the State made in such cases that the
Governments or Union ownership in the physical and
Territories have the capacity to intellectual assets created or
actually spend the balance from acquired out of such funds shall
the previous years and the vest in the sponsor. While the
releases during the current year. Project or Scheme is ongoing,
(vi) The Ministries or Departments the recipients should not treat
should focus attention on the such assets as their own assets
attainment of the objectives and in their Books of Accounts but
not on expenditure only. A should disclose their holding and
mechanism for avoiding release using such assists in the Notes to
of large part of funds towards the Accounts specifically.
end of the year should be (ii) On completion of the Projects or
devised and incorporated in the Schemes and the receipt of
Scheme design itself. technical and financial reports,
(vii) A concurrent monitoring and the Ministries/Departments
evaluation mechanism should be should decide and communicate
built into the Scheme. A periodic to the implementing agencies
review of every Centrally whether the assets should be
Sponsored Scheme should be returned, sold or retained by
undertaken for any required mid- them.
course correction or changes in [Note: In relaxation of the extant
the scheme design provisions of the rule, Scientific
(viii) A post-completion review of Departments are allowed to
every Centrally Sponsored extend the provisions of Rule 233
Scheme should be undertaken (i) & (ii) to private sector / NGOs
by the State Government(s) or who are commissioned to
Union Territories implementing
the scheme, highlighting the time
and cost overruns, if any, and

69
execute projects or schemes.]54 (iii) Information at column (xiii) of the
(iii) If the assets are to be sold, the Form GFR-21 above should be
proceeds therefrom should be used also for regulating the
credited to the account of the subsequent Grants.
sponsoring Department / Rule 235 Accounts of Grantee Institutions.
Organisation. If the assets are Institutions or Organisations receiving
allowed to be retained by the Grants should, irrespective of the amount
Institution/ Organisation, the involved, be required to maintain
implementing agency should subsidiary accounts of the Government
include the assets at the book grant and furnish to the Accounts Officer
value in their own accounts. a set of audited statement of accounts.
Rule 234 Register of Grants. A Register of Grants These audited statements of accounts
shall be maintained by the sanctioning should be required to be furnished after
authority in the format given in Form GFR utilization of the Grants-in-aid or
- 21. whenever called for.
(i) Columns (i) to (v) of the Register Rule 236 (1) Audit of Accounts. The accounts of
in format at Form GFR - 21 all Grantee Institutions or Organisations
should be filled in simultaneously shall be open to inspection by the
with the issue of the order sanctioning authority and audit, both by
sanctioning each Grant. These the Comptroller and Auditor General of
columns should be attested by India under the provision of CAG(DPC)
any Gazetted Officer nominated Act 1971 and internal audit by the
for the purpose by the Principal Accounts Office of the Ministry
sanctioning authority. The serial or Department, whenever the Institution
number should be recorded on or Organisation is called upon to do so
the body of the sanction at the and a provision to this effect should
time the item is entered in the invariably be incorporated in all orders
Register as under: “Noted at sanctioning Grants-in-aid.
Serial No …………………… in Rule 236 (2)
the Register of Grants”. (i) The accounts of the Grantee
(ii) Such a record will guard against Institution or Organisation shall
the possibility of double payment. be audited by the Comptroller
Columns (vi) and (vii) should be and Auditor General of India
filled in and attested by the under Section 14 of the
Gazetted Officer concerned as Comptroller and Auditor General
soon as the bill is ready. The bill of India (Duties, Powers and
should then be submitted to the Conditions of Service) Act, 1971,
Gazetted Officer nominated to if the Grants or loans to the
act as Drawing and Disbursing institution in a financial year are
Officer with the register for not less than Rupees twenty- five
signing the bill and to the lakhs and also not less than
sanctioning authority for giving seventy-five percent of the total
dated initials in column (viii) of expenditure of the Institution. The
Register. It should also be the accounts may also be audited by
duty of the sanctioning authority the Comptroller and Auditor
to verify that the conditions, if General of India if the Grants or
any, attached to the Grant have loans in a financial year are not
been duly accepted by the less than Rupees one crore.
Grantee without any reservation Where the accounts are so
and that no other bill for the same audited by the Comptroller and
purpose has already been paid Auditor General of India in a
before. No bill should be signed financial year, he shall continue
unless it has been noted in the to audit the accounts for a further
Register of Grants against the period of two years
relevant sanction. This will also notwithstanding that the
facilitate watching of payments in conditions outlined above are not
installments, if any, in the case of fulfilled.
lump sum sanctions. (ii) Where any Grant and /or loan is

54
Inserted vide DoE OM No. F.No. 8(1)/2021-E.IIA dated Department of Atomic Energy, Department of Space, Ministry
03.09.2021. The Scientific Ministries/ Departments are of Earth Sciences, Defence Research and Development
Department of Science and Technology, Department of Bio- Organisation.
technology, Department of Scientific and Industrial Research,

70
given for any specific purpose to The Utilization Certificate in respect of
any Institution or Organisation or Grants referred to in Rule230 (10) should
authority, not being a foreign also disclose whether the specified,
State or international quantified and qualitative targets that
Body/Organization, the should have been reached against the
Comptroller and Auditor General amount utilised, were in fact reached, and
is competent under Section 15 if not, the reasons therefor. They should
(1) of the CAG’s (DPC) Act, 1971, contain an output based performance
to scrutinize the procedures by assessment instead of input based
which the sanctioning authority performance assessment. The Utilization
satisfies itself as to the fulfillment Certificate should be submitted within
of the conditions subject to which twelve months of the closure of the
such Grants and/or loans were financial year by the Institution or
given and shall, for this purpose, Organisation concerned. Receipt of such
have right of access to the books certificate shall be scrutinised by the
and accounts of that Institute or Ministry or Department concerned.
Organisation or authority. Where such certificate is not received
Rule 236 (3) In all other cases, the Institution or from the Grantee within the prescribed
Organisation shall get its accounts time, the Ministry or Department will be at
audited from Chartered Accountants of its liberty to blacklist such Institution or
own choice. Organisation from any future grant,
Rule 236 (4) Where the Comptroller and Auditor subsidy or other type of financial support
General of India is the sole auditor for a from the Government.
local Body or Institution, auditing charges Rule 238 (2) In respect of recurring Grants, Ministry
will be payable by the auditee Institution or Department concerned should release
in full unless specifically waived by any amount sanctioned for the
Government subsequent financial year only after
Rule 237 Time Schedule for submission of Utilization Certificate on provisional basis
annual accounts. The dates prescribed in respect of Grants of preceding financial
for submission of the annual accounts for year is submitted. Release of Grants-in-
Audit leading to the issue of Audit aid in excess of seventy five per cent of
Certificate by the Comptroller and Auditor the total amount sanctioned for the
General of India and for submission of subsequent financial year shall be done
annual report and audited accounts to the only after utilisation certificate and the
nodal Ministry for timely submission to annual audited statement relating to
the Parliament are listed below:- Grants-in-aid released in the preceding
(i) Approved and authenticated year are submitted to the satisfaction of
annual accounts to be made the Ministry/Department concerned.
available by the Autonomous Reports submitted by the Internal Audit
Body to the concerned Audit parties of the Ministry or Department and
Office and commencement of Inspection Reports received from Indian
audit of annual accounts-30th Audit and Accounts Department and the
June performance reports if any received for
(ii) Issue of the final SAR in English the third and fourth quarter in the year
version with audit certificate to should also be looked into while
Autonomous Body/ Government sanctioning further Grants.
concerned-31st October [Note: As a special measure Scientific
(iii) Submission of the Annual Report Departments are permitted to release
and Audited Accounts to the subsequent Grants in aid on receipt of
Nodal for it to be laid on the Table UCs confirming utilization of 75% of the
of the Parliament-31st December total value of previous Grant(s) from a
Rule 238 (1) Utilization Certificates. In respect of Grantee Body.]55
non-recurring Grants to an Institution or Rule 238 (3) Utilization certificates need not be
Organisation, a certificate of actual furnished in cases where the Grants-in-
utilization of the Grants received for the aid / CFA are being made as
purpose for which it was sanctioned in reimbursement of expenditure already
Form GFR 12-A, should be insisted upon incurred on the basis of duly audited
in the order sanctioning the Grants-in-aid. accounts. In such cases the sanction

55
Inserted vide DoE OM No. F.No. 1(10)/E.IIA/2015 dated Department of Atomic Energy, Department of Space, Ministry
31.07.2017. The Scientific Ministries/ Departments are of Earth Sciences, Defence Research and Development
Department of Science and Technology, Department of Bio- Organisation.
technology, Department of Scientific and Industrial Research,

71
letters should specify clearly that the Rule 239 State Government to submit
Utilization Certificates will not be Utilization Certificate for Grants-in-aid
necessary. relating to Scheme. When Central
Rule 238 (4) In respect of Central Autonomous Grants are given to State Governments
Organisations, the Utilization Certificate for implementation of Central Scheme,
shall disclose separately the annual Utilization Certificate in format GFR 12-C
expenditure incurred and the funds given may be submitted by the State
to suppliers of stores and assets, to Government in respect of the Scheme.
construction agencies, to staff for (House The UC should be counter-signed by the
Building and Purchase of conveyance) Administrative Secretary of the Division
which do not constitute expenditure at regulating the Scheme/Finance
that stage but have been met out of Secretary.
Grants and are pending adjustments. Rule 240 State Government to submit
These shall be treated as unutilized Utilization Certificate when
Grants allowed to be carried forward. expenditure incurred through local
While recording the Grants in the bodies. When Central Grants are given
subsequent year the amount carried to State Governments for expenditure to
forward shall be taken into account. be incurred by them through local bodies
Rule 238 (5) In the case of Private and Voluntary or private institutions, the Utilization
Organizations receiving recurring Grants- Certificates should be furnished by the
in-aid from Rupees ten lakhs to less than State Government concerned.
Rupees fifty lakhs, all the Ministries or Rule 241 Utilisation Certificate in case of Direct
Departments of Government of India Benefit Transfer (DBT) Scheme. In
should include in their Annual Report a case of the schemes covered under
statement showing the quantum of funds Direct Benefit Transfers (DBT), where the
provided to each of those organizations fund flow is directly from the Central
and the purpose for which they were Government to the beneficiaries, the
utilized, for the information of Parliament. intimation from the bank/National
The Annual Reports and accounts of Payments Corporation of India (Aadhaar
Private and Voluntary Organizations Payment Bridge) regarding deposit of the
receiving recurring Grants-in-aid to the funds in the beneficiaries’ bank accounts,
tune of Rupees fifty lakhs and above generated as per procedure prescribed
should be laid on the Table of the House by the Controller General of Accounts,
within nine months of the close of the may be treated as a Utilization Certificate.
succeeding financial year of the Grantee The Ministry/Department releasing the
Organisations. Grant should keep proper record and
Rule 238 (6) In the case of organizations receiving accounts relating to such direct releases
one-time assistance or non-recurring under DBT to the beneficiaries bank
Grants as Grants-in-aid from Rupees ten accounts.
lakhs to Rupees five crore, all Ministries Rule 242 (1) Performance parameters.
or Departments of Government of India Performance parameters should be
should include in their Annual Reports, clearly set to allow better oversight of the
statements showing the quantum of Autonomous Body.
funds provided to each of these Rule 242 (2) Submission of Achievement-cum-
organizations and the purpose for which Performance Reports.
the funds were utilized, for the (i) The Grantee Institutions or
information of Parliament. The Annual Organisations should be required
Reports and Audited Accounts of Private to submit performance cum
and Voluntary Organizations or societies achievement reports soon after
registered under the Registration of the end of the financial year, and
Societies Act, 1860, receiving one-time in any case, not later than six
assistance/non-recurring Grants of months after the close of the
Rupees Five Crore and above should financial year.
also be laid on the Table of the House, (ii) In regard to non-recurring Grants
within nine months of the close of the such as those meant for
succeeding financial year of the grantee celebration of anniversaries,
Organisations. [Note: Increase in monetary conduct of special tours and
ceiling in laying of Annual Reports and Audited maintenance Grants for
Accounts of various organisations receiving funds
education, performance- cum-
from Govt. of India]56.

56
Inserted vide DoE OM No. F.No.8(5)/2020-E.IIA dated 09.10.2020

72
achievement reports need not be aid are for Rupees five crore or
obtained. more in the case of non-recurring
(iii) In the case of recurring Grants, grants and Rupees fifty lakhs or
submission of achievement-cum- more in the case of recurring
performance reports should grants, the Ministry or
usually be insisted upon in all Departments of the Central
cases. However, in the case of Government should include in
Grants-in-aid not exceeding their Annual Report a review of
Rupees twenty five lakhs, the the utilization of the Grants- in-
sanctioning authority may aid individually, specifying in
dispense with the submission of detail the achievements vis-à-vis
performance- cum- achievement the amount spent, the purpose
reports and should, in that event, and destination of Grants.
refer to the Utilization Certificates [Note: Increase in monetary ceiling in
laying of Annual Reports and Audited
and other information available
Accounts of various organisations
with it to decide whether or not receiving funds from Govt. of India]57.
the Grants-in- aid should (v) Where the accounts of the
continue to be given. Grantee Institutions or
(iv) (a) The Annual Reports and Organisations are audited by the
Audited Statements of Accounts CAG of India copies of the
of Autonomous Organisations performance-cum-achievement
receiving grants of Rupees Two reports, furnished by the grantee
crore and above are required to Institution to the Administrative
be laid on the table of the Ministry or sanctioning authority
Parliament. In such cases, the should be made available to
Ministries or Departments of audit. In other cases copies of
Central Government need not such reports, received by the
incorporate performance-cum- Departments of the Central
achievement reports in the Government or the sanctioning
Annual Reports. authority should be made
(aa)In cases where these available to audit when local
Autonomous Organisations are audit of such Grants-in-aid in the
getting funds less than Rupees Administrative Ministry or
two crore, all the Departments of Department or sanctioning
Central Government should authority is conducted or when it
include in their Annual Report a is called for by the Accountant
Statement showing the quantum General.
of funds provided to each of Rule 243 Discretionary Grants. When an
these organisations and the allotment for Discretionary Grants is
purpose for which they were placed at the disposal of a particular
utilized for the information of the authority, the expenditure from such
Parliament. Grants shall be regulated by general or
special orders of the competent authority
(b) In all other cases, if the specifying the object for which the Grants
Grants-in- aid (a) exceed can be made and any other condition(s)
Rupees ten lakhs but less than that shall apply to them. Such
rupees fifty lakhs in the case of Discretionary Grants must be non-
recurring grants and (b) recurring and not involve any future
exceed Rupees ten lakh but commitment.
less than Rupees five crore in Rule 244 Other Grants. Grants, subventions, etc.,
the case of non-recurring including Grants to States other than
grants, the Ministry or those dealt with in the foregoing rules,
Departments of the Central shall be made under special orders of
Government should include a Government.
statement in their Annual Report Rule 245 (1) Regulation of recurring Grants-in-aid
of their own assessment of the for Government employees’ welfare :–
achievements or performance of a. Grants-in-aid for provision of
the Institution or Organisations. amenities or of recreational or
(c)In cases where the Grants-in-

57
Inserted vide DoE OM No. F.No.8(5)/2020-E.IIA
Dated 09.10.2020

73
welfare facilities to the staff of the amenities is given below:
offices of the Government are i. Articles of sports – Outdoor
regulated under orders of the and indoor games
Ministry of Home Affairs issued from equipment
time to time. The admissibility of the ii. Cost of uniforms, etc.,
Grants-in-aid for the welfare of the supplied to teams of players.
employees of the Government iii. Magazines and periodicals.
should be regulated in the following iv. Entry fee for tournaments
manner :- v. Hiring of playgrounds
(i) The Grant in aid will be admissible vi. Hiring and repair for
on the basis of the total strength furniture, etc.,
borne on the regular strength of an vii. Purchase of furniture.
organization, i.e., Ministry or viii. Conveyance expenses
Department, etc., and its Attached incurred locally.
and Subordinate Offices and such ix. Entertainments.
statutory bodies whose budget x. Prizes.
forms part of Consolidated Fund of xi. Film shows.
India, irrespective of the fact whether xii. Hiring of accommodation for
any individual is a member of the Club/Association, etc.
staff club, etc., or not. However, xiii. Cultural, Sports and
Grant-in- aid in respect of Gazetted Physical development
Officers will be admissible only to programme(s).
that Ministry or Department or Office xiv. Inter-Ministerial meets.
where membership of recreation xv. Inter-Departmental meets
club is open to such officers. (2) A maximum one time Grant of
Staff paid from contingencies, work- Rupees fifty thousand may be
charged staff etc., will not be taken sanctioned for setting up of a
into calculation for this purpose. Recreation Club.
Staff eligible for similar concession (3) Grants-in-aid to the Ministry or
under some other rule or statutory Departments of the Central
provision, e.g., industrial workers will Government and their Attached
also not be covered by these orders. and Subordinate Offices will be
(ii) Amounts of Grants-in-aid. (a) The allocated by the concerned
rate of the Grant-in-aid will be Ministry or Department on receipt
Rupees fifty per head per annum. In of formal requests in the
addition to this, an additional Grant- prescribed manner. For the
in-aid up to Rupees twenty-five per purposes of these Grants-in-aid,
head per annum to match the the Departments of the Central
subscriptions collected during the Government and their attached
previous financial year by the and Subordinate Offices will be
existing staff clubs will be treated as a single unit. It will be
admissible. In the case of staff clubs the responsibility of that Ministry or
which are started during the financial Department to distribute the
year in which Grant-in-aid is to be amount further to its Attached and
given, an additional matching Subordinate Offices and to their
grants- in-aid up to Rupees twenty- different clubs. The accounts of
five per head per annum, to match these clubs for the preceding year
the subscription collected by such duly audited by an Internal Auditor
clubs up to the date on which the should be obtained immediately
proposal for the Grant is mooted, after the close of the financial year
may be sanctioned. The total in any case by the thirtieth April by
strength of the eligible staff will be the Ministry or Department before
that existing on the thirty-first March allocating funds for the next
of the previous financial year or that financial year.
on the date on which proposal for (4) Grants-in-aid for the provision of
Grant is mooted in the case of new amenities or recreational or
staff clubs above rates, as revised welfare facilities to the staff of the
from time to time will apply. Indian Audit and Accounts
(iii) An illustrative list of items on which Department are regulated by
expenditure can be incurred out of separate orders
Grants-in-aid sanctioned by
Government for provision of II. LOANS

74
completely drawn or declared by
Rule 246 The rules in this Section shall be competent authority to be closed.
observed by all authorities competent to (iii) The repayment of loans shall be
sanction loans of public moneys to State effected by installments, which
Governments, Local Administrations of shall ordinarily be fixed on annual
Union Territories, local bodies, foreign basis, and with due dates of
Government on specific recommendation payment being specially
of State Government, Government prescribed.
institutions and other Government (iv) Any installment paid before its
bodies. due date may be taken entirely
Rule 247 (1)Powers and Procedure for sanction towards the principal, provided it
of loans. The powers of Departments of is accompanied by payment
the Central Government and toward interest due up-to-date of
Administrators as well as other actual payment of installment; if
subordinate authorities to sanction loans not, the amount of the installment
are given in the Delegation of Financial shall first be adjusted towards the
Powers Rules and other general and interest due for preceding and
special orders issued under that rule. current periods and the balance,
Rule247 (2)Nodal Division in Ministry of if any, shall alone be applied
Finance. The Budget Division, towards the principal. If,
Department of Economic Affairs, Ministry however, the payment of the
of Finance shall be the nodal division in installment is in advance of the
the Ministry of Finance to finalise terms due date by fourteen days or
and conditions of loans by the Central less, interest for the full period
Government. (half-year or full year, as the case
Rule 248 All sanctions of loans issued by a may be) shall be payable.
Department of Central Government or an (v) When the due date of repayment
Administrator of Union Territory in of any installment of principal or
exercise of their powers under the interest falls on a Sunday or a
relevant provision of Delegation of public holiday, the payment
Financial Powers Rules shall include a made on the next working day
certificate to the effect that the same is in following the Sunday or the
accordance with the rules or principles public holiday, shall be regarded
prescribed by the Ministry of Finance and as payment on the due date and
that the rate of interest on the loan and no interest shall be charged for
the period of repayment thereof have the day or days by which the
been fixed with the approval of that recovery is so postponed.
Ministry. Exception. If an installment of
Rule 249 (1) All sanctions to loans shall be subject principal or interest is payable on
to the Delegation of Financial Powers the thirty-first March of a year,
Rules and shall specify the terms and and if that day happens to be a
conditions relating to them including the public holiday the recoveries
terms and conditions of their repayment shall be made on the immediately
and payment of interest. preceding working day. In case,
Rule 249 (2) Borrowers shall be required to adhere the due date for the repayment of
strictly to the terms settled for the loans a loan or payment of interest falls
made to them. Modifications of these on a holiday observed by the
terms can be made subsequently only for Reserve Bank of India, at which
very special reasons and after seeking the effective credit of the same is
prior concurrence of Ministry of Finance. to take place this shall be shifted
Rule 250 (1) General conditions for regulating to the next working day, except
all loans : All loans shall be regulated by when the due date is thirty-first
the following general conditions :- March.
(i) A specific term shall be fixed (vi) The payment of interest and the
which shall be as short as repayment of principal of a loan
possible, within which each loan are always to be made with
has to be fully repaid with interest reference to the calendar date on
due. The terms may, in very which the loan in question is paid.
special cases, extend to thirty However, where payment of
years. installment is in advance of the
(ii) The term is to be calculated from due date by fourteen days or
the date on which the loan is less, interest for the full year or

75
half year (depending on the repayment of installment of
prescribed mode of recovery) principal in respect of such
shall be charged thereon. In the loans shall fall due on the
case of a loan sanctioned by the thirty-first March of the
Central Government to a State succeeding years and not
Government on or before thirty- on the anniversaries of the
first March of a year, which is calendar date in April on
adjusted in the books of the which inter- Governmental
Reserve Bank of India in the adjustment on account of
month of April but in the accounts such loans was carried out
of the previous year the in the books of the Reserve
installment of principal and/or Bank of India.
interest shall fall due for payment (b) Where no monetary
on the thirty- first March of the settlement is involved. In
succeeding year and not on the regard to cases where
anniversaries of the calendar adjustment in the books of
date in April on which the inter- the Accounts Offices are
Governmental adjustment was only involved and actual
carried out. credit through the Reserve
(vii) The date of drawal of a loan by a Bank of India is not
State Government shall be necessary, the last date of
determined as indicated below – the month of account in
(a) When monetary which the adjustment is
settlement is involved- effected shall be taken as
Normally the calendar date the date of drawal of loan for
on which amount of a loan is purposes of repayment and
actually credited to the charging interest.
account of the State (viii) In order to avoid any default in
Government by the Reserve the payment of loan, the Principal
Bank is to be treated as the Accounts Officers or Pay and
date of its drawal. Accounts Officers who maintain
This position shall also hold the detailed accounts of loans,
in cases where adjustment shall issue notices in Form GFR-
in accounts is made in one 19 to the loanees (other than
month but date of State and Union Territory
adjustment in the books of Governments) i.e. Public Sector
the Reserve Bank of India Undertakings, statutory bodies
falls in the following and Government institutions etc.,
calendar month. The say, a month in advance of the
calendar date on which the due date for the repayment of
credit is actually afforded to any instalment of the principal
the State Government in the and/ or interest thereon.
books of the Reserve Bank However, omission to give notice
of India in such cases shall does not give the loanees any
be treated as the date of its claim to exemption from the
drawal. consequences of default in the
Exception. An exception to repayment of the principal and/or
this arrangement is in the interest thereon.
case of loans for which Rule 250 (2) Before sanctioning a loan to private
credit is afforded to the Institutions the lending Ministry or
recipient State Government Department shall examine the financial
in the month of April by the health and managerial ability of such
Reserve Bank of India but in institutes.
the accounts of previous Rule 250 (3) (i) Before considering a loan
year. In such cases, a loan application from parties other than State
shall be deemed to have Governments and Local Administrations
been paid on the thirty-first of Union Territories, the following
March of the financial year in requirements shall be fulfilled:-
the accounts for which the (a) it shall be seen that there is
payment is adjusted. adequate budget provision;
Consequently, payment of (b) it shall be seen whether the
annual interest as also grant of the loan is in

76
accordance with approved cent. above the amount of the loan. If
Government policy and possible, an independent valuation of the
accepted patterns of security offered shall be obtained. The
assistance. applicant for the loan must satisfy both
(ii)Before approving the loan, the the criteria for financial soundness and
applicant shall be asked to furnish the adequacy of security before a loan is
following materials and information:- sanctioned.
(a) copies of profit and loss (or (iv) In the case of Institutions which
income and expenditure) receive Grants-in-aid from Government
accounts and balance sheets to meet a part of their deficits and the
for the last 3 years; balance is met by the State Government
(b) the main sources of income and the Trustees of Management, it shall
and how the loan is proposed be ensured–
to be repaid within the (a) that in computing the deficit
stipulated period; for purpose of the Grant-in-
(c) the security proposed to be aid, the income from the
offered for the loan together scheme, if any, earmarked for
with a valuation of the security servicing the loan and the
offered by an independent instalment of repayment of
authority and a certificate to the loan and interest (if any) is
the effect that the asset not included;
offered as security is not (b) that as far as possible, the
already encumbered. scheme for which the loan is
(d) Details of loan or loans taken given is self-financing and
from the Central Government does not throw an additional
or a State Government in the burden on the general income
past, indicating amount, of the institutions, e.g., in the
purpose, rate of interest, case of hostels for colleges
stipulated period of that the rents proposed are
repayment, date of original adequate;
loan and amount outstanding (c) the Institution produces an
against the loan(s) on the date undertaking from the State
of the application and the Government or the
assets, if any, given as Management that any
security; shortfall towards repayment
(e) a complete list of all other of the loan and interest shall
loans, outstanding on the date be made good by it. In the
of application and the assets latter case the financial
given as security against position of the Management
them; (Trust) shall be investigated
(f) the purpose for which the loan after calling for information on
is proposed to be utilized and the lines of Rule 250. (3) (i)
the economics of the scheme. above.
NOTE. Where the loan is to be given to (v) Ministries or Departments of the
Government institution on the strength of Central Government shall lay down a
a guarantee given by the trust managing procedure for periodical review of the old
it, similar information should be called for loans so that prompt action can be taken,
in respect of the trust also. if necessary, for enforcing regular
(iii)On receipt of the information called for payments.
as mentioned in (ii) above, confidential Rule 250 (4) The detailed procedure to be followed
enquiries shall be made from the other in connection with the Grant of loans to
Departments of the Central Government local bodies shall be regulated by the
or State Governments from which the provisions of the Local Authorities Loans
party has taken loans, to judge the Act and other special Acts and by rules
performance in regard to the previous made thereunder.
loans. If the replies indicate that the Rule 251 (1) Interest on Loans.
performance was not satisfactory, the Interest shall be charged at the rate
loan shall be refused. It must be analysed prescribed by the Government for any
that the financial position of the party is particular loan or for the class of loans
sound. It shall also be ensured that the concerned.
security offered is adequate and its value Rule 251 (2) A loan shall bear interest for the day
is at least thirty-three and one-third per of payment but not for the day of

77
repayment. Interest for any shorter period Government at any time to call for
than a complete year shall be calculated accounts of the applicant relating
as follows, unless any other method of to any accounting year with power
calculation is prescribed in any particular to depute an officer specially
case or class of cases. authorized for this purpose to
Number of days X Yearly rate of interest inspect the applicant’s books, if
------------------------------------------------- necessary.
365 (366 in case of a leap year) (ii) A written undertaking in Form GFR
Rule 252 (1) Procedure to be followed for 15 shall be obtained from a wholly
recovery of loans and interest thereon Government-owned company at
and Grant of moratorium. The the time of sanctioning the loan.
instructions issued by the Ministry of The sanction shall specifically
Finance from time to time prescribing the state that such an undertaking
interest rates and other terms and would be obtained from the loanee
conditions of loans to State and Union before the drawal of the amount of
Territory Governments, Local Bodies, loan and a certificate that the
Statutory Corporations, financial, undertaking has been obtained,
industrial and commercial undertakings in shall be recorded by the Drawing
the Public Sector shall be strictly Officer of the office of the
followed. sanctioning authority in the bill for
Rule 252 (2) The recovery of loans shall ordinarily drawal of the amount of loan. The
be effected in annual equal installments sanction in respect of loans to
of principal together with interest due on other organizations, where a
the outstanding amount of principal from formal agreement is required to be
time to time. The repayment and interest executed, shall also be issued in
installments may be rounded off to the the same manner.
nearest rupee subject to final adjustment Rule 254 Undertaking to be obtained from
at the time of payment of last installment wholly - owned Government
of principal and/or interest. Companies.
Rule 252 (3) A suitable period of moratorium In the case of loans to wholly-owned
towards repayment might be agreed to in Government Companies, a written
individual cases having regard to the undertaking to the effect that the fixed
projects for which the loans are to be assets of the company shall not be
utilized. However, no moratorium shall hypothecated without prior approval of
ordinarily be allowed in respect of interest the Government shall be obtained in
payable on loans. Form GFR 32. No stamp duty need be
Rule 253 (1) Loans to State and Union Territory paid on these written undertakings.
Governments, Local Bodies, Statutory Rule255 Loans to parties other than State
Corporations, Public Sector Governments, wholly owned Government
Undertakings, etc. Loans shall ordinarily Companies and Local Administration of
be sanctioned at the normal rates of Union Territories shall be sanctioned only
interest prescribed by Government for the against adequate security. The security
particular category of the loanee. In to be taken shall ordinarily be at least
cases where the normal rate is thirty- three and one-third per cent. more
considered too high and a concession is than the amount of the loan. However, a
justified, it shall take the form of direct competent authority may accept security
subsidy debitable to the grants of the of less value for adequate reasons to be
sanctioning authority. In such cases recorded.
interest shall, however, be paid by the Rule 256 (1) Submission of Utilization
borrower in the first instance at the Certificate, Reports, Statements, etc.
normal rates and subsidy shall be In cases in which conditions are attached
claimed separately. to the utilization of loan, either in the
Rule 253 (2) Agreements and other shape of the specification of the particular
documentation. objects on or the time within which the
(i) In the case of loans to parties other money must be spent or otherwise, the
than State Governments and authority competent to sanction the loan
wholly owned Government shall be primarily responsible for
Companies, a loan agreement certifying to the Accounts Officer where
specifying all the terms and necessary, the fulfillment of the
conditions shall be executed. A conditions attaching to the loan, unless
clause shall invariably be inserted there is any special rule or order to the
in all such agreements enabling contrary. The loans sanctioned to the

78
State Governments and the Local consolidated Utilization
Administration of Union Territories shall Certificate shall be furnished to
not, however, come within the purview of Audit by the
this rule. Ministries/Departments
Rule 256 (2) sanctioning the loans to
(i) The certificate referred to in Rule Institutions / Organisations for
256above shall be furnished as in the total amount of the loans
Form GFR 12-B and at such disbursed during each year for
intervals as maybe agreed to different purposes including the
between the Audit Officer and/or loans sanctioned by their
the Accounts Officer, as the case subordinate officers. This
may be, and the Ministry or certificate shall not cover the
Department concerned. Before loans to individuals for which
recording the certificate, the Utilization Certificates need not
certifying officer shall take steps be furnished to the Accounts
to satisfy himself that the Officer. The Certificate shall
conditions, on which the loan was indicate the year-wise and
sanctioned, have been or are object-wise break-up of loans
being fulfilled. For this purpose, disbursed and the loans for which
he may require the submission to Utilizations Certificates are
him at suitable intervals of such furnished. The utilization
reports, statements, etc., which certificate shall also show the
shall establish the utilization of loans disbursed separately for
loan for the purpose for which it each sub-head of account to
was sanctioned. The loanee facilitate verification by the
institution may also be required Accounts Officer.
to furnish a certificate from its (v) The Utilization Certificates shall
Auditors that the conditions be furnished within a ‘reasonable
attaching to the loan have been time’ after the loan is paid to the
or are being fulfilled. The institutions. The Department of
certificate shall give details of the Central Government shall
breaches, if any, of those prescribe, in consultation with the
conditions. Ministry of Finance, target dates
(ii) A Certificate of Utilization of the for the submission of the
loan shall be furnished to the Utilization Certificates by the
Accounts Officer in every case of Department concerned to the
loan made for specific purposes, Accounts Officer. The target date
even if of the any conditions is not shall, as far as possible, be not
specifically attached to the grant. later than eighteen months from
Such certificates are not, the date of sanction of the loan.
however, necessary in cases (vi) In respect of loans, the detailed
where loans are sanctioned not accounts of which are maintained
for any specific purpose or object by Departmental Officers and
but take the shape of a temporary where consolidated Utilization
financial aid or where the loans Certificates are to be furnished to
have been sanctioned to the Accounts Officer, the period of 18
Public Sector Undertakings months shall be reckoned from
intended for financing of their the expiry of the financial year in
approved capital outlays. The which the loans are disbursed.
repayment of loan, however, has The consolidated Utilization
to be watched in the usual Certificates in respect of such
manner. loans paid each year shall,
(iii) In respect of loans the detailed therefore, be furnished not later
accounts of which are maintained than September of the second
in the Audit Offices, the succeeding financial year.
authorities sanctioning the loan (vii) The due dates for submission of
shall furnish the Utilization the Utilization Certificates shall
Certificate in respect of each be specified in the letter of
individual case. sanction for loan. The target date
(iv) Where the detailed accounts of as specified shall be rigidly
the loans are maintained bythe enforced and extension shall only
Departmental authorities, a be allowed in very exceptional

79
circumstances in consultation Territory Governments and the loan
with the Ministry of Finance sanctions or undertakings or agreements
under intimation to the Audit in case of wholly Government owned
Officer and/or the Accounts companies or Public Sector Undertakings
Officer, as the case may be. No shall invariably include provision for the
further loans shall be sanctioned levy of penal interest on overdue
unless the sanctioning authorities installments of interest or principal and
are satisfied about the proper interest. The loan sanctions and
utilization of the earlier loan agreements in all other cases shall
sanctioned to an Institution, etc. invariably stipulate a higher rate of
Rule 257 Installments of Loans. When a loan of interest and provide for lower rate of
public money is taken out in installments, interest in the case of punctual payments.
each installment of the loan so drawn The penal or the higher rate of interest,
shall be treated as a separate loan for as the case may be, shall not, except
purposes of repayment of principal and under special orders of Government, be
payment of interest thereon except where less than two and half per cent per annum
the various installments drawn during a above the normal rate of interest
financial year are, for this purpose, prescribed by Government from time to
allowed to be consolidated into a single time for the loans advanced.
loan as at the end of that particular Rule 258 (2) Any default in the payment of interest
financial year. In the latter event, simple upon a loan or in the repayment of
interest at the prescribed rate on the principal, shall be promptly reported by
various loan installments from the date of the Accounts Officer, to the authority
drawal of each installment to the date of which sanctioned the loan. The
their consolidation shall be separately responsibility of the Accounts Officer,
payable by the borrower. Repayment of under this rule refers only to the loans, the
each loan or the consolidated loan, as the detailed accounts for which are kept by
case may be, and the payment of interest him.
thereon shall be arranged by the Rule 258 (3) Procedure to be followed in case of
borrower annually on or before the defaults in repayment of interest free
anniversary date of drawal or loans or loans sanctioned at
consolidation of the loan in such number concessional rates of interest:
of installments as the sanctioning (i) In the case of grant of interest
authority may prescribe. The sanctioning free loans e.g., loans to technical
authority may allow, in deserving cases a educational institutions for
moratorium towards repayment of construction of hostels, prompt
principal but not for the payment of repayment shall be made a
interest. Should it appear that there is an condition for the grant of interest
undue delay on the part of the debtor in free loans. The sanction letter in
taking out the last installment of a loan the such cases shall provide that in
authority sanctioning the loan may at any the event of any default in
time declare that loan closed, and order repayment, interest at rates
repayment of capital to begin. The prescribed by Government from
Accounts Officer shall bring to notice any time to time will be chargeable on
delay that appears to him to require this the loans.
remedy and he shall take this step (ii) In the case of loans sanctioned at
whether or not there are any dates fixed concessional rates of interest the
for taking of installments. difference between the normal
NOTE1. These instructions are rate and concessional rate), shall
applicable mutatis mutandis to loans, the be made conditional upon prompt
repayments of which are made by other repayments of principal and
than annual installments. payment of interest thereon by
NOTE 2. It must be remembered that the the entity concerned.
calculation fixing the amount of equal (iii) In the cases where in addition to
periodical installments, by which a loan is interest free loans, subsidy is
repaid with interest, presupposes also provided to meet running
punctual payment of the installment and expenses the sanction letter shall
that, if any installment is not punctually provide that in the event of any
repaid, the interest amount shall need to default in repayment, the
be recalculated. defaulted dues would be
Rule 258 (1) Defaults in Payment. The loan recovered out of the subsidy
sanctions in favour of State or Union payable.

80
contain departmental authority-wise
aggregate balances of outstanding loans.
Rule 258 (4) On receipt of a report of default Rule 263 (1) Review of Annual Statements with
referred to in sub-rule (2) above, the a view to enforce repayments of the
authority concerned shall immediately principal and interest due.
take steps to get the default remedied The Administrative Ministries shall keep
and also consider enforcement of penal watch over the receipt of the Annual
or higher rate of interest on the overdue Statements in Form GFR 20 regularly
amounts. Where the sanctioning from the Accounts Officer and conduct a
authority is satisfied, having regard to the close review of the cases of defaults in
circumstances of the case, that penal or repayment of the installments of principal
higher interest need not be recovered, and/or interest due, as revealed from
the borrower shall ordinarily be asked to these Annual Statements and take
pay interest, at the normal rate prescribed suitable measures for enforcing
in the loan sanction, on the overdue repayments of the principal and interest
amount (of principal and/or interest) from due. If these statements are not received
the due date of payment up to the date of in time, the Accounts Officer shall be
settlement of the default. The recovery of reminded promptly. To facilitate a proper
additional interest shall not be waived review of the position of outstanding
except in special circumstances or where loans, the Ministries may also arrange to
the period of defaults is very short, e.g., a maintain centrally a list of all sanctions
few days. issued relating to loans advanced to
Rule 259 Irrecoverable Loans. A competent State Governments and other entities.
authority, after prior approval of the Rule 263 (2) Submission of Annual Assessment
Ministry of Finance may remit or write off Report.
any loans owing to their irrecoverability or A copy of Annual Assessment Report on
otherwise. status of all outstanding loans, including
Rule 260 Accounts and Control. Subject to such timely and accurate payment of principal
general or specific directions as may be and interest due, shall be submitted by
given by the Comptroller and Auditor- the Financial Advisor of the
General in this behalf, detailed accounts Administrative Ministry concerned to the
of loans to Institutions and Organizations, Ministry of Finance by 30th June of each
etc., shall be maintained by the Accounts financial year.
Officer who shall watch their recovery
and see that the conditions attached to
each loan are fulfilled.
Rule 261 The instructions contained in this Chapter
relating to cost of audit of Grants-in-aid
are applicable Mutatis mutandis in the
case of loans as well.
Rule 262 Annual Returns.
Each Principal Accounts Officer shall
submit to the concerned Ministry or
Department of Government, a statement
in Form GFR 13 showing the details of
outstanding Central Loans borne on his
books as on thirty-first March each year.
This statement shall be submitted not
later than the following thirtieth
September and shall indicate the
aggregate of outstanding balance of
loans, details of defaults, if any, in
repayment of principal and/ or interest
and the earliest period to which the
default pertains, against each State or
Union Territory Government, foreign
Government, Railway or Department of
Posts funds, Central Public Sector and
other Government Institutions etc.
Where, however, detailed accounts are
not required to be maintained by the
Accounts Office, the statement shall

81
Ch.-10 - BUDGETING AND ACCOUNTING OF
EXTERNALLY AIDED PROJECTS
Rule 264 (1) Implementation of Projects or external sources shall be accounted for
Schemes through external aid receipt. only by the office of Controller of Aid
The projects or schemes of the Accounts and Audit, Department of
Government of India to be implemented Economic Affairs.
through external aid receipt from Rule 267 Procedure for withdrawal. The
multilateral or bilateral funding agencies concerned administrative Ministries or
shall be shown in the budget proposals Departments shall be required to make
approved annually by the Parliament. provision of funds under the relevant
Rule 264 (2) The external aid comes from bilateral head of account as ‘External Aided
and multilateral sources as follows: Component’ in their Detailed Demands
(i) Bilateral funding to finance for Grants for release of external aid
specific project(s) by the funding amounts during the year to the respective
agency(ies) under Government Project Implementing Agencies. There
to Government agreement(s); are mainly two procedures laid down for
and, withdrawal of funds from the loan or grant
(ii) Multi-lateral funding by Multi- account:
Lateral Funding Agencies, such Rule 267 (1) Reimbursement procedure. Under
as the World Bank under the reimbursement procedure the Project
agreement(s) between the Implementing Agency shall initially spend
borrower (Government of India) or incur expenditure and subsequently
and the Multilateral Funding claim the amount from the Funding
Agency(ies). Agency through the office of the
Rule 264 (3) The Department of Economic Affairs, Controller, Aid Accounts. The
Ministry of Finance as the nodal agency remittances shall be accounted as
shall execute the legal agreement for External Loan or Grant receipt in the
loans or grants from external funding Consolidated Fund of India. There are
Agency(ies). However, grant agreements two ways of dealing with the
for Technical Assistance can also be reimbursement claims as given below:
executed by the beneficiary Ministries or (i) Reimbursement through
Departments with the approval of Ministry Special Account (Revolving
of Finance, Department of Economic Fund Scheme). Under the
Affairs. Revolving Fund Scheme, the
Rule 264 (4) The Office of the Controller of Aid Funding Agency disburses the
Accounts and Audit (CAAA) in the estimated expenditure of four
Department of Economic Affairs, Ministry months for the projects as initial
of Finance shall be responsible for advance to Government of India
implementing the financial covenants laid under the respective loan or
down in the agreement(s) executed by credit or grant agreement. Office
Department(s) of Government of India of Controller of Aid Accounts &
and the External Funding Agency(ies). A Audit withdraws the amount
copy of all such agreements shall be sent specified in the agreement as
to the Office of Controller, Aid Accounts initial deposit from the Funding
and Audit, Department of Economic Agency, by sending a simple
Affairs for this purpose. withdrawal application in the
Rule 265 Currency of external aid. prescribed format after the loan is
The external aid shall flow from the declared effective. Such initial
Funding Agency in foreign currency or deposit designated in US Dollars
Indian Rupees and shall be received by is received by Reserve Bank of
the Reserve Bank of India, Mumbai which India, Mumbai and Rupee
shall remit the rupee equivalent to the equivalent shall be passed on to
account of Controller, Aid Accounts and Controller of Aid Accounts &
Audit, Department of Economic Affairs at Audit through Government
Reserve Bank of India, New Delhi. The Foreign Transaction (GFT)
remittances shall be accounted as advice. However, Reserve Bank
external loan/Grant receipts in the of India, Mumbai shall maintain a
Consolidated Fund of India. loan wise proforma account for
Rule 266 Accounting of Cash grants. Cash liquidation of advance received
grants, as distinct from commodity grant from Funding Agency. Office of
or other assistance in kind received from Controller of Aid Accounts and

82
Audit, on receipt of the payment made. Office of Controller of
reimbursement claims from Aid Accounts and Audit shall work out the
Project Implementing Agency, rupee equivalent of the foreign currency
shall send an advice to Reserve payment. This rupee equivalent shall be
Bank of India, Mumbai advising it recovered by office of Controller of Aid
to debit the Special Account with Accounts and Audit from the Project
the US Dollars equivalent of the Implementing Agencies or State
amount of the eligible claim. Governments which have availed of the
Office of Controller, Aid Accounts Direct Payment Procedure.
and Audit shall consolidate all Note: In the case of Central Projects,
such claims and submit to Centrally Sponsored Projects and Public
Funding Agency for Sector or Financial Institutions, the
replenishment of Special concerned administrative Ministry or
Account. This shall be Department shall release the fund to the
accompanied by a statement of Project Implementing Agency with the
debits and credits made during instruction to deposit rupee equivalent of
the period by Reserve Bank of the foreign currency that have been
India, Mumbai and supporting availed of under Direct Payment
documents received from the Procedure by them to the account of
Project Implementing Agency. Controller of Aid Accounts and Audit at
(ii) Reimbursement outside Reserve Bank of India, New Delhi or
Special Account: Under the Branch of SBI so authorised.
reimbursement procedure Rule 268 (1) Fund Flow for State Projects
(where there is no provision in financed from external aid source. The
the loan or credit agreement for respective Departments of the State
the Special Account or the Government shall provide in the Budget
balance in the Special Account is such expenditure proposed to be incurred
‘Nil’) office of Controller of Aid under Plan Schemes during the financial
Accounts and Audit shall send year by the Project Implementing
the reimbursement claims Agencies. These shall be in respect of
received from the Project State projects to be financed from
Implementing Agency direct to external aid sources both under loan or
the Funding Agency after credit and grants and eligible for
checking the eligibility aspect. disbursement from Funding Agency
The Funding Agency shall under Reimbursement or Direct Payment
disburse the eligible expenditure Procedure.
to the borrower’s account with Rule268 (2) Fund flow for State Projects under
Reserve Bank of India, Mumbai, Reimbursement Procedure. The
who shall pass on the Rupee disbursements under the
equivalent to the account of the “Reimbursement through Special
Controller of Aid Accounts and Account” and “Reimbursement outside
Audit at Reserve Bank of India, Special Account”, referred to in Rule
New Delhi by issue of 267(i), shall be consolidated at periodical
Government Foreign Transaction intervals under each loan or credit State-
(GFT) advice. wise by the office of the Controller of Aid
Rule 267 (2) Direct Payment Procedure. Under Accounts and Audit. The details of the
this procedure adopted in some cases same shall be sent to Plan Finance
the Funding Agency, on the request of Division of the Department of
the Project Implementing Agency Expenditure in the Ministry of Finance for
(received through Controller of Aid release of funds to the respective State
Accounts and Audit), duly supported by Governments. The Plan Finance division
relevant documents, shall directly pay to of Department of Expenditure in the
the contractor or supplier or consultant Ministry of Finance shall issue sanctions
from the loan or credit or grant account. for actual release of the disbursement for
The Funding Agency, after satisfying each State. A copy of such sanction shall
itself as to the eligibility of the expenditure be endorsed to the Finance Department
etc. remits the amount directly to the of the concerned State Government for
account of the payees as per the information. The office of the Chief
payment instructions. The Funding Controller of Accounts, Ministry of
Agency apprises the office of Controller Finance shall issue the Inter-Government
of Aid Accounts and Audit and the Project (IG) Advice to Reserve Bank of India,
Implementing Agency of the particulars of Central Accounts Section, Nagpur, for

83
effecting the release to the concerned Project Implementing Agency within six
State Governments. The account of the weeks by the administrative Ministry or
State Government maintained at Reserve Department with reference to expenditure
Bank of India, Central Accounts Section, incurred by the Project Implementing
Nagpur, shall be credited with the amount Agency.
so released, thus, completing the cycle of Rule 270 Fund flow for Public Sector or
funds from the expenditure incurred from Financial Institutions. When the Project
the Budget of the State till receipt of funds Implementing Agency under Loan or
of such expenditure from Government of Credit Agreement is a Public Sector or
India to the State. Financial Institution or Autonomous Body
Rule 268 (3) Fund flow for State Projects under and Government of India is the Borrower,
Direct Payment Procedure. Under the Administrative Ministry concerned
Direct Payment Procedure the claims shall provide in its budget funds required
shall be processed as mentioned in Rule to be passed on to the Project
267 (ii). Office of Controller of Aid Implementing Agency for the expenditure
Accounts and Audit shall work out the incurred by the latter under the externally
Rupee equivalent of such Direct Payment aided project. The Project Implementing
based on Reserve Bank of India buying Agency shall submit claims under
rate applicable for the value date on reimbursement or direct payment
which the Direct Payment was made. procedures to the office of the Controller
Office of Controller of Aid Accounts and of Aid Accounts and Audit, Department of
Audit shall consolidate such Economic Affairs. The disbursement of
disbursement in Rupees, and send a list the claims by the Funding Agency shall
of such disbursement State- wise to Plan be similar as explained in Rule 267. The
Finance Division of Department of concerned administrative Ministry or
Expenditure at periodical intervals Department releases the amount to
requesting them to release the amount to Project Implementing Agency based on
the State concerned notionally and the certification of disbursement received
recover the same for credit to Controller from the Funding Agency as certified by
of Aid Accounts and Audit’s account. The the office of the Controller of Aid
Plan Finance Division shall issue a Accounts and Audit.
separate sanction for the amount to be However, where the loan is negotiated
released to the State concerned and for directly by a particular Public Sector
simultaneous recovery and credit back to Undertaking or Financial Institution, the
the account of the Controller of Aid funds from the Funding Agency shall flow
Accounts and Audit. A copy of such direct to the borrowing entity.
sanction shall also be endorsed to the Rule 271 Repayment of loans. Office of Controller
Finance Department of the State of Aid Accounts and Audit shall be
Government concerned. The office of the responsible for prompt repayment of
Chief Controller of Accounts, Ministry of principal on the due date as per the
Finance shall advise Reserve Bank of agreements. The remittance of foreign
India, Central Accounts Section, Nagpur, currency is arranged through designated
for making necessary adjustment entries Public Sector Commercial Banks and
in the accounts of the State concerned Reserve Bank of India. The Rupee
under intimation to the Finance equivalent and the amount of foreign
Department of the State and Controller of currency remitted shall be intimated by
Aid Accounts and Audit. This completes the Banks to Controller of Aid Accounts
the cycle of funds flow in the case of and Audit. The Rupee equivalent of the
direct payment claims. foreign currency remitted is credited to
Rule 269 Fund flow for Central or Central the respective Banks’ account
sponsored Projects. Under the Central maintained at Reserve Bank of India,
or Central sponsored project financed New Delhi, by debit to Controller of Aid
from external aid, whether loan or grant, Accounts and Audit’s account as per
the process of disbursement of such standing arrangement. On the receipt of
claims by the Funding Agency shall be the advice from Reserve Bank of India,
the same as explained in Rule 267. The New Delhi, Controller of Aid Accounts
respective Ministry or Department get and Audit shall debit the concerned loan
EAP funds under a separate budget head account in the Consolidated Fund of
when Demands for Grants are passed in India. The repayment of loans shall be
the Parliament and advised by the classified as charged expenditure. In
Budget Division of the Ministry of cases where the funds from externally
Finance. The funds shall be released to aided Projects are further passed on as

84
loans, the recovery of the loan along with
interest shall be the responsibility of the
respective administrative Ministry or
Department.
Rule 272 Interest Payments. Interest on external
loans shall be paid on the due date as
stipulated in the loan or credit
agreements against the budget provision
made for this purpose. Interest payments
shall be accounted for as debit under the
Major Head ‘2049-Interest Payments’ for
external loans in the Consolidated Fund
of India. The procedure for transfer of
amount shall be the same as followed in
the case of repayment of loans, referred
to in Rule 271 above. The interest
payment shall be classified as charged
expenditure.
Rule 273 Accounting of exchange variation. The
exchange variation in respect of foreign
loans that have been fully repaid shall be
adjusted written off to “8680-
Miscellaneous Government Accounts -
Write off in terms of Government
Accounting Rules and the procedures
prescribed by CGA in consultation with
CAG.
Rule 274 Aid in form of materials and
equipment. In cases where materials,
equipment and other commodities,
without involving any cash inflow, are
received as aid from foreign countries,
the Funding Agency issues an advice to
the concerned Ministry or Department
giving details of materials supplied along
with the value thereof. The Ministry or
Department concerned in turn shall
intimate the details to the office of the
Controller of Aid Accounts and Audit,
Department of Economic Affairs for
making the budget provision in regard to
aid material or equipment.
Note: Refer to Para 4.8.1 of Civil
Accounts Manual and Note (1) below
Major Head ‘3606-Aid Materials and
Equipments’ of List of Major and Minor
Heads of Account of Union and States for
detail procedure of adjustment of value of
the materials etc. received

85
Ch.-11 - GOVERNMENT GUARANTEES

Rule 275 (1) Power to Give and Limits on manner as a proposal for loan.
Government Guarantees. The power of While examining the proposal the
the Union Government to give following considerations shall be
guarantees emanates from and is subject kept in view:-
to such limits as may be fixed in terms of (a) Public interest which the
Article 292 of the Constitution of India, the guarantee is expected to
Fiscal Responsibility and Budget serve.
Management Act and Rules framed there (b) Credit worthiness of the
under as amended from time to time. borrower to ensure that no
Rule 275 (2) In terms of the Fiscal Responsibility undue risk is involved.
and Budget Management Act and Rules (c) Terms of the borrowing shall
framed thereunder, the Central take into account the yields
Government shall not give guarantees as applicable on
aggregating the amount prescribed Government paper of similar
therein. maturity.
Rule 275 (3) Powers to grant Government of India (d) The conditions prescribed in
Guarantee, including those on external the guarantee
borrowings, vests with the Budget order/agreement in order to
Division, Department of Economic Affairs ensure continued credit
(DEA). worthiness of the borrower.
Rule 276 Objectives of Government (iii) Risk associated with assumption
Guarantees: The sovereign guarantee is of a new contingent
normally extended for the purpose of liability/guarantee proposal,
achieving the following objectives: including the probability of future
(i) To improve viability of projects or payouts should be thoroughly
activities undertaken by central assessed by the concerned
entities with significant social and Administrative
economic benefits; Ministry/Department or Credit
(ii) To enable central public sector Divisions of Department of
companies to raise resources at Economic Affairs recommending
lower interest charges or on more the proposal. Such assessment
favourable terms; should ideally be entrusted to an
(iii) To fulfill the requirement in cases independent unit and should be
where sovereign guarantee is a undertaken even when it has
precondition for concessional already been decided by a higher
loans from bilateral/ multilateral authority to provide guarantees.
agencies to central public sector The assessment should reveal
companies/agencies. an accurate picture of the
Rule 277 Guidelines for grant of Government of financial condition of the entity to
India Guarantee: The following be guaranteed; risks associated
guidelines should be followed by the with implementation of the
Ministries or Departments of the project/ scheme, etc. This
Government of India for recommending information would be useful to
guarantee or counter guarantee.— estimate the funds needed to
(i) A proposal for guarantee by meet associated contingent
Government must be justified in liabilities if the need should arise,
public interest such as in the in current or future budgets.
case of borrowings by central (iv) After examination in the
public sector institutions for concerned Ministry or
approved development purposes Department or Credit Division of
or borrowings by central public DEA, all proposals for extending
sector undertakings from Banks guarantees shall be referred to
for working capital and other Budget Division, DEA for
purposes. approval. No guarantees shall be
(ii) The Administrative Ministry/ given without the approval of
Department or the credit Budget Division, DEA.
Divisions of Department of (v) With a view to enable the Ministry
Economic Affairs shall examine of Finance to examine cases of
the proposal in consultation with Government of India guarantees
the Financial Adviser in the same and extension thereto, all

86
Ministries or Departments should Government etc. Even if fee,
furnish to that Ministry, data of representation and mortgage are
certain operational parameters of not considered necessary, the
the Public Sector Undertaking or right to verify the continued
Entity, as given in GFR26. In credit–worthiness of the borrower
case the accounts of the Central should be ensured.
Public Sector Undertaking or (xiii) Guarantees may not be
Entity have been audited by the proposed for pursuing low priority
Comptroller & Auditor General of objectives or programmes.
India, the effect of the comments Proposal for grant of guarantee
of the Comptroller & Auditor as an off-budget support should
General of India on the Central also be examined
Public Sector Undertaking’s comprehensively by the
profitability should be brought proposing Ministry/Department
out. Further, where BIFR targets against other alternative forms of
have been assigned or Cabinet support which may be more
directions issued to the appropriate and cost- effective.
Company, the actuals vis-à-vis For example, in the case of
targets for the preceding three provision of credit guarantees to
years should be indicated. The enterprises that continually incur
data should be furnished in the losses as a result of
Form GFR 26 along with the government's pricing policy,
proposal for guarantee. budgetary subsidies or direct
(vi) Guarantees shall normally be government loans may be a more
restricted to the repayment of effective and less costly option.
principal and normal interest (xiv) Guarantees may not be
component of the loan. Other proposed in respect of Central
risks shall not form part of the Public Sector Enterprises whose
guarantee. strong financial credentials and
(vii) Government guarantees will be high credit rating would indicate
extended to only central public inherent ability to directly raise
sector companies/ agencies. the required resources without
(viii) Government guarantees shall not the support of government
be provided to the private sector. guarantee.
(ix) Government guarantees should Rule 278 Borrowings from multilateral agencies
normally not be extended for by Central Public Sector
external commercial borrowings. Undertakings.
(x) Government guarantees may be (i) All borrowings from the
given on all soft loan components multilateral agencies by Central
of the bilateral/ multilateral aid. Public Sector Undertakings
However, guarantee shall not be would be direct (without
normally given for the Government of India’s
commercial loan components of intermediation) on the terms as
such aid. agreed mutually between the
(xi) Government of India guarantee borrower and the lender and
will not be given in cases of approved by the Government of
grants. However, if the donor India. However, where such
insists on ensuring performance, terms involve guarantee of
the same may be listed as a Government of India, prior
negotiating condition for getting approval of the Budget Division
the grant. of the Ministry of Finance may be
(xii) Appropriate conditions, may be obtained.
made by Government while (ii) The borrowing should relate to
giving the guarantee e.g. period the Projects approved by the
of guarantee, levy of fee to cover prescribed competent authority
risk, representation for of the Central Government.
Government on the Board of (iii) Wherever guarantee is to be
Management, Mortgage or lien given by Government of India,
on the assets, submission to the borrower shall enter into an
Government of periodical reports agreement with the Government
and accounts, right to get the of India for the payment of
accounts audited on behalf of guarantee fee on the principal

87
amount of the loan drawn and Government of India.
loan outstanding from time to Rule 280 Execution of Government Guarantees.
time. (i) Once the guarantee is approved
(iv) The Government of India by Ministry of Finance, the
Guarantee would only cover the guarantees will be executed and
principal amount and the normal monitored by the Administrative
interest. All other risks including Ministries concerned, who are
the exchange rate risk would be also required to report the status
shared between the borrower in this regard on an annual basis
and lender as per terms and till they are invoked or are
conditions prescribed in the loan obliterated. The following
agreement. guidelines need to be kept in
Rule 279 (1) Levy of Guarantee Fees. The rates view while issuing guarantees-
of fee on guarantees would be as notified (a) The obligations of the
by the Budget Division, Department of borrower to service the loan
Economic Affairs, Ministry of Finance and the guarantee, and the
from time to time. The rates of guarantee monitoring of the utilization
fee are given in Appendix - 12. Ministries of the guaranteed loans, and
or Departments shall levy the prescribed adherence to the terms and
fee in respect of all cases. The fees are conditions of the guarantee
also to be levied in respect of non-fund by the Borrower shall be
based borrowings or credits (viz. letters of ensured by the
credit, Bank guarantees etc.). In case of Administrative Ministry/
any doubt with regard to the Department through a back-
categorisation of any particular to- back agreement with the
undertaking or organization or the nature borrower which may be
of borrowing for the purpose of levy of drawn up and implemented
fee, the matter may be referred to the to the satisfaction of the
Budget Division for clarification. The Administrative Ministry
Ministries or Departments should also concerned. For this
take adequate steps to ensure prompt purpose, necessary records
recovery of the prescribed fees. to monitor the guarantee,
Rule 279 (2) The guarantee fee should be levied including servicing of
before the guarantee is given and guarantee fee shall be
thereafter on first April every year. The maintained by the Line
rate of guarantee fee is to be applied on Ministries / Departments
the amount outstanding at the beginning concerned.
of the guarantee year. (b) Administrative Ministry
Rule 279 (3) Where the guarantee fee is not paid should ensure that there are
on the due date, fee should be charged at no inconsistencies between
double the normal rates for the period of the guarantee approval
default. given by the Ministry of
Rule 279 (4) The Government may guarantee no Finance and the guarantee
more than 80% of the project loan, agreement signed by it with
depending on the conditions imposed by the borrower. The
the lender. This would incentivize the obligations enforced by the
lenders to make proper analysis of the Government as guarantor
project, credit worthiness of the would be duly factored in.
borrower(s), and build strategies for risk (c) Deviations / modifications /
management. In such cases, bankers/ amendments on the main
lenders may be asked to share the risk by conditions of the guarantee,
bearing a minimum of 20% of the net loss particularly with reference to
associated with any default. The the rate of interest on the
arrangement would ensure that the loan to be guaranteed and
lenders undertake a more rigorous obligations of the
assessment of the risk exposure. Government to be covered,
Provided further that in certain should not be referred in a
exceptional circumstances, the routine manner to Budget
Government of India may guarantee Division for clarification/
100% of the financing where the change. The Administrative
organisation concerned is discharging Ministry concerned shall
some function on behalf of the make out a separate case,

88
fully justifying the need for IGAS, through the office of
considering any proposed Controller/Chief Controller of
modifications / Accounts.
amendments, after thorough Rule 281 (1) Review of Guarantees. All Ministries
scrutiny of the request of the or Departments shall ensure that all
borrower for the same, guarantees are reviewed every year. The
before placing these monitoring or review undertaken should
proposals before the Budget examine whether the borrower is
Division for a final decision. discharging repayment obligations or
(d) In respect of bilateral and interest obligations as per terms of the
multilateral credit, Standard loan agreement, whether the repaying
format of Guarantee of the capacity for the loan and guarantee
lending institutions may be amount is imposed in any manner, and
examined with a view that whether all covenants and conditions are
the same are not in being religiously followed. The Financial
contradiction with the Advisers of the Ministries or Departments
conditions of sovereign should undertake these reviews. A copy
guarantee prescribed in this of the review report including on timely
chapter, before signing by and correct payment of guarantee fees,
the Administrative Ministry/ shall be forwarded by the Finance
Department. The guarantee Advisor to the Budget Division by 30th
agreement may also not April every year for the previous financial
omit any conditions as year.
brought out in this Chapter. Rule 281 (2) The Financial Adviser of the Ministries
New conditions or or Departments would be responsible for
covenants, and differences, ensuring that the annual reviews are
if any, shall be referred to carried out by the Ministries or
Budget Division of the Departments concerned. They shall also
Department of Economic ensure that a register of guarantees in
Affairs (DEA) for Form GFR 25 is maintained:-
concurrence. (i) to keep a record of guarantees;
(e) Guarantee proposals (ii) to retain information required
approved by the Budget from time to time in respect of
Division shall have to be guarantees;
executed in the same (iii) to keep record of the annual
financial year. If the reviews to see that these are
guarantee/ loan agreement carried out regularly;
is not signed in the same (iv) to keep record of levy and
financial year as that of the recovery of guarantee fee;
approval of the guarantee (v) to send data as contained in
proposal, the guarantee Form GFR 25, duly updated
proposal shall have to be every year to the Budget Division
submitted again. in the Ministry of Finance,
(f) The guarantee shall hold Department of Economic Affairs
only for the specific purpose by tenth of April.
agreed to by the Budget Rule 281 (3) In respect of guarantees issued by the
Division. Ministry of Finance for external loans, the
(g) Guarantee given by respective credit divisions of Department
Government of India shall of Economic Affairs shall conduct an
be non - transferrable and annual review in consultation with the
would cease to exist in case Financial Adviser (DEA). For this
the ownership of the entity is purpose, the Financial Adviser (DEA)
transferred from shall ensure the maintenance of the
Government of India, unless required registers, as well as ensure that
the Guarantee is re- the annual reviews are carried out by the
confirmed by the Budget concerned credit divisions, and report
Division. forwarded to the Budget Division in Form
(ii) The Financial Advisers in GFR 25. In cases, where the guarantees
Ministry/ Department will perform on external loans are issued by the
the responsibility of maintenance concerned administrative Ministry, that
of records and reporting including Ministry would be responsible for
for the Finance Accounts and the conducting the review.

89
Rule 281 (4) Classification of guarantees. For the Controller General of Accounts,
purpose of record keeping, guarantees for onward submission to Budget
shall be classified as under:- Division. Based upon the inputs,
(i) guarantees given to the RBI, a statement of Guarantees given
other banks and industrial and by the Central Government is
financial institutions for depicted as an annexure in the
repayment of principal and Receipt Budget.
payment of interest, cash credit (ii) While furnishing the Statement of
facility, financing seasonal guarantees to the Ministry of
agricultural operations and/or Finance, the Administrative
providing working capital to Ministries or Departments should
companies, corporations, ensure and certify that the
cooperative societies and banks; amounts shown tally with the
(ii) guarantees given for repayment total figures in the statement to
of share capital, payment of be included in the Detailed
minimum annual dividend and Demands for grants.
repayment of bonds or loans, (iii) While furnishing the summary
debentures issued or raised by statements, the Ministries or
the statutory corporations and Departments should also certify
central public sector that the information tallies with
undertakings; the material furnished to the
(iii) guarantees given in pursuance of Controller General of Accounts
agreements entered into by the for the purpose of inclusion in the
Government of India with Finance Accounts of the relevant
international financial institutions, year and is compliant with Indian
foreign lending agencies, foreign Government Accounting
governments, contractors, Standard-1 (IGAS-1) relating to
suppliers, consultants etc., Government Guarantees.
towards repayment of principal, Rule283 (1) Invocation of Guarantee. A
interest and/ or commitment Guarantee Redemption Fund (GRF) has
charges on loans etc., and /or for been established in the Public Account of
payment against supplies of India for redemption of guarantees given
material and equipment; to CPSEs, Financial Institutions, etc., by
(iv) counter guarantees to banks in the Central Government whenever such
consideration of the banks guarantees are invoked. The funding to
having issued letters of credit or the Guarantee Redemption Fund is to be
authority to foreign suppliers for done through budgetary appropriations,
supplies made or services as considered appropriate, under the
rendered. head 'Transfer to Guarantee Redemption
(v) guarantees given to Railways for Fund' through the Demands for Grants of
due and punctual payment of the Department of Economic Affairs.
dues by Central Government Rule283 (2) The Administrative Ministries/
companies or corporation; Departments should inform any case of
(vi) Others guarantees not covered impending/likely invocation, well in
under above five classes. advance, to the Budget Division, along
Rule 282 Accounting for Guarantees. In order to with the proposed corrective measures.
ensure greater transparency in its fiscal Rule283 (3) In the event of invocation of a
operations in the public interest, Rule 6 of guarantee, the obligation may be
the FRBM Rules, 2004 requires discharged by sanctioning loan to the
government to publish a disclosure borrowing entity equal to the amount of
statement on guarantees given by guarantee outstanding with the approval
government, at the time of presenting the of Budget Division, Ministry of Finance.
annual financial statement and demands However, any payment on this account
for grants. This statement covers, inter will finally be charged to the Guarantee
alia, details regarding the class and Redemption Fund maintained in the
number of guarantees, amounts Public Accounts.
guaranteed, outstanding, invocations,
guarantee fee payable and other material
details.
(i) The statement is to be compiled
by the Administrative Ministries /
Departments and submitted to

90
Ch.-12 - MISCELLANEOUS SUBJECTS
period and no formal
I. ESTABLISHMENT

Rule 284 (1) Proposal for additions to

Establishment. appointment or officiating
All proposals for additions to arrangement is made in his
establishment shall be submitted to place.
sanctioning authority in accordance with (iii) Where due to administrative
the instructions issued by Department of exigencies a government servant
Expenditure in this regard time to time.58 is required to move to another
Rule 284 (2) All proposals for creation of new posts post relinquishing his post
or a revision in an existing establishment against local arrangement.
should contain, inter alia:- Rule 286 (2) In cases in which the transfer of
(i) the present cost of the charge involves assumption of
establishment in existence; responsibility for cash, stores, etc., the
(ii) cost implications of the change following instructions should be
proposed giving details of pay observed: -
and allowances of post(s) (i) The Cash Book or imprest
proposed; account should be closed on the
(iii) expenditure in respect of claim to date of transfer and a note
pension or gratuity or other recorded in it over the signatures
retirement benefits that may arise of both the relieved and the
in consequence of the proposals; relieving Government servants,
(iv) details on how the expenditure is showing the cash and imprest
proposed to be met including balances and the number of
proposed re-appropriations. unused cheques/receipt books, if
Rule 284 (3) Continuation of an existing post any, made over and received by
beyond the specified duration will be with them respectively.
explicit approval of Ministry of Finance, (ii) The relieving Government
based on functional justification. servant should bring to notice
Rule 284 (4) All proposals for increase in anything irregular or
emoluments for an existing post(s) shall objectionable in the conduct of
be referred to the Ministry of Finance for business that may have come
approval. officially to his notice to the
Rule 285 All service matters from entry to exit, incoming officer.
including leave, transfer, promotion, (iii) In the case of any sudden
performance appraisal should be casualty occurring or any
maintained in a digitised format. emergent necessity arising for a
Rule 286 (1) Transfer of Charge. A report of Government servant to relinquish
transfer of a Gazetted Government his charge, the next senior officer
servant duly made in Form GFR 16 and of the department present shall
signed both by the relieved and relieving take charge. When the person
Government servants, shall be sent on who takes charge is not a
the same day to the Head of the Gazetted Government servant,
Department or other Controlling Officers he must at once report the
concerned except in the following types circumstances to his nearest
of cases in respect of which report of departmental superior and obtain
transfer of charge need not be signed orders as to the cash in hand, if
both by the relieving and relieved any.
Government servants simultaneously Rule 286 (3) The additional procedure to be
and may be sent independently:- followed by an Audit Officer or Accounts
(i) Where a Gazetted Government Officer, etc., in making over charge of his
servant assumes charge of a functions in connection with the
newly created or vacant post or Charitable Endowments and other Trust
relinquishes charge of a post Accounts is laid down in Appendix – 8.
which has been abolished. Rule 287 Date of Birth. Every person newly
(ii) Where a Gazetted government appointed to a service or a post under
servant vacates a post for a short Government shall, at the time of the

58
Amended vide Department of Expenditure (DoE), Ministry of
Finance (MoF) OM No. 14(37)/2015-E.II.A dated 12.07.2024.

91
appointment, declare the date of birth by journey. He shall submit the travelling
the Christian era with confirmatory allowance claim within sixty days of its
documentary evidence such as a becoming due failing which it shall stand
Matriculation Certificate, where forfeited.
prescribed qualification for appointment Rule 291 Reckoning the date in case of T.A. claims
is Matriculation or above. In other cases by retired Government servants
Municipal Birth Certificate or Certificate appearing in a Court of Law for defending
from the recognised school last attended himself. - Retired Government servants
shall be treated as a valid document. become eligible for reimbursement of
Rule 288 (1) Service Book. Detailed Rules for Travelling expenses in respect of
maintenance of Service Books are travel(s) for appearing in court of law for
contained in SRs. Service Books defending himself only when the
maintained in the establishment should judgement relating to his honorable
be verified every year by the Head of acquittal is pronounced by the court. In
Office who, after satisfying himself that such cases the date of pronouncements
the services of Government servants of the judgement shall be the reference
concerned are correctly recorded in each point for submission and reimbursement
Service Book shall record the following of his T.A claim.
certificate “Service verified from ……(the Rule 292 Due date of Leave Travel Concession
date record from which the verification is claim. Leave Travel Concession claim of
made) ........................................upto a government servant shall fall due for
…….................(date)…………” payment on the date succeeding the date
Rule 288 (2) The service book of a government of completion of return journey. The time
servant shall be maintained in duplicate. limit for submission of the claims shall be
First copy shall be retained and as under :-
maintained by the Head of the Office and (i) In case advance drawn: Within
the second copy should be given to the thirty days of the due date.
government servant for safe custody as (ii) In case advance not drawn:
indicated below:- Within sixty days of the due date.
(i) To the existing employees - In case of (i) above if the claim is not
within six months of the date on submitted within one month of the due
which these rules become date, the amount of advance shall be
effective, if not already given. recovered but the Government employee
(ii) To new appointees - within one shall be allowed to submit the claim as
month of the date of under (ii) above. In case of failure to
appointment. submit the claim in both the cases within
Rule 288 (3) In January each year the Government the prescribed time lines, the claim shall
servant shall handover his copy of the stand forfeited.
Service Book to his office for updation. Rule 293 Due date of Over Time Allowance
The office shall update and return it to the claims. A claim for overtime allowance
Government Servant within thirty days of shall fall due for payment on first day of
its receipt. the month following the month to which
Rule 288 (4) In case the Government servants’ the overtime allowance relates. The claim
copy is lost by the government servant, it shall stand forfeited if not submitted
shall be replaced on payment of a sum of within 60 days of the due date.
Rs. 500/-. Rule 294 Due date of a withheld increment. In
Rule 288 (5) All Service Books should be digitised the absence of any specific order
for easy reference and to avoid problems withholding an ordinary increment under
in case of loss of Service Books. FR 24 before the date on which it falls due
Rule 289 Retrospective claim due from date of for payment, the period of one year
sanction. In the case of sanction should be counted from the date on which
accorded with retrospective effect the it falls due and not with reference to the
charge does not become due before it is date on which the Increment Certificate is
sanctioned. In such cases the time-limit signed by the competent authority. Even
specified in Rule296 (1) should be where an increment is withheld, the time-
reckoned from the date of sanction and limit should be reckoned from the date on
not from the date on which the sanction which it falls due after taking into account
takes effect. the period for which it is withheld.
Rule 290 Due date of T. A. claim. Travelling Rule 295 (1) Arrear Claims. Any arrear claim of a
allowance claim of a government servant Government servant which is preferred
shall fall due for payment on the date within two years of its becoming due shall
succeeding the date of completion of the be settled by the Drawing and Disbursing

92
Officer or Accounts Officer, as the case Rule 299 Currency of sanction of Provident
may be, after usual checks. Fund advance/withdrawal. A sanction
to an advance or a non-refundable part
Rule 295 (2) For the purpose of the above withdrawal from Provident Fund shall,
provisions, the date on which the claim is unless it is specifically renewed, lapse on
presented at the office of disbursement the expiry of a period of three month. This
should be considered to be the date on will, however, not apply to withdrawals
which it is preferred. effected in installments. In such cases the
Rule 295 (3) sanction accorded for non-refundable
(i) A claim of a government servant withdrawals from Provident Fund will
which has been allowed to remain valid up to a particular date to be
remain in abeyance for a period specified by the sanctioning authority in
exceeding two years, should be the sanction order itself.
investigated by the Head of the
Department concerned. If the II. REFUND OF REVENUE
Head of Department is satisfied
about the genuineness of the Rule 300 Sanctions of refunds of revenue. All
claim on the basis of the sanctions to refunds of revenue shall be
supporting documents and there regulated by the orders of an
are valid reasons for the delay in Administrator or of the departmental
preferring the claims, the claims authority, as the case may be, according
should be paid by the Drawing to the provisions of the rules and orders
and Disbursing Officer or contained in the departmental manuals
Accounts Officer, as the case etc.
may be, after usual checks. Rule 301 (1) Communication of refund
(ii) A Head of Department may sanctions to audit. The sanction to a
delegate the powers, conferred refund of revenue may either be given on
on him by sub rule (i) above to the the bill itself or quoted therein and a
subordinate authority competent certified copy of the same attached to the
to appoint the Government bill in the latter case.
servant by whom the claim is Rule 301 (2) Suitable note of refund to be made
made. in original Cash Book entry and other
Rule 296 (1) Procedure for dealing with time- documents. Before a refund of revenue
barred claims. is made, the original demand or
Even a time barred claim of a realization, as the case may be, must be
Government servant, shall be entertained linked and a reference to the refund
by the concerned authority provided that should be recorded against the original
the concerned authority is satisfied that entry in the Cash Book or other
the claimant was prevented from documents so as to make the
submitting his claim within the prescribed entertainment of a double or erroneous
time limit on account of causes and claim impossible.
circumstance beyond his control. Rule 301 (3) Remission of revenue before
Rule 296 (2) A time barred claim referred to in collection is not refund. Remissions of
Rule296 (1) shall be paid with the revenue allowed before collection are to
express sanction of the Government be treated as reduction of demands and
issued with the previous consent of the not as refunds.
Internal Finance Wing of the Ministry or Rule 301 (4) Refunds not regarded as
Department concerned. expenditure for allotment. Refunds of
Rule 297 Time barred claims of persons not in revenues are not regarded as
Government service. The provisions of expenditure for purposes of grants or
Rule 289 to Rule 296 shall apply mutatis appropriation.
mutandis to arrear claims preferred Rule 301 (5) Competent authority in case of
against Government by persons not in credits wrongly classified. In cases
Government service. where revenue is credited to a wrong
Rule 298 Retrospective sanctions. head of account or credited wrongly
Retrospective effect shall not be given by under some misapprehension, the
competent authorities to sanctions authority competent to order refund of
relating to revision of pay or grant of revenue shall, in such cases, be the
concessions to Government servants, authority to whom the original receipts
except in very special circumstances with correctly pertain.
the previous consent of the Ministry of Rule 302 Compensation for accidental loss of
Finance. property. No compensation for

93
accidental loss of property shall be paid schedule to be appended to the
to an officer except with the approval of pay bill should be prepared and
the Ministry of Finance. Compensation tallied with recoveries made
will not ordinarily be granted to an officer before the submission of the bill
for any loss to his property which is for payment.
caused by floods, cyclone, earthquake or (vi) Similar provisions shall also be
any other natural calamity or which is due made towards subscribers to
to an ordinary accident, which may occur New Pension System (NPS).
to any citizen, for example, loss by theft Rule 304 (2) Crediting of Interest. The deposit
or as a result of a railway accident or fire accounts of these funds on the
etc. The mere fact that at the time of the Government book will be credited with
accident, the Government servant is interest at such rates and at such
technically on duty or is living in intervals as may be prescribed by
Government quarters in which he is Ministry of Finance in each case.
forced to reside for the performance of his Rule 305 (1) Maintenance of a register for
duties will not be considered as a recovery of Postal Life Insurance
sufficient ground for the grant of Premia. All drawing officers should
compensation. maintain in Form (GFR 20) record of
Postal Life Insurance policy (PLI) holders.
III. DEBT AND MISCELLANEOUS Rule 305 (2) The register should be kept upto date,
OBLIGATIONS OF GOVERNMENT the names of the policy holders should be
noted in alphabetical order according to
Rule 303 Public Debt. The public debt raised by surnames, leaving sufficient space
government by issue of securities shall between two entries to enable
be managed by the Reserve Bank. The newcomers names being inserted in the
Reserve Bank shall also manage right place.
securities created and issued under any (i) A separate entry should be made in the
other law or rule having the force of law, register for each policy in the case of a policy
provided such law or rule provides holder having more than one policy.
specifically for their management by the (ii) On receipt of an intimation from the Director,
Reserve Bank. Postal Life Insurance, Kolkata, about the issue
Rule 304 (1) Provident Funds. The procedure of a policy in favour of a subscriber authorizing
relating to the recovery of, subscriptions the Drawing Officer to commence recovery
to and withdrawals from, the Provident from pay, or on receipt of a Last Pay
Funds established under accordance Certificate in respect of the subscriber
with the provisions of the respective transferred from another office, the Drawing
Provident Fund Rules. Following Officer should make a note of the particulars
instructions should be carefully observed of the policy in the register. The name of the
by the Head of the Offices for correct office from which the subscriber has been
preparation of the Provident Fund transferred should invariably be noted in the
schedules:- remarks column. Wherever a subscriber is
(i) A complete list of subscribers to transferred to another office or his policy is
each fund should be maintained discharged, his name should be scored out
in each disbursing office in the from the register giving necessary remarks.
form of the schedule. (iii) After the preparation of the monthly pay bill,
(ii) Each new subscriber should be the amount of recovery on account of PLI
brought on this list and any premium shown in the bill should be posted in
subsequent changes resulting the monthly column in the register with proper
from his transfer or in the rate of reference to the bills or the vouchers. The fact
subscription etc. clearly indicated of excess or non-recovery should be briefly
in the schedule. noted in the remarks column. Extracts should
(iii) When a subscriber dies, quits be attached to the relevant bills in support of
service or is transferred to the recoveries. While taking extracts it should
another office, full particulars be seen that the names of those insurants
should be duly recorded in the from whom recoveries were made in previous
list. months but no recoveries have been made
(iv) In the case of transfer of a during the current month either on account of
subscriber to another office, the transfer or discharge of that policy or on
necessary note of transfer should account of leave salary being not drawn or the
be made in the list of both the official being on leave without pay, should be
offices. included in the current month's schedule and
(v) From this list the monthly necessary remarks noted against their names.

94
(iv) Similarly, the remarks 'New Policy' or warrant such exemption provided that -
Transferred from (i) they are satisfied that there is no
……………………………Office should risk involved;
begiven in the schedule against the names of (ii) such exemption is granted only in
insurant entered for the first time in current the case of a permanent
month. Reasons for short or excess recovery Government servant; and
should be noted briefly in the remarks column. (iii) the period of officiating
In short, schedule of Postal Life Insurance arrangement does not exceed
recoveries to be attached to the bills, would be four months.
a record not only of those from whom the Rule 307 Notwithstanding anything contained in
recovery has actually been affected but also Rule 306, security need not be furnished
of those from whom recovery was being in cases of –
affected previously but has not been affected. (a) Government servants who are
entrusted with the custody of
IV. SECURITY DEPOSITS stores, which in the opinion of the
competent authority are not
Rule 306 (1) Furnishing of security by considerable.
Government servants handling cash. (b) Government servants, who are
Subject to any general or special entrusted with the custody of
instructions prescribed by Government in office furniture, stationery and
this behalf, every Government servant, other articles required for office
who actually handles cash or stores shall management, if the Head of
be required to furnish security, for such Office is satisfied about the
amount and in such form as Central safeguards against loss through
Government or an Administrator may pilferage.
prescribe according to circumstances (c) Librarian and Library Staff.
and local conditions in each case, and to (d) Drivers of Government vehicles.
execute a security bond setting forth the Rule 308 Retention of Security. A security
conditions under which Government will deposit taken from Government servant
hold the security and may ultimately shall be retained for at least six months
refund or appropriate it. from the date he vacates his post, but a
Rule 306 (2) The amount of security to be obtained security bond shall be retained
from a Government servant shall be permanently or until it is certain there is
determined on the basis of actual cash no further necessity for keeping it.
handled which shall not include account
payee cheques and drafts. V. TRANSFER OF LAND AND BUILDINGS
Rule 306 (3) Security should be furnished in the
form of a Fidelity Bond in GFR 17, the Rule 309 Save as otherwise provided in any law,
security bond should be executed in rule or order relating to the transfer of
Form GFR 14. The Administration shall Government land, no land belonging to
see that the government servant pays the the Government or any of its bodies,
premia necessary to keep the Bond alive, including autonomous bodies, PSUs, etc.
for which the government servant shall shall be sold without previous sanction of
submit premium receipt in time. If the the Government.
government servant fails to submit the Rule 310 (1)Transfer of Land. Transfer of land
premium receipt he shall not be allowed from a Union Territory to a Central
to perform the duties of his post and he Government Department (i.e. Ministry or
shall be dealt with in accordance with the Department of the Union Government
terms of his appointment. including Defence, Railways, and Posts
Rule 306 (4) A Government servant who is and Telegraphs) or vice versa shall be on
officiating against the post of another 'no profit no loss' basis.
cash or store handling Government Rule 310 (2) Transfer of land from one Department
servant shall be required to furnish the full of the Government (as defined in Rule
amount of the security prescribed for the 309) to another shall be on 'no profit no
post. The Ministry or Department of loss' basis.
Central Government, Administrators and ‘No profit no loss’ as indicated at rules
the Comptroller and Auditor General in 310(1) and 310(2) above does not
respect of persons serving in Indian Audit necessarily mean transfer being effected
and Accounts Department may, however, with ‘zero cost’. Transfer can be on the
exempt a Government servant officiating basis of mutually agreeable terms and
in such a short-term vacancy from conditions or in exchange for equal value
furnishing security if the circumstances land or payment of value of land or cost

95
of acquisition. Rule 314 Taxes etc. collected by Government
Rule 310 (3) Transfer of buildings and on behalf of Local Bodies. Proceeds of
superstructures on land shall be treated taxes, fines or other revenues levied or
similar to transfer of land. Transfer of collected by Government for or on behalf
buildings and superstructures on land of local bodies shall not be appropriated
vide above shall be at the present day direct to a local fund without passing
cost minus depreciation of these them through the Consolidated Fund
structure(s) standing on the land. unless expressly authorised by law.
Valuation for this purpose shall be Rule 315 Payments to Local Bodies. Subject to
obtained from the Central Public Works provision of relevant act and rules,
Department at the time of transfer. payments to local bodies in respect of
Rule 310 (4) The allotment of land to, and recovery revenue and other moneys raised or
of cost of buildings from the Public Sector received by Government on their behalf
Undertakings shall be at 'market value' as will be made in such manner and on such
defined in paragraph - 2 of Appendix - 7. date, as may be authorized by general or
Rule 310 (5) The transfer of land and building special orders of Government.
between the Union and State Rule 316 Audit of Account of Local Bodies.
Governments shall be regulated by the Subject to the provisions of any law made
provisions of Articles 294, 295, 298 under Article 149 of the Constitution, the
and299 of the Constitution and subsidiary accounts of local bodies, other non-
instructions issued by the Union Government bodies, or institutions will be
Government which are reproduced as audited by the Indian Audit and Accounts
Appendix - 7. Department under such terms and
conditions as may be agreed upon
VI. CHARITABLE ENDOWMENTS AND between the Government and the
OTHER TRUSTS Comptroller and Auditor General of India.
Rule 317 Audit Fees. Audit fees on the basis of
Rule 311 Detailed instructions relating to daily rates prescribed by Government in
Charitable Endowments and other Trusts consultation with the Comptroller and
are embodied in Appendix -8. Auditor General of India from time to time
shall be charged by the Indian Audit and
VII. LOCAL BODIES Accounts Department for the audit of
local and other non-Government funds,
Rule 312 (1)Financial arrangements between excluding funds for the audit of which the
Central Government and Local rates of fees recoverable are prescribed
Bodies. Unless any one of the following by law or by rules having the force of law.
arrangements is authorized by specific Provided that nothing contained in this
orders of Government, a local body will rule shall be held to override any special
be required to pay, in advance, the instructions of Government exempting
estimated amount of charges to be any particular local body or institution
incurred or cost of services to be wholly or partially from the payment of
rendered, by Government on account of audit fees.
the fund:- Rule 318 In the case of Government Companies,
(i) payments made by Government the recovery of the cost of Supplementary
are debited to the balances of the Audit conducted under Section 143(6) of
deposits of the local fund with Companies Act, 2013 as amended from
government; or time to time, should be waived in those
(ii) payments are made as advances cases where the audit is done by the
from public funds in the first Comptroller and Auditor General through
instance pending recovery from his own departmental staff but should be
the local funds. enforced in cases where the Comptroller
Rule 312 (2) Notwithstanding the provision and Auditor General employs
contained in Rule 312 (1) in case of professional auditors for the
emergency such as epidemics pre- Supplementary Audit.
payment will not be insisted upon from Rule 319 Financial transactions between
local bodies for supply of medicines from Government and local bodies shall be
Medical Stores Depots of the Ministry of rounded off to the nearest Rupee.
Health.
Rule313 Any amount or loan not paid on due date VIII. MAINTENANCE OF RECORDS
to Government by a local body, may be
adjusted from any non-statutory grant Rule320 (1) Destruction of Records. Subject to
sanctioned for payment to it. any general or special rules or orders

96
applicable to particular departments as responsible for timely recovery or
prescribed in their departmental manuals, adjustment of the advance.
no Government record connected with Rule 323 (2)The adjustment bill, along with balance
accounts shall be destroyed except in if any, shall be submitted by the
accordance with the provisions of government servant within fifteen days of
Appendix -9. the drawal of advance, failing which the
Rule 320 (2) All the records prescribed for retention advance or balance shall be recovered
in Appendix - 9, if maintained in electronic from his next salary(ies).
form should mandatorily have a back up Rule 324 The Ministry or Department may sanction
and adhere strictly to the retention period the grant of an advance to a Government
and the prescribed formats. The Pleader in connection with law suits, to
responsibility for verification and which Government is a party, up to the
certification on a monthly/annual basis as maximum limit of Rupees twenty-five
prescribed under relevant rules should thousand at a time. The amount so
also be ensured. advanced should be adjusted at the time
of settlement of Counsel’s fee bills.
IX. EXPENDITURE FOR CONTINGENT
AND MISCELLANEOUS PURPOSE59

Rule 321 Rules relating to incurring contingent

expenditure are available under Section
III of Subsidiary Instructions to Central
Government Account (Receipt &
Payment) Rules 2022.60
Rule 322 Permanent Advance or Imprest.
Permanent advance or Imprest for
meeting day to day contingent and
emergent expenditure may be granted to
a government servant by the Head of the
Department in consultation with Internal
Finance Wing, keeping the amount of
advance to the minimum required for
smooth functioning. Procedures for
maintenance of permanent advance or
Imprest are available in para 10.12 of the
Civil Accounts Manual.
Rule 323 (1) Advances for Contingent and
Miscellaneous purpose. The Head of
the Office may sanction advances to a
Government Servant for purchase of
goods or services or any other special
purpose needed for the management of
the office, subject to the following
conditions:-
(i) The amount of expenditure being
higher than the Permanent
Advance available, cannot be
met out of it.
(ii) The purchase or other purpose
cannot be managed under the
normal procedures, envisaging
post- procurement payment
system.
(iii) The amount of advance should
not be more than the power
delegated to the Head of the
Office for the purpose.
(iv) The Head of the Office shall be

59 60
Amended vide Department of Expenditure (DoE), Ministry of Amended vide Department of Expenditure (DoE), Ministry of
Finance (MoF) OM No. 14(37)/2015-E.II.A dated 12.07.2024. Finance (MoF) OM No. 14(37)/2015-E.II.A dated 12.07.2024.

97
APPENDIX– 1
[See Rule 37 ]

INSTRUCTIONS FOR REGULATING THE ENFORCEMENT

OF RESPONSIBILITY FOR LOSSES, ETC.

1. The cardinal principle governing the assessment of responsibility is that, every Government officer should
exercise the same vigilance in respect of expenditure from public fund generally as a person of ordinary
prudence would exercise in respect of the expenditure and the custody of his own money. While, the competent
authority may, in special cases, condone an officer's honest errors of judgement involving financial loss if the
officer can show that he has acted in good faith and done his best up to the limits of his ability and experience,
personal liability shall be strictly enforced against all officers who are dishonest, careless or negligent in the
duties entrusted to them.
2. In cases where loss is due to delinquencies of subordinate officials and where it appears that this has been
facilitated by laxity of supervision on the part of a superior officer, the latter shall also be called strictly to
account and his personal liability in the matter carefully assessed.
3. (a)The question of enforcing pecuniary liability shall always be considered as well as the question of other
forms of disciplinary action. In deciding the degree of an officer's pecuniary liability, it will be necessary to look
not only to the circumstances of the case but also to the financial circumstances of the officer, since it should
be recognized that the penalty should not be such as to impair his future efficiency.
(b)In particular if the loss has occurred through fraud, every endeavour should be made to recover the whole
amount lost from the guilty persons and if laxity of supervision has facilitated the fraud, the supervising officer
at fault may properly be penalized either directly by requiring him to make good in money a sufficient proportion
of the loss or indirectly by reduction or stoppage of his increments of pay.
(c)It should always be considered whether the depreciated value of the Government property or equipment
lost, damaged or destroyed by the carelessness of individuals entrusted with their care should be recovered
from the delinquent official. The depreciated value of the stores may be calculated by applying the 20% of
depreciation in the case of vehicles, including cycles, and 15% in the case of calculating machines, on the
reduced balance every year. The amount to be recovered may be limited to the Government servant's capacity
to pay.
4. When a pensionable Government servant is concerned in any irregularity or loss, the authority investigating
the case shall bear in mind the provisions contained in Central Civil Services (Pension) Rules 1972 as
amended from time to time and immediately inform the Audit Officer and/or the Accounts Officer, as the case
may be, responsible for reporting on his title to Pension or Death-Cum-Retirement Gratuity, and the authority
competent to sanction Pension or Death-Cum-Retirement Gratuity and it will be the duty of the latter to make
a note of the information and see that the Gratuity or Death-Cum-Retirement Gratuity is not paid before a
conclusion is arrived at as regards the Government servant's culpability and final orders are issued thereon.
5. The fact that Government servants who were guilty of frauds or irregularities have been demobilized or have
retired and have thus escaped punishment, should not be made a justification for absolving those who are also
guilty but who still remain in service.
6. It is of the greatest importance to avoid delay in the investigation of any loss due to fraud, negligence, financial
irregularity, etc. Should the administrative authority require the assistance of the Audit Officer and/or the
Accounts Officer, as the case may be, in pursuing the investigation, he may call on that officer for all vouchers
and other documents that may be relevant to the investigation; and if the investigation is complex and he needs
the assistance of an expert Audit Officer/ Accounts Officer to unravel it, he should apply forthwith for that
assistance to Government which will then negotiate with Audit Officer and/or the Accounts Officer concerned
for the services of an investigating staff. Thereafter, the administrative authority and the Audit /Accounts
authority shall be personally responsible within their respective spheres, for the expeditious conduct of the
enquiry. In any case in which it appears that recourse to judicial proceedings is likely, the Special Police
Establishment or the State Police should be associated with the investigation.
7. Depending upon the results of the inquiry, departmental proceedings and/or prosecution shall be instituted at
the earliest moment against the delinquent officials concerned and conducted with strict adherence to the
Central Civil Services (Classification, Control and Appeal) Rules, 1957, and other instructions prescribed in
this regard by Government.

92
APPENDIX– 2
[See Rule 52 ]

PROCEDURE FOR PREPARATION OF

DETAILED ESTIMATES OF RECEIPTS

1. Revenue receipts. - These comprise (i) Central taxes, duties and cesses administered by the Central Board
of Direct Taxes and the Central Board of Excise and Customs; (ii) local taxes and duties and other receipts in
relation to the Union Territories without Legislature; (iii) interest receipts of loans and advances by the Central
Government as also interest charged to commercial departments, etc., (iv) notional receipts from adjustments
based on principles of accounting like grant assistance from foreign Governments or International institutions;
and (v) all other revenue receipts including dividends on equity investments of the Central Government, cesses
collected by the Ministries and Departments, etc.
2. Capital Receipts. These comprise (i) Internal debt (market loan, treasury bills, etc.); (ii) External debt; (iii)
Repayment of loans and advances made by the Central Government; (iv) Disinvestment Receipts (v) Other
Liabilities.
3. (1)Estimates of receipts of Central Taxes and Duties and External Aid receipts are prepared within the Ministry
of Finance by the Central Board of Direct Taxes, the Central Board of Excise and Customs and the Controller
of Aid Accounts and Audit. Estimates of internal debt (market loans) receipts are framed by the Budget Division.
(2)Estimates of revenue receipts of the Union Territory Administrations will be furnished to the Ministry of
Finance by the concerned Audit Officer / Accounts Officer wherever departmentalization of accounts has not
taken place and by the Controller of Accounts of the Union Territory Administrations where departmentalization
of accounts has been introduced.
(3)Estimates of receipts in all other cases will be prepared by Controller of Accounts of each Department after
obtaining necessary data by the 30th November from the various organizations / field units and such scrutiny
as may be necessary in the light of policy decisions and other post Budget developments.
4. Estimates will be furnished to the Ministry of Finance in prescribed forms (GFR 2, 2-A and 2-B) by the
prescribed date, each year for the ensuing Budget.
5. (1)In preparing the Revised Estimates, while previous year's actuals and current year's trends will be material
factors to review the original Budget Estimates, special attention should be devoted to making as realistic an
estimate as possible of receipts which are likely to materialize during the rest of the financial year.
(2)In framing the Budget Estimates for the ensuing year, the estimating authorities should exercise utmost
care. While all receipts which can be foreseen in the light of latest trends, decisions and developments must
be provided for, care should be taken to ensure that undue optimism does not influence these estimates.
Similarly, where the receipts have a seasonal character, due note should be taken thereof in preparing the
estimates.
(3) Receipts by way of recoveries from Central Government Ministries / Departments, are to be excluded in
preparing Receipt Estimates. Other recoveries (from the State and Union Territory Governments, foreign
Governments, companies and statutory bodies, individuals, etc.) will, however, be included in the Receipt
Estimates.
(4) Estimates of receipts by way of interest on loans and advances will be based on the terms of the loans
sanctioned, as entered in the Loan Registers, including defaults, if any. The estimates should be realistic; that
is to say, that the estimates should reflect not merely what is due but what is likely to be realized during the
year together with the reasons for non-recovery of the difference between receipts due and assumed in the
estimates. In the case of Public Sector Units, interest receipts expected from their internal resources should
be distinguished from notional recoveries offset by corresponding expenditure provisions in the form of
subsidies and loans.
Similarly, where repayments due are refinanced by further loans or by conversion of past loans into equity, the
details should be furnished.
(5) In reporting estimates of receipts by way of foreign grant assistance in cash or in kind, care should be taken
to classify foreign grant receipts in cash under the Major Head '1605 External Grant Assistance' and those in
the form of commodities under the Major Head '1606 Aid Materials and Equipment'. In the case of commodities
grants, identical provision will be made in expenditure estimates under the Major head '3606 Aid Materials and
Equipment's' (both as debits to represent the notional payment therefor and as credits - recoveries in reductions
of expenditure - to reflect the counter-balancing entries), as well as under the final functional Head of Account
showing the final destination and use of the aid materials and equipment.(Refer to Form GFR 2A).

NOTE. For utilization of cash grants, provision in expenditure estimates under the final functional Heads of
Account will be necessary.

93
(6)In reporting the estimates, the estimating authorities should confine their estimates to those items of receipts
which are to be accounted for finally in their own accounts and ultimately in the accounts of the Ministry/
Department to which they are subordinate. All other receipts/recoveries entering the accounts of another
Ministry/ Department should be communicated to the concerned Ministry/Department for consolidation in their
estimates (e.g., receipts of CGHS contributions and rent recoveries in respect of Government accommodation).

94
APPENDIX– 3
[ See Rule 52]

INSTRUCTIONS FOR PREPARATION OF DETAILED

ESTIMATES OF EXPENDITURE FROM THE CONSOLIDATED FUND

1. For purpose of Budget Estimates, expenditure from the Consolidated Fund –with the merger of Plan and Non-
Plan from Budget 2017-18 will comprise of expenditure on revenue account and on capital account including
loans and advances, and shown in the separate categories as applicable, comprising of I. Central Expenditure:
(i) Secretariat Expenditure; (ii) Central Sector Schemes and (iii) Other Central Expenditure and II. Transfers:
(i) Centrally Sponsored Schemes (ii) Finance Commission Transfers and (iii) Other Transfers.

A. GENERAL GUIDELINES FOR PREPARING EXPENDITURE ESTIMATES

2. To facilitate appropriate scrutiny and consolidation of Expenditure Estimates for reporting to the Ministry of
Finance, the Financial Adviser in each Ministry / Department will obtain detailed estimates and other supporting
data from each of the estimating authorities under the control of the Ministry / Department, in appropriate
forms, sufficiently in advance.
3. The framing of the Revised Estimates for the current year should always precede estimation for the ensuing
year. The Revised Estimates should be framed with great care to include only those items which are likely to
materialize for payment during the current year, in the light of (i) actuals so far recorded during the current
year, compared with the actuals for corresponding period of the last and previous years, (ii) seasonal character
or otherwise of the nature of expenditure, (iii) sanctions for expenditure and orders of appropriation or re-
appropriation already issued or contemplated and (iv) any other relevant factor, decision or development.
The Budget Estimate for the ensuing year should likewise be prepared on the basis of what is expected to be
paid, under proper sanction, during the ensuring year, including arrears of previous years, if any. Due attention
to considerations of economy must be paid and while all inescapable and foreseeable expenditures should be
provided for, care should be taken that the estimate is not influenced by undue optimism.
4. No lump sum provision will be made in the Budget except where urgent measures are to be provided for
meeting emergent situations or for meeting preliminary expenses on a project/scheme which has been
accepted in principle for being taken up in the financial year. In latter cases Budget provision will be limited to
the requirements of preliminary expenses and for such initial outlay, as, for example, on collection of material,
recruitment of skeleton staff, etc.
Provision for a 'token' demand should not be made in the Budget Estimates for the purpose of seeking approval
in principle for big schemes without the full financial implications being worked out and got approved by the
appropriate authorities. In accordance with instructions contained in Paragraph (viii) of Appendix (5), a 'token'
demand can be made during the course of a year for a project / scheme when the details thereof are ready
and funds are also available for undertaking it but it cannot be started without Parliament's approval, it being
in the nature of a 'New Service/New Instrument of Services'.
5. All estimates should be prepared on gross basis and 'voted' and 'charged' portions must be shown separately;
even expenditure met partly or fully from receipts taken in reduction of such expenditure or those
counterbalanced by receipts credited as revenue to the Consolidated Fund, must be reported in such estimates
on gross basis. Care should also be taken to ensure that all notional receipts reported in 'Receipt Estimates'
(such as interest receipts fully or partly subsidized, loan repayment receipts partly or fully refinanced through
further loans or conversions into equity, receipts of foreign grant assistance in the form of commodities or
material, etc.) are properly matched by adequate provisions in expenditure estimates.
6. The estimates of expenditure should include all items which are fully accounted for in the accounts of the
Ministry/Departments to which the estimating authority is subordinate; they shall also cover expenditure, if any,
in Union Territories without Legislature, whether provided for in the demands of the said Ministry / Department
or in the 'Area' demand of the concerned Union Territory. Estimates of 'Works Expenditure', if any, against the
provisions in the demands of the Ministry of Urban Development, as well as expenditure on pensions (including
commutation payments, gratuity payments, pension contributions, etc.) interest payments, loans and
advancesto Government servants, etc., which are provided for in the centralized Grants/Appropriations
controlled by the Ministry of Finance should be furnished to the Ministry of Urban Development and the Ministry
of Finance.
7. The estimate of establishment charges should be framed taking into account the trends over preceding three
years and other relevant factors like changes in rates of pay, allowances, number of posts and their filling and
the economy instructions issued by the Ministry of Finance from time to time.

95
8. Expenditure estimates will be prepared with full accounts classification, i.e., Major/Sub-Major Head, Minor
Head, Sub-Head, Detailed Head and Object Head of Account. The correctness of accounts classification must
be ensured by the Principal Chief Controller / Chief Controller/ Controller of Accounts in each case. Doubts, if
any, may be clarified beforehand in consultation with the Ministry of Finance, Budget Division and Controller
General of Accounts. The relevant Grant number and title of Appropriation should also be mentioned to
facilitate identification of the provision in Budget Estimates for the current year.
9. Unless otherwise indicated by the Ministry of Finance, estimates (both Revised Estimates for the current year
and Budget Estimates for the ensuing year) should reach the Ministry of Finance, Department of Economic
Affairs, Budget Division, by the date prescribed by the Ministry of Finance, each year, in triplicate in Form GFR
4, a separate form being used for each Major Head of Account.
10. To facilitate appreciation and scrutiny of the estimates, any major variations between the Budget and Revised
Estimates for the current year and also between the Revised Estimates for the current year and Budget
Estimates for the ensuing year should be explained cogently. In particular, all provisions for subsidy, capital
investment or loan to a Public Sector Undertaking, must be explained by indicating their purpose and the
extent to which they are intended to cover losses, working capital needs, debt or interest liabilities of the
undertaking.
11. Wherever the proposed estimates attract the limitations of 'New Service/New Instrument of Service', the fact
must be specifically highlighted. The guidelines to be followed in this regard are indicated in Annexure - I to
this Appendix. For all 'new' schemes, other than purely 'works' projects, the estimates proposed should be
supported by details set out in Annexure - II to this Appendix. In the case of provisions of 'Grants-in-aid' to
non- Government entities, the full purpose thereof and the nature of the grants, whether recurring or non-
recurring, should also be indicated.
12. All provisions for transfer of Government assets to Public Sector Undertaking and other non-Government
entities must also be highlighted, indicating whether the transfer is by way of grants or by way of equity
investment or loan. Similarly, in the case of nationalization or take-over of any private sector assets, the related
provisions in estimates must be supported by full details, such as the effective date of take-over, the agreed
compensation amount and the manner of its payment, etc. In cases of takeover, where the assets are
simultaneously transferred to a Public Sector Undertaking, it must be ensured that the estimates provide for
(i) payment of compensation for the take-over, (ii) for transfer of assets to the Public Sector Undertaking, by
means of recovery of compensation payment to be taken in reduction of expenditure, and (iii) provisions for
equity or loan to the Public Sector Undertaking.

B. SCHEME RELATED EXPENDITURE ESTIMATES

13. The Budget Division through the yearly Budget Circular will prescribe the form and the manner in which
proposals are required to be submitted to them for determining the scheme allocations,(both Central Sector
Schemes and Centrally Sponsored Schemes) for the ensuing year. The Financial Adviser in each Ministry /
Department of the Central Government will accordingly call for requisite data from the estimating authorities,
public sector and other enterprises under the control of the Ministry / Department, etc. The approved
allocations for Central Sector and Centrally Sponsored Schemes will be communicated by the Ministry of
Finance to the Central Ministries / Department. Ministries/ Departments will finalize the Statement of Budget
Estimates, indicating the total outlay approved for each scheme / organization and the extent to which it is to
be met from extra-budget resources and from provisions in the Demands for Grants.
14. Subject to such directions as may be issued by the Ministry of Finance from time to time, the Revised Estimates
for the current year and Budget Estimates of the ensuing year, in respect of Scheme provisions, are to be sent
to the Ministry of Finance in Form GFR 7. For furnishing these estimates, instructions for preparation and
submission of Other than scheme Expenditure Estimates will apply to the extent relevant; in addition, the
following points should also be borne in mind :-
(i) Such part of the approved budgetary support for Scheme outlay as relates to 'works expenditure' and has
been accepted by the Ministry of Urban Development for inclusion in their Demands for Grants should be
excluded by the other Ministries / Departments in reporting the estimates to the Ministry of Finance in
Form GFR 4.
(ii) In the case of, provisions for equity investments and loans to public sector and other enterprises, as well
as those for grants-in-aid, specific schemes, for which the outlay is provided and the extent for each of
them is also to be indicated clearly.
(iii) Provisions for Scheme expenditure on Central Sector Schemes and Centrally Sponsored Schemes,
including such expenditures in Union Territories, are to be included in the relevant demand of the
Administrative Ministry/ Department and not in 'Area' Demand of the concerned Union Territory.

96
ANNEXURE –I TO APPENDIX-3
(Refer: Ministry of Finance, Budget Division's OM No. F.1(22)-B(AC)/2022 dated 23.02.2024
and Ministry of Finance, Department of Expenditure OM no. 01(14)/2016-E.II(A)(Vol.III) dated
01.04.2024
[ See Paragraph 11 of Appendix – 3/Rule 63 ]

FINANCIAL LIMITS TO BE OBSERVED DETERMINING CASES

RELATING TO “NEW SERVICE”/NEW INSTRUMENT OF SERVICE
New Service (NS)

1. All new services [except for the new ‘Works’ under Capital section] shall be considered as ‘New Service’
as defined in Article 115 of the Constitution and shall accordingly need prior approval of the Parliament;

2. In case of services falling under the category of new works under Capital section (currently classified as
Land/Building/Machine in line with Rule 8 of the Delegation of Financial Powers as amended through Ministry of
Finance Gazette Notification dated 16.12.2022), the financial limits for the ‘New Service’ shall be as under:

Object Heads Reporting Limit Prior Approval of Parliament

1 2 3
1. Machinery & Equipment; Above ₹ 50 crore but not exceeding ₹ Above ₹ 100 crore, subject to
2. ICT Equipment; 100 crore, subject to savings within savings within same section of
3. Building and Structure; same section of the Grant the Grant
4. Infrastructural Assets;
5. Arms and Ammunitions;
and
6. Land

New Instrument of Service (NIS)

3. The financial limits for the ‘New Instrument of Service’ shall be as under:

Object Heads Reporting Limit Prior Approval of Parliament

1. 2. 3.

1. Investment; upto 20% of the original appropriation* Above 20% of the original
2. Loans and advances; appropriation (15-digit line item)
3. Subsidies; OR
4. Machinery and equipment; OR
5. ICT Equipment; upto ₹ 100 crore whichever is higher
6. Building and Structures; [subject to savings within same section of Above ₹ 100 crore, whichever is
7. Infrastructure assets; the Grant] higher
8. Arms and ammunitions [subject to savings within same
9. Land; section of the Grant]
10. GIA Capex;
11. GIA General;
12. GIA Salary

All other Object Heads Each case to be decided on merits

(see para 2 & 3 of the OM No. 1(22)-B(AC)/2022 dated 23.02.2024)
*refers to the 15-digit numeric code in respect of civil Ministries or final unit of appropriation available in the Detailed Demand
for Grants in respect of non-civil Ministries

97
ANNEXURE - II TO APPENDIX - 3
[ See Paragraph 11 of Appendix - 3/Rule 63 ]

MEMORANDUM FOR PROPOSALS INVOLVING

EXPENDITURE ON NEW SERVICE OR NEW INSTRUMENT OF SERVICE
Government of India
Ministry of.......................................
Department of.................................
New Delhi, the................................

MEMORANDUM
1. Statement of proposal :
(a) Title of the proposal / scheme.
(b) Description of the proposal / scheme and its objects.
(c) Justification for the proposal / scheme and what alternatives have been considered.
(d) Description of the manner in which the proposal / scheme is proposed to be implemented including
mention of agency through which the scheme will be executed.
(e) Schedule of programme and target date of completion.
2. Financial implications of the proposal:
(a) Nature of the scheme (Central Sector Scheme or Centrally Sponsored – or Others.)
(b) Total outlay (recurring and non-recurring separately), its broad details and its year-wise phasing.
(c) (i) Budget allocation, in a scheme; and
(ii) Budget provision in the current financial year;
if no Budget provision exists, how is the expenditure proposed to be met?
(d) Foreign exchange component of the outlay and how it is proposed to be met.
(e) Component of grant, loan and subsidy, if any, in the total outlay involved and their proposed terms.
(f) Number of posts, their pay scales and the basis adopted for staffing (Statement attached).
(g) Broad details of construction works, their justification and basis of estimates (Statement attached).
(h) Requirement of stores and equipment together with justification and cost (Statement attached).
(i) Achievement / return expected and other economic implications, if any.
3. (a) Comments, if any, of the NITI Aayog (for Schemes only).
(b) Comments, if any, of other Ministries / Departments which may have been consulted.
4. Supplementary information, if any.
5. Points on which decision / sanctions are required.

Secretary to the Government of India.

Ministry of........................................
Department of..................................

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APPENDIX – 4
[See Note below Rule 52]

PROCEDURE FOR COMPILATION OF

DETAILED DEMANDS FOR GRANTS

1. The Demand for Grants are presented to Parliament at two levels. The Main Demands for Grants are presented
to Parliament by the Ministry of Finance along with the Annual Financial Statement while the Detailed Demands
for Grants are laid on the Table of the Lok Sabha by the concerned Ministries a few days in advance of the
discussion of the respective Ministries Demands in that House.
Both the Main Demands for Grants as also the Detailed Demands for Grants comprise three parts each, viz.-
Part - I shows the Service for which the Demand (or Appropriation) is intended and the estimates of the gross
amount, separately for Voted and Charged Expenditure, under Revenue and Capital (including Loan) sections
required in the ensuing year in respect of that Service.
Part - II shows break up of the estimates separately. In the Main Demands for Grants, the break up is exhibited
up to the level of Major Heads of Account which correspond to functions of the Government.
In the Detailed Demands for Grants the break up in respect of activities/schemes/organization up to the object
head level is given.
The Detailed Demands for Grants also exhibit actuals of the previous year in Part - II.
Both in the Main Demands for Grants as well as in the Detailed Demands for Grants, the details of recoveries
taken in reduction of expenditure provided for in the Demand or Appropriation are also depicted.
2. All Detailed Demands for Grants of a Ministry / Department are consolidated in a single volume and presented
to Lok Sabha by the concerned Ministry / Department. The Detailed Demands show ‘actual expenditure’ as
per accounts in the previous year, Budget and Revised Estimates for the current years and Budget Estimates
for the ensuing year.
(i) The process of compilation should start in July / August with the preparation of a manuscript skeleton.
Manuscript skeletons of Detailed Demands for the ensuing year should be prepared by using the printed
Detailed Demands for the current year by making necessary alterations therein. New sub-heads
sanctioned by the Ministry of Finance, if any, and those expected to be required should also be added in
the manuscript at appropriate places. The manuscript should then be sent to the designated press for a
proof. Where necessary, a second proof may be obtained. The printed skeletons should be available with
the Ministries/ Departments preferably by the 15th October each year.
(ii) Two copies of the Demand skeleton may then be sent to the Principal Accounts Officer, as the case may
be, for filling the ‘Actuals’ column for the previous year and to return one copy duly filled in.
(iii) In the master copy of the Demand, the Ministry / Department will then post (1) the figures of actuals as
reported by the Principal Accounts Officer / Accountant-General; (2) Revised Estimates for the current
year and the Budget Estimates for the ensuing year from the office copy of the SBEs /Demands for Grants
sent to Ministry of Finance. While posting these entries, care should be taken to ensure that –
(a) “Charged” items are shown in italics and are not mixed up with “Voted” provisions;
(b) posting is done accurately against the proper item / head of account including “recoveries”, if any,
taken as reduction of expenditure;
(c) new items are inserted at the proper place under the relevant minor head;
(d) totals of sub-heads, minor heads, major heads, etc., are correctly worked out and posted; that totals
of Revenue section and Capital section as well as the grand totals are correct and show “Charged”
and “Voted” figures distinctly; and
(e) new sub-head (opened through Supplementary Demands) or otherwise or any change in the
numbering and nomenclature sanctioned by the Budget Division since the proof of the skeleton
should also be incorporated in the Master Copy.
NOTE :–A sub-head should appear in the Demand only when there is provision thereunder, either in the
current year(Budget or Revised) or the ensuing year. Wherever only actuals of the previous year pertaining
to a sub-head are to be exhibited, this should be done by inserting suitable footnote on the relevant page.
(iv) The process of compilation and printing of the Demands should be undertaken in stages.
3. The first proof of individual Demands may be obtained after posting actuals of previous year and other than
Scheme estimates (by 15th December). The second proof may be similarly obtained (by 15th January) after
”Scheme” Revised estimates are posted in the first proof. As soon as “Scheme” provisions for the ensuing year
are finalized and communicated by the Ministry of Finance, they should be posted in the second proof. Before
obtaining the third proof, the following material may also be added.

99
(A) Main Demands for Grants :
(i) Notes on the Demands for Grants highlighting the following :-
(a) The objectives of the concerned Ministry / Department, how the programmes undertaken or
contemplated contribute towards attainment of such objectives and the agencies entrusted with the
execution of such programmes;
(b) Details of important provisions included in Demands for Grants with particular emphasis on Scheme
provisions and new items of expenditure;
(c) Cogent reasons for significant variations between the Budget Estimates and Revised Estimates for
the current year and between the Revised Estimates, for the current year and the Budget Estimates
for the ensuing year;
(d) Provisions for subsidy in lieu of interest on loans by the Government or token provisions for
concessional rate of interest along with number of likely cases involved and financial implications,
if determinable; and
(e) Complete details of the estimated cost of a project together with its economics and financial
implications (whenever these estimates are revised and the cost of escalation exceeds 20 per cent
of the sanctioned cost or Rs. 3 crores, whichever is more, full reasons therefor and the effect thereof
on the economics of the projects should also be included in the Notes on Demands).
(ii) A statement giving details of provisions in the Budget which attract limitations of “New Service”/”New
Instrument of Service”.
(B) Detailed Demands for Grants :
The Detailed Demands for Grants will be accompanied by the following schedules/ statements:-
(i) Schedule showing the estimated strength of establishment and provision therefor.
(ii) Statement showing project-wise provision for expenditure on externally aided projects in the Central
Schemes.
(iii) Schedule showing provision for payment of grants in aid to non-Government bodies.
(iv) Statement showing details of individual works and projects costing Rs. 5 crore or above.
(v) Statement showing revised cost estimates of projects of public sector enterprises and departmental
undertakings.
(vi) Statement showing transfer or gift of Government properties of value exceeding Rs. 5 lakhs to non-
Government bodies.
(vii) Statement showing contributions to International bodies. This statement will include only items of
contribution, membership fees to international bodies, which constitute revenue expenditure. Subscriptions
to international bodies, which represent investments and are accounted for in the Capital section, are to be
excluded from it.
(viii)Statement showing guarantees given by the Central Government and outstanding as on 31st March of
the preceding year.
(ix) Statement showing grants-in-aid exceeding Rs. 5 lakhs (recurring ) or Rs. 10 lakhs (non-recurring) actually
sanctioned to private institutions/organizations/ individuals.
4. In addition the Detailed Demands for Grants will also include where necessary, “Notes on Important Projects
and Schemes”, e.g., where the Ministry / Department do not bring out performance Budgets.
5. The third proof on receipt from the press should be thoroughly checked for accuracy of all estimates and other
data, as these must necessarily conform with the main Demands for Grants. Therefore, for obtaining page
proof, all pages should be serially numbered and table of contents prepared. The page proof received from the
Press should be fully scrutinized.
6. A sample printed copy of the Demands should be scrutinized on receipt from Press and where necessary an
errata may be prepared, got printed and pasted by the Press in individual copies of the Printed Demands.
7. The Demands of smaller Departments like Lok Sabha, Rajya Sabha, Department of Parliamentary Affairs,
Staff, Household and Allowances of the President, Secretariat of the Vice-President and Union Public Service
Commission which are clubbed in a single volume are to be prepared and presented by the Ministry of Finance.

100
APPENDIX – 5
[Rule 66]

PROCEDURE TO BE FOLLOWED IN CONNECTION

WITH THE DEMANDS FOR SUPPLEMENTARY GRANTS

An excess over the sanctioned Grant or Appropriation may arise owing to either –
(a) an unforeseen emergency; or
(b) under-estimated or insufficient allowance for factors leading to the growth of expenditure. In the case of an
excess of either type the Head of the Department or the Controlling Officer concerned should proceed as
follows :-
(i) He should, in the first place, examine the allotments given to other Disbursing Officers under the same
detailed head within the unit of appropriation, and transfer to the Disbursing Officer who requires an
additional allotment such sum as can be permanently or temporarily spared. Since appropriation audit is
ordinarily conducted against total allotments for a unit, re-appropriation in the technical sense of the word
is not involved in such cases. The process amounts only to redistribution which the Controlling Officer can
ordinarily effect without reference to any other authority.
(ii) Should he find such redistribution impossible he should examine the allotments against other detailed
heads inside the primary units of appropriation, with the object of discovering probable savings and effecting
a transfer. Where such redistribution is feasible, he should if he has been vested with the necessary powers,
carry it out. Otherwise, he should obtain the sanction of the competent authority.
(iii)If the provision of funds from within the primary units proves to be impossible, an examination of the whole
grant should be undertaken to see whether there are likely to be savings under any of the other units of
grant or appropriation which can be utilized to meet it. If so, he should proceed as indicated in Clause (ii)
above.
(iv)If such savings are not available, it should be seen whether special economies can be effected under other
primary units of appropriation. If funds cannot be provided by either of these methods, it will have to be
considered whether the excess should be met by postponement of expenditure or whether an application
for supplementary grant or appropriation should be made.
(v) The Supplementary Demand for Grants shall be presented to the Parliament in a number of batches as
decided by the Ministry of Finance, Department of Economic Affairs. The first batch shall normally consist
of requirements of the following nature :-
(a) Cases where advances from Contingency Fund of India have been granted, which are required to
be recouped to the Fund.
(b) Payment against a court decree, which cannot be postponed; and
(c) Cases of additional requirement of funds for making immediate payments, which can be met by re-
appropriation of savings in the Grant but attract the limitation of New Service / New Instrument of
Service.
(vi)All applications for supplementary grants or appropriations should be submitted by the Department of the
Central Government administratively concerned to the Ministry of Finance on such dates and in such forms
/ batches as may be prescribed by the latter from time to time.
(vii)On receipt of an application for a supplementary grant, the Ministry of Finance will review the position of
the grant of appropriation as a whole with reference to the known actuals of the year to date and the actuals
and estimates for previous years. If after this examination, the Ministry of Finance comes to the conclusion
that it should be possible for the Administrative Department to meet the expenditure from within the
sanctioned grant either from normal savings or by special economies or in the last resort by judicious
postponement of other expenditure or in the last resort by judicious postponement of other expenditure, the
Administrative Department will be so informed and no supplementary demand will be presented to
Parliament. If, on the other hand, the Ministry of Finance considers that a supplementary grant will be
necessary, a demand will be placed before Parliament.
(viii) If during the course of the year it is found necessary to incur expenditure on a ‘New Service’ not provided for
in the annual budget the Administrative Department shall explain to the Ministry of Finance why the expenditure
was not provided for in the original budget and why it cannot be postponed for consideration in connection with
the next budget. The Ministry of Finance, if satisfied on these points, will consider whether it would not be
reasonable to ask the department concerned to curtail its other expenditure so as to keep the total within the
grant. Ordinarily, no “new service” or item will be accepted by the Ministry of Finance, unless the department
concerned can guarantee that the extra expenditure will be met from normal savings or by special economies
within the grant. Cases which involve additional grant will normally be accepted by the Ministry of Finance only

101
if they relate to matters of real imperative necessity or to the earning or safeguarding of revenue. The demand
for a supplementary grant of appropriation or a token vote in respect of a “new service” will be presented to
Parliament as soon as practicable after the need arises.

NOTE. –The expression ‘New Service’ wherever used in this Appendix includes – ‘New Instrument of Service’.

102
APPENDIX – 6
[Rule 67. (4)]

THE CONTIGENCY FUND OF INDIA RULES

SRO 1358. - In exercise of the powers conferred by Section 4 of the Contingency Fund of India Act, 1950 (XLIXof
1950), the Central Government hereby makes the following rules:-

CONTINGENCY FUND OF INDIA RULES

1. These rules may be called the Contingency Fund of India Rules.

2. The Contingency Fund of India shall be held on behalf of the President by the Secretary to the Government of
India, Ministry of Finance, Department of Economic Affairs.
3. An amount equivalent to forty per cent of the Fund corpus shall be placed at the disposal of the Secretary,
Ministry of Finance, Department of Expenditure for the purpose of meeting unforeseen expenditure, and
beyond this limit, all further Contingency Fund releases shall be made with the approval of Secretary to the
Government of India, Department of Economic Affairs, after the approval of Secretary to the Government of
India, Department of Expenditure.
4. Subject to the provisions of Rule 5 below, all applications for advances from the Fund shall be made to the
Secretary to the Government of India, Ministry of Finance, Department of Expenditure. The applications shall
give -
(i) brief particulars of the additional expenditure involved,
(ii) the circumstances in which provision could not be included in the budget,
(iii) why its postponement is not possible,
(iv) the amount required to be advanced from the Fund with full cost of the proposal for the year or part of the
year, as the case may be, and
(v) the grant or appropriation under which supplementary provision will eventually have to be obtained.
5. Applications for advances required shall be made to the Secretary to the Government of India, Department of
Expenditure and applications for advances of new loans shall be made to the Secretary to the Government of
India, Department of Economic Affairs, in the manner provided for in Rule 4.
6. Advances from the Fund shall be made for the purpose of meeting unforeseen expenditure including
expenditure on a new service not contemplated in the annual financial statement.
7. A copy of the order sanctioning the advance, which shall specify the amount, the grant or appropriation to
which it relates and give brief particulars by sub-heads and units of appropriation of the expenditure for meeting
which it is made, shall be forwarded by the Ministry of Finance to the Audit and Accounts Officers concerned.
8. (1) All expenditure so financed shall be regularized through the Supplementary Estimates presented to
Parliament unless such advance has been resumed to the Contingency Fund in accordance with the
provisions of sub-rule (2).
NOTE 1. -While presenting to Parliament Estimates for expenditure financed from the Contingency Fund,
a note to the following effect shall be appended to such Estimates :-
‘A sum of Rs………………………… has been advanced from the Contingency Fund in
………………………and an equivalent amount is required to enable repayment to be made to that Fund.’
NOTE 2. -If the expenditure on a new service not contemplated in the Annual Financial Statement can be
met, ‘wholly or partly’ from savings available within the authorized appropriation, the note appended to the
Estimates submitted shall be in the following form :-
‘The expenditure is on a new service. A sum of Rs…………………… has been advanced from
Contingency Fund in……………….. and an equivalent amount is required to enable repayment to be
made to that Fund.’ The amount, viz., Rs…………………….. can be found by re-appropriation.
‘A part of that amount, viz., Rs…………………………..of savings within the grant and a token vote only is
now
required, viz., Rs…………………………. only.
a vote is required for the balance
(2) As soon as Parliament has authorized additional expenditure by means of a Supplementary Appropriation
Act, the advance or advances made from the Contingency Fund, whether for meeting the expenditure
incurred before the Supplementary Estimates were presented to the Parliament or after they were so
presented, shall be resumed to the Fund to the full extent of the appropriation made in Act.
8. A. If in any case, after the order sanctioning an advance from the Contingency Fund has been issued in

103
accordance with Rule 7 and before action is taken in accordance with Rule 8, it is found that the advance
sanctioned will remain wholly or partly unutilized, an application shall be made to the sanctioning authority for
cancelling or modifying the sanction, as the case may be.
8. B.All advances sanctioned from the Contingency Fund to meet expenditure in excess of the provision for the
service included in an Appropriation (Vote on Accounts) Act shall be resumed to the Contingency Fund as
soon as the Appropriation Act in respect of the expenditure on the service for the whole year, including the
excess met from the advances from the Contingency Fund has been passed.
8. C. If during an Election year, two Budgets are presented to the Parliament, all advances, sanctioned from the
Contingency Fund of India during the period between the presentation of first and second Budgets or during
the period between the presentation of the second Budget and the passing of the connected Appropriation Act
to meet expenditure on a service not included in an Appropriation (Vote on Account) Act and the advances
outstanding at the end of the preceding financial year being advances the estimates for which are included in
the second Budget, shall be resumed to the Contingency Fund as soon as the Appropriation Act in respect of
the expenditure on the service for the whole year has been passed.
NOTE.-A suitable explanation regarding the advance and the recoupment thereof shall be incorporated in the
“Notes on Demands for Grants”. Wherever required, such a case will be included in the statement of ‘New
Service’ / ‘New Instrument of Service’ appended at the end of the demands.
9. A copy of the order resuming the advance, which shall give a reference to the number and date of the order in
which the original advance was made and to the Supplementary Appropriation Act referred to in Rule 8, shall
be forwarded by the Ministry of Finance and the Financial Officers concerned, in addition, to the Audit and
Accounts Officers concerned. In addition, the Ministry of Finance shall forward copies of such orders to the
Accountant General, Central Revenues, and the Director of Railways Audit if pertaining to the Railways.
10. An account of the transactions of the Fund shall be maintained by the Ministry of Finance in Form ‘A’ annexed
to these rules.
11. Actual expenditure incurred against advances from the Contingency Fund shall be recorded in the account
relating to the Contingency Fund in the same details as it would have been shown if it had been paid out of the
Consolidated Fund.

[Updated vide DoE’s OM No.8(18)/2021/E.II.A dated 06.05.2022 in view of DEA OM F.No.4(13)-B(SD)/2021 dated 18.04.2022]

104
ANNEXURE FORM ‘A’
[See Paragraph 10 of Appendix-6]

CONTINGENCY FUND OF INDIA

Amount of the Fund Rs........................................................

SI. Date of Number and Number Number Amount Supplementary Amount of Balance Initials of Remarks
No. transaction name of and and of Appropriation advance after each Officer-in-
Grant of date of the date of advance act providing resumed transaction charge
appropriation application the resumed for the
for order Additional
advance making Expenditure
the
advance
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

NOTE1.-Thebalance should be struck after each transaction.

NOTE2.-The amount of the advances should be entered in Black ink when made and in red ink when resumed.

105
APPENDIX - 7
[See Rule 310 (4) and 310 (5) ]

TRANSFER OF LAND AND BUILDINGS BETWEEN

THE UNION AND STATE GOVERNMENTS

1. These rules apply to the transfer of land and buildings between the Union and the State Governments and
also to the surrender to the State Governments of land belonging to Railways.
The general position under Article 294 of the Constitution is that as from the commencement of the Constitution
-
(a) all property and assets which immediately before such commencement were vested in His Majesty for the
purposes of the Government of the Dominion of India and all property and assets which immediately before
such commencement were vested in His Majesty for the purpose of the Government of each Governor’s
Province, shall vest respectively in the Union and the corresponding State; and all rights, liabilities and
obligations of the Government of the Dominion of India and of the Government of each Governor’s Province,
whether arising out of any contract or otherwise, shall be the rights, liabilities and obligations respectively of
the Government of India and the Government of each corresponding State subject to any adjustment made or
to be made by reason of the creation before the commencement of the construction of the Dominion of
Pakistan or of the Province, of West Bengal, West Punjab and East Punjab.
Article 294, as is evident, relates to succession to property, assets, rights, liabilities and obligations in certain
cases only; Article 295 of the Constitution which relate to succession to property, assets, rights, liabilities and
obligations in other cases, provides that -
(i) As from the commencement of the Constitution:
(a) all property and assets which immediately before such commencement were vested in any Indian
State corresponding to a State specified in Part -B of the First Schedule shall vest in the Union if
specified in Part - B of the First Schedule shall vest in the Union if the purpose for which such property
and assets were held immediately before such commencement will thereafter be purposes of the
Union relating to any of the matters enumerated in the Union List; and
(b) all rights, liabilities and obligations of the Government of any Indian State corresponding to a State
specified in Part -B of the First Schedule, whether arising out of any contract or otherwise, shall be the
rights, liabilities and obligations of the Union Government, if the purposes for which such rights were
acquired or liabilities or obligations were incurred before such commencement will thereafter be
purposes of the Union Government relating to any of the matters enumerated in the Union List:
subject to any agreement entered into in that behalf by the Union Government with the Government
of that State.
(ii) Subject as aforesaid, the Government of each State specified in Part ‘B’ of the First Schedule shall, as from
the commencement of the Constitution, be the successor of the Government of the corresponding Indian
State as regards all property and assets and all rights, liabilities and obligations, whether arising out of any
contract or otherwise, other than those referred to in Clause (1).
All property and assets, which include land and buildings, and which vest in the State Government under
Articles 294 and 295 of the Constitution or otherwise shall be at the disposal of the respective State
Governments, who will be at liberty to dispose them of by sale, mortgage, etc., and the proceeds thereof
shall be credited to the revenues of the respective State Governments.
From the commencement of the Constitution, the transfer of land between the Union and the State
Government shall be regulated by mutual agreement except when they are acquired under some Act. The
Union Government have laid down the following principles to be observed in regard to certain points :-
(i)(a) When land belonging to a private party has to be acquired on behalf of the Union Government
acquisition shall be at the expense of that Government.
(b) In cases where the Union Government require any land, which is in occupation of the State
Government, to be transferred to them, the amount payable by the Union Government will ordinarily
be the market value of the land and buildings, if any, thereon.
(c) The amount payable will include the capitalized value of land revenue assessable on the land when
the transfer causes actual loss of land revenue to the State Government.
(d) Solatium of 15 per cent payable under the Land Acquisition Act will not apply to such transfers.
(ii)Land surplus to the requirements of the Union Government:- When the Union Government no longer
required land in their possession, the Government of the State in which it is situated will be given the option
of assuming possession of the whole or any portion thereof subject to the following conditions:-
(a) the Union government themselves shall be the judges of whether they require to retain any particular
land or not;

108
(b) if the State Government desire to assume possession of the land, the option to do so shall be exercised
within six months of the date on which the Union Government signify their intention of surrendering the
land;
(c) the amount payable for the land will in all cases be its market value at the date of transfer;
(d) when the State Government desire to assume possession of only a portion of the land surrendered,
they shall be entitled to do so only if the value of the land as a whole is not materially reduced by the
division; and
(e) if the State Government do not desire to assume possession of any land on the foregoing terms, the
Union Government will be free to dispose it of to a third party. Before, however, so disposing of the
land, the Union Government will consult the State Government as to the levy of ground rent or
assessment and the conditions, if any, subject to which it should be sold and they will, as far as
possible, dispose of the land subject to the conditions which the State Government may desire to
impose. The Union Government are not, however, bound to obtain the concurrence of the State
Government in all cases, and in cases of disagreement the Union Government shall be the sole judge
of the terms and conditions to be imposed.
(i) Determination of Disputes as to Titles. - Disputes as to title between the Union Government and a State
Government shall be determined by the Supreme Court.
2. Market value defined. -Market value when applied to land may be defined as the price which the land would
fetch if sold in the open market subject to the ground rent or assessment shown against it in the revenue
registers, or, if no ground rent or assessment shown against it in the revenue registers, subject to a ground
rent or assessment levied at the rate at which ground rent or assessment is actually being levied on similar
lands in the neighbourhood excluding all cases in which such similar lands in the neighbourhood are held
free of ground rent or assessment at favourable or unfavourable rates of ground or assessment. This is the
market value which has to be credited or debited, as the case may be, in the case of all transactions
between the State Governments and the Union Government or between the Union Government and State
Governments or the Railways.

109
APPENDIX - 8
[ See Rule 286. (3) and Rule311]

CHARITABLE ENDOWMENTS AND OTHER TRUSTS

I. CHARITABLE ENDOWMENTS

1. The duties of the Treasurer of Charitable Endowments for India are prescribed in the Charitable Endowments
Act, 1890 (Act VI of 1890), and the rules framed thereunder, which are printed as an Annexure hereto.
2. Under sub-section (1) of Section 3 of the Charitable Endowments Act, the Deputy Secretary/Director (Budget)
in the Ministry of Finance, Department of Economic Affairs, nominated for the purpose, has been appointed
ex officio to be the Treasurer of Charitable Endowments for India with effect from the 1st April, 1954. All the
property of Charitable Endowments, the objects of which extend beyond a single State or which are objects to
which the executive authority of the Central Government extend, vest in him.
The Treasurer of Charitable Endowments for India is authorized to employ the agency of the Treasurer of
Charitable Endowments of a State, with the consent of the State Governments, for discharging any of the
functions assigned to him under the rules referred to in Paragraph 1 above.
3. When a copy of a vesting order is received by the Treasurer of Charitable Endowments for India, he should at
once place himself in communication with the persons who appear from the order to be the holders of the
documents of title relating to the property or of the securities mentioned in the order, and request them to
forward the Title Deeds, or securities in a registered cover and to insure the cover for Rs. 100. These do not
require to be endorsed, as the vesting order operates to transfer the securities to the Treasurer.
4. At every change of Office of the Deputy Secretary/Director (Budget) in the Ministry of Finance, Department of
Economic Affairs nominated for the purpose, a formal transfer of charge of the Treasurer of Charitable
Endowments for India should also take place and as separate charge report, supported by a statement of the
total of the balances of the Funds vested in the Treasurer, duly signed by the relieved and the relieving
Treasurers should be sent to Government.
A list of receipts granted by the Reserve Bank in acknowledgement of the securities forwarded to it for safe
custody as also of the securities kept in the custody of the Treasurer should also be prepared and signed by
the relieved and the relieving Treasurers, and sent to Government along with the charge report.
NOTE. -Whenever there is a change in the Office of a Treasurer of Charitable Endowments of a State who
has been acting as an agent of the treasurer of Charitable Endowments for India, a charge report prepared in
the manner indicated in this paragraph should be furnished to the latter.

II. MISCELLANEOUS TRUST ACCOUNTS

5. If, under any general or special orders of Government, an Audit Officer / Accounts Officer or any other
Government officer is required to act in his official capacity as a Trustee or Depository of any public or quasi-
public fund, which does come within the scope of the accounts of Government, or of any Charitable
Endowment and is not a Government security held in trust under the rules in Chapter IX of the Government
Securities Manual, such an officer should endeavour to have the trust vested, if possible, in the Treasurer of
Charitable Endowments for India; but, if that course is not possible, he should open an account with the State
Bank of India, or with any other approved Bank, for the deposit of moneys received by him on account of Trust.
Full and clear record of all transactions relating to the trust fund should be kept in the books of accounts in his
personal custody in a form complying with the terms and conditions of the Trust. The securities, if any,
deposited with him should be dealt with in accordance with the instructions contained in Chapter IX of the
Government Securities Manual.
6. The books of accounts should be supported by a short statement descriptive of the nature and obligation of
the Trust, with reference to the documents bearing upon it, so that any other Government officer on receiving
charge may know by reference to it exactly what his obligations are in the matter.
NOTE. -The receipt and disposal of interest should be recorded in these accounts which are meant for the
principal of the Trusts only.
7. The accounts should be balanced and closed every 31st day of March. They should also be balanced and
closed when the Government officer acting as the Trustee makes over charge of his office to a successor or
substitute, a balance sheet being appended to the charge report and signed both by the officer receiving and
the officer giving over charge.
8. The accounts will be subject to such audit check as may be prescribed by Government.

110
ANNEXURE
[ See Paragraph 1 of Appendix -8 ]

In exercise of the powers conferred by Section 13 of the

Charitable Endowments Act, 1890 (VI of 1890), and in supersession of the late Home
Department Notification No. 1569 - Judicial, dated the 24th October, 1890, the Central
Government is pleased to make the following rules and forms :-

THE CHARITABLE ENDOWMENTS (CENTRAL) RULES, 1942

1. Short Title. -
(1) These rules may be called the Charitable Endowments (Central) Rules, 1942.
(2) They apply to charitable endowments the objects of which extend beyond a single State or are objects, to
which the executive authority of the Central Government extends.
2. Interpretation.- In these rules -
(a) “the Act” means the Charitable Endowments Act, 1890;
(b) “Treasurer” means the Treasurer of Charitable Endowments for India for the time being, appointed under
sub-section (1) of Section 3 of the Act, and includes such other officer as the Treasurer may appoint to
discharge any of the functions assigned to him under these rules;
(c) “Form” means a form appended to these rules.
3. Previous publication of vesting orders and schemes.-On cases in which private persons apply for a vesting
order or a scheme or modification of a scheme, and in all cases in which it is proposed to depart in any respect
from the ascertained wishes or presumable intentions of the founder of an endowment, there shall ordinarily,
and unless the Central Government otherwise directs, be precious publication of the proposed vesting order or
scheme or modification.
4. Mode of previous publication.
(1) Unless the Central Government is of opinion that a proposed vesting order or proposed scheme or
modification of a scheme may be made or settled without previous publication, it shall publish a draft of the
proposed order, scheme or modification or a sufficient abstract thereof, for the information of persons likely
to be affected thereby.
(2) The publication shall be made in the Official Gazette and in such other manner as the Central Government
may direct.
(3) A notice specifying a date on or after which the proposed order, scheme or modification will be taken into
consideration by the Central Government should be published with the draft or abstract.
(4) The Central Government shall consider any objection or suggestion which it may receive from any person
with respect to the proposed order, scheme or modification thereof before the date specified in the notice
under sub-rule (3).
5. Costs. The cost of the previous publication under Rule 4 of any proposed order, scheme or modification of a
scheme, and any other costs incurred or which may be incurred in the making of the orders or in the settlement
of a scheme or modification of a scheme, shall be paid by the applicant for the order, scheme or modification,
as the case may be, and, if the Central Government so directs may be paid by him out of any money in his
possession pertaining to the trust to which his application relates.
6. Securities which may vest in the Treasurer.-No securities for money except the securities mentioned in
Clauses (a), (b), (bb), (c) and (d) of Section 20 of the Indian Trusts Act, 1882 (II of 1882), shall be vested in the
Treasurer.
7. Accounts of trusts consisting of immovable property.-In the case of property vested in the Treasurer other
than securities for money, the person acting in the administration of the trust and having, under sub-section (3)
of Section 8 of the Act, the possession, management and control of the property and the application of the
income thereof, shall in books to be kept by him, regularly enter or cause to be entered full and true accounts
of all moneys received and paid respectively on account of the trust, and shall, on the demand of the Central
Government, submit annually to such public servant as the Central Government may appoint in this behalf, in
such form and at such time as the Central Government may prescribe, an abstract of those accounts and such
returns as to other matters relating to the administration of the trust as the Central Government may from time
to time see fit to require.
8. Fees.
(1) The following are prescribed as the fees to be paid to the Central Government in respect of any property
vested under the Act in the Treasurer :-
(i) In the case of property other than securities for money, the actual charge incurred by the Treasurer in
the discharge of his functions in respect of the property.

111
(ii) In the case of securities for money, at the rate of one Paisa for every rupee of interest collected.
The fee shall be charged on interest by rounding off the amount to the nearest rupee, fractions of a
rupee below fifty Paisa or more being reckoned as one rupee.
(2) The Treasurer may deduct any fees payable to the Central Government under this rule on account of any
endowment from any money in his hands on account of such endowment. If he holds no such moneys the
amount shall be claimed form the administrators of the endowment.
9. Vesting orders how filed. - All copies of vesting orders received by the Treasurer shall be filed together and
shall be numbered in consecutive order of their receipt; when a sufficient number have been received they
shall be bound in volumes. A note shall be made on each vesting order of any entries in the registers prescribed
under these rules relating to the property vesting in the Treasurer under the order.
10. Registers of securities. - On the receipt of any securities for money, or on their purchase by himself, the
Treasurer shall record their receipt in a register in Form 1. He shall also keep a separate account for each
endowment in Form 2, in which he shall record all receipts including any amount sent for investment, and all
disbursements. In the cash account in Part - II of Form 2 the Treasurer shall record only his own transactions
(such as the payment of the money to the administrator), and not the transactions of the administrators of the
endowment fund.
11. Stock Disposal Register. - The Treasurer shall enter all securities returned or sold by him in a register in Form
3. Returns shall also be entered in Form 2, where the amount returned will be deducted from the capital of the
endowment concerned.
12. Custody of Securities. - On the issue of a vesting order under Section 4 of the Act in respect of any securities
for money, the person authorized under Section 6 of the Act to make the application for such vesting order
shall, as soon as practicable, forward to the Treasurer the said securities. The Treasurer shall, after recording
the receipt of the said securities in the registers kept under Rule10, take steps, as soon as practicable, to have
them converted into stock and keep the stock certificate in his custody. After conversion, entries shall be made
in the Treasurer’s Stock Register in Form 7. A consolidated register showing the securities (e.g., Promissory
Notes and the Stock Certificates) in the custody of the Treasurer shall also be maintained in Form 8.
13. Accounting of Interest. - The Treasurer, on receipt of any interest securities, shall pass it through his General
Trust Interest Account under a special Sub-Head “Interests on Charitable Endowments under Act VI of 1890”.
The interest will then be distributed to the various ledger accounts in the register in Form 2, in which the gross
amounts shall be shown, any deductions for fees, etc., being shown as a charge, and the payment of the
balance to the administrators being shown as a disbursement. The Treasurer shall maintain personal, ledger
account in the Reserve Bank and shall make payment to the administrators by cheques. The entries in the
ledger of interest received shall be taken out and agreed annually with the total amount of the interest drawn.
14. Balance Sheet. -The registers in Form 1 shall show all securities vested in the Treasurer as such. In order to
prove the balance actually held by the Treasurer in his own hands, a balance sheet in Form 4 shall be made
out actually and agreed with the actual securities in the Treasurer’s possession. Such agreement shall be
certified on the balance sheet.
15. Publication of accounts. -A list of all properties vested in the Treasurer and an abstract of the accounts of the
interest and the annual agreement of balance shall be published in the Official Gazette on the 15th June of
each year.
16. Register of property other than securities.-The Treasurer shall enter in a register in Form 5 any property
other than securities which becomes vested in him, and shall record in the same register against the original
entry a note of any property of which he is divested.
17. Form of publication of list and abstract.-The list of properties vested in the Treasurer to be published annually
under Rule 15 shall be in Form 6. Part - I will relate to properties other than securities; Part - III will relate to
securities and will also contain the abstract of accounts required by the Act to be published. The Treasurer
shall demand and receive acknowledgements of the correctness of the balances when so published, from the
administrators of endowment funds or from any one or more of their body who may have been authorized by
the administrators to give such acknowledgements and such acknowledgements shall be furnished within 3
months from the date of publication of accounts in the Official Gazette.
18. Audit.-Arrangements for annual audit of the Treasurer’s accounts shall be made by the Comptroller and Auditor
General.

112
FORM 1

REGISTER OF SECURITIES HELD UNDER ACT VI OF 1890

Particulars of Securities received

From No. and Nature of Distingui- Nominal Total
SI. Date of Number or whom date of Securities, e.g. shing value of nominal Ledger Remarks
No. Receipt brief received forwarding Government number of each value of Folio
description of letter securities each security each
Charitable 3 ½ per cent security separate
Endowments Loan of 1865, endowment
Guaranteed
Railway
Debentures,
etc.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

113
FORM 2
LEDGER ACCOUNT OF SECURITIES HELD UNDER ACT VI OF 1890.

1. Name of Endowment…………
2. Particulars of vesting order…………
3. When vested in Treasurer…………
4. Name of Administrators…………
5. To whom interest is to be sent…………

PART – I Account of Capital

Sl. Particulars Details of Value of each security Amount Date to Initials of

No. (e.g. securities (separate column for of half which Treasurer
Form received or (distinguishing each kind) yearly interest or
1 returned) number, etc.) 3 ½ per Guaranteed interest has Assitant-
cent Loan Railway been in-
of 1865 Deben- paid on Charge
tures receipt
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

NOTE.- The balance of the value columns must be worked out on every day on which there is a new entry.

114
FORM 2

PART-II-CASH ACCOUNT

RECEIPTS EXPENDITURE

Date Particulars Amount Date Particulars Amount

NOTE. To be closed annually to balance. The transactions will not be numerous. A few pages of the ledger (rule
only for the Cash Account) may be left for each account, so that the account may be carried on for several
years without opening a fresh Ledger Account.

115
FORM 3

STOCK DISPOSAL REGISTER

SI. Date of Name of the No. of entries in Amounts How GO’s Official
No. entry Fund or Trust Stock Register disposed of disposed of initials Designation of
Officer

116
FORM 4

BALANCE SHEET OF SECURITIES HELD UNDER ACT VI OF 1890

3 ½ per cent Loan (A pair of columns for each Total

Particulars of 1865 different kind of security
held)
No. Value No. Value
Opening Balance (from last year)
...........Securities received..................
...........Stock Certificates received .....
....................

GRAND TOTAL

Deduct -
Sent to the PDO Reserve Bank of
India for conversion into stock...........
BALANCE
Deduct -
Returned or sold...............................
BALANCE
Add -
Sent for conversion out of which stock
certificates have not been received
..............................
CLOSING BALANCE

Certified that the above closing balance has been compared with the Securities in Treasurer’s possession and has
been found to be agree both as to number and value.

117
FORM 5

REGISTER OF PROPERTIES OTHER THAN SECURITIES

HELD UNDER ACT VI OF 1890

Particulars of vesting order Property held

SI. Name of Administrators of
No. No. Date endowment property Description Value Annual
income if
known
1 2 3 4 5 6 7 8

Title Deeds held

Description Initials of Treasurer or
Date of Where Date of To whom Authority for Assistant-in-Charge Remarks
receipt deposited return returned return

9 10 11 12 13 14 15 16

118
FORM 6
LIST AND ABSTRACT ACCOUNT OF
PROPERTIES HELD UNDER ACT VI OF 1890

PART - I - LIST OF PROPERTIES, OTHER THAN SECURITIES

SI. Particulars of vesting Name of Administrators of Property held

No. order endowment property Remarks
No. Date Descri- Value Annual
ption income
if known
1 2 3 4 5 6 7 8 9

LISTOFABSTRACTPARTACCOUNT-II-OFSECURITIES

Case Name of Persons Particular Total Cash Receipts Cash Balance Remarks
No. endow- in whose s of of expenditure in cash
ment behalf Securities Securities Interest Other Total Payments*
held or Cash cash
dividend Receipts* Receipt
realised s
1 2 3 4 5 6 7 8 9 10 11

* Enter details in these columns

119
FORM 7

TREASURER’S STOCK REGISTER OF

per cent loan of

No. of Serial No. Date of To what fund To whom Amount of Amount of (Pair of Remarks
Case in entry or trust the interest is investment half-yearly columns for
Form No. investment to be interest noting interest
belongs remitted payment order

1 2 3 4 5 6 7 8 9
Rs. P. Rs. P. Rs. P.

120
FORM 8

REGISTER OF CLEAN GOVERNMENT PROMISSORY NOTES AND

STOCK CERTIFICATES HELD BY THE TREASURER
OF CHARITABLE ENDOWMENTS FOR INDIA

Particulars A pair of
SI. Date of In conversion Receipts Disposals columns for
No. entry of noting interest Remarks
for half-year
No. Amounts No. Amounts
ending
1 2 3 4 5 6 7 8 9

121
APPENDIX - 9
[ See Rule320]

DESTRUCTION OF OFFICE RECORDS CONNECTED

WITH ACCOUNTS

The destruction of records (including correspondence) connected with accounts shall be governed by the following
Rules and such other subsidiary rules consistent therewith as may be prescribed by Government in this behalf with
the concurrence of the Comptroller and Auditor-General.
1. The following shall on no account be destroyed :-
(i) Records connected with expenditure, which is within the period of limitation fixed by law.
(ii) Records connected with expenditure on projects, schemes or works not completed, although beyond the
period of limitation.
(iii) Records connected with claims to service and personal matters affecting persons in the service except as
indicated in the Annexure to this Appendix.
(iv) Orders and sanctions of a permanent character, until revised.
(v) Records in respect of which an audit objection is outstanding.

2. The following shall be preserved for not less than the period specified against them :-
Description of records

Sl. No. Main-Head Sub-Head Retention Period Remarks

(1) (2) (3) (4) (5)

1. Payments (I)Expenditure Sanctions not 2 years, or one year after

and covered by Paragraph 1 completion of audit, whichever
recoveries. above (including sanctions is later. Subject to:
Relating to grants-in-aid) (a)Original nomination
being placed in Vol. II
(ii)Cash Books maintained by 10years. of the Service Book of
the Drawing and Disbursing Group ‘D’ Government
Officers under Central servants;
Government Account and
(Receipts and (b)Nomination in
Payments)Rules,1983. original or an
(iii)Contingent expenditure. 3 years, or one year after authenticated copy
completion of audit, thereof being placed
Whichever is later. in Vol. II of the Service
Book/Personal File in
(iv)Arrear claims (including 3 years, or 1 year after
case of other
sanction for investigation, completion of audit,
Government servants.
Where necessary). Whichever is later.
Subject to an
Papers relating to: authenticated copy of
(v)GPF Membership. 1year. the sanction being
(vi)GPF Nomination. 1year-afterfinal placed on the
Settlement of GPF Account. personal file.
(vii)Adjustment of missing credits 1year.
in GPF Accounts.

122
Description of records

Sl. No. Main-Head Sub-Head Retention Period Remarks

(1) (2) (3) (4) (5)
(viii) Final withdrawal from 1 year.
GPF, e.g., for house
building, higher technical
education of children, etc.
(ix) GPF annual 1 year.
statements.
(x)T.A./Transfer T.A. 3 years, or one year after
claims completion of audit,
whichever is later.
2. Budget 3 years. The retention period
Estimates / here related to the
Revised Budget / Revised
Estimates. Estimates as
3. Service compiled by the
Books of: 3 years after issue of final Budget / Accounts
(a) Officials pension/ gratuity payment Section for the
entitled to order. Department as a
retirement / whole.
terminal
benefits.

(b) Other 3 years after they have

employees. ceased to be in service.
4. Leave of:
Account
(a) Officials 3 years after issue of final
entitled to pension/
retirement / gratuity payment order.
terminal
benefits.
(b) Other 3 years after they have
employees. ceased to be in service.
5. Service (a) Nomination relating to 1 year - after settlement of Subject to the
records family pension in and DCR benefits. nomination in
gratuity. original or an
(b) Civil List Gradation/ authenticated copy
Seniority list- 3 years. thereof (where
(i) in the case of original kept with the
Departments preparing . audit)as the may be
bringing out the being placed in Vol.
compilation. II of the Service
Book/ Personal File.
(ii) In the case of other 1 year after issue of
Departments (i.e., those relevant compilation.
supplying information for
such compilation)

123
Description of records

Sl. No. Main-Head Sub-Head Retention Period Remarks

(1) (2) (3) (4) (5)
(c)Alteration in the date of 3years. Subject to suitable entry
birth. being made in
the appropriate service
record and an
authenticated copy of the
order being kept in
Vol. II of Service
Book/Personal file
(d) Admission of previous 3years;or1yearafter – do –
Service not supported by Completion of
Authenticated service Audit, whichever is later
record, e.g., through Subject to a suitable record
collateral evidence. being kept somewhere,
(e)Verification of service. 5years. e.g., in the Service Book or
History Sheet.
6. Expenditure (a) In respect of lower To be weeded out at the
statements. formations. end of financial year.
(b)In respect of To be weeded out after the
Department itself. Appropriation Accounts for
the year have been finalized
(c)Register of monthly To be weeded out
expenditure(Form GFR9) the Appropriation
Accounts for the year have
Been finalized.
7. Surety Bonds 3yearsafter the Bond
executed in Ceases to enforceable.
be favour of a
temporary or a
retiring Govern-
ment servant.
8. (a) Pay Bill . 35 years
register
(b) Office copies 35 years
of Establishment
pay bills and
related schedules
(in respect of
period for which
pay bill register is
not maintained).
(c) Schedules to 3 years, or one year after
the Establishment the completion of audit,
pay bills for the whichever is later
period for which
pay bill register is
maintained.
(d) Acquaintance 3 years, or one year after
Roll. the completion of audit,
whichever is later.

124
Description of records

Sl. No. Main-Head Sub-Head Retention Period Remarks

(1) (2) (3) (4) (5)
9. Muster Rolls. Such period as may be
prescribed in this behalf in
the departmental regulations
subject to a minimum of three
financial years of payment
excluding the financial year of
payment
10. Bill Register 5 years.
Maintained in 5 years
FormTR-28-A
11. Paid cheques The counter foils of
Returned by the paid cheques
BanktotheAudit/ should be preserved
Accounts Office. for the same period as
prescribed for
preservation of paid
cheques, viz., 5 years.
However, in cases
where the counter foils
are required to be
preserved in
connection with
settlement of some
5 years after the contract/ enquiry, etc., these
12. Files, papers and agreement is fulfilled or should not be
Documents terminated. In cases where destroyed unless
Relating to audit objections have been otherwise advised by
contracts, raised, however, the relevant the authorities
agreements, etc. files and documents shall not, conducting the enquiry.
under any circumstances, be The other
instructions contained
allowed to be destroyed till
in this Appendix will
such time as the objections
continue to be
have been cleared to the
applicable in this case
satisfaction of the audit
before the counterfoils
authorities or have been which are more than
reviewed by the Public five years old are
Accounts Committee. actually destroyed.
3 years after the expiry of the
13. Sub-vouchers financial year in which the
expenditure was incurred,
Relating to the subject to completion of
Secret Service administrative audit and issue
Expenditure. of audit certificate by the
nominated Controlling Officer.

125
INSTRUCTIONS
1. The retention period specified in Column (4), in the case of a file, is to be reckoned form the year in which the
file is closed (i.e., action thereon has been completed) and not necessarily from the year in which it is recorded.
2. In the case of records other than files, e.g., registers, the prescribed retention period will be counted from the
year in which it has ceased to be current.
3. In exceptional cases, a record may be retained for a period longer than that specified in the schedule, if it has
certain special features or such a course is warranted by the peculiar needs of the department. In no case,
however, will a record be retained for a period shorter than that prescribed in the schedule.
4. If a record is required in connection with the disposal of another record, the former will not be weeded out until
after all the issues raised in the latter have been finally decided, even though the retention period marked on
the former may have expired in the meantime. In fact, the retention periods initially marked on such records
should be consciously reviewed and, where necessary, revised suitably.

NOTES.-
(1) Before any pay bills/pay registers are destroyed, the service of the Government servants concerned should
be verified under Rule257in accordance(1) with .
(2) The periods of preservation of account records in Public Works Offices are prescribed separately by
Government.
(3) Where a minimum period after which any record may be destroyed has been prescribed, the Head of a
Department or any other authority empowered by him to do so, may order in writing the destruction of such
record in their own and subordinate offices on the expiry of that period counting from the last day of the latest
financial year covered by the record.
(4) Heads of Departments shall be competent to sanction the destruction of such other records in their own and
subordinate offices as may be considered useless, but a list of such records as property appertain to the
accounts audited by the Indian Audit and Accounts Departments shall be forwarded to the Audit Officer and
or the Accounts Officers, as the case may be, for his concurrence in their destruction before the destruction is
ordered by the Head of Department.
(5) Full details shall be maintained permanently, in each office, of all records destroyed from time to time.

126
ANNEXURETOAPPENDIX–9

Destruction of records referred to in Para. 1(iii)of this Appendix

Description of records
Sl. Main-Head Sub-Head Retention Period Remarks
No.
(1) (2) (3) (4) (5)
1. Creation & (I) Continuance / revival of 1 year Subject to particulars
Classification of posts. of sanction being noted in
posts. Establishment/ Sanction
Register.
(ii) Conversion of 10 years – do –
temporary posts.
(iii) Creation of posts. 10 years – do –
(iv) Revision of scales of Permanent in the case of – do –
pay. Departments issuing
orders and
Departments concerned;
other Departments
need keep only the
standing orders, weeding
out superseded ones as
and when
they become obsolete.
(v) Upgrading of posts. 10 years – do –

2. Review for Establishment / Permanent. Where, for any reason the

determining Sanction Register. register is
suitability of re-written, the old volume
employees for will be kept for 3 years.
continuance in
service.
3 years Subject to:
3. Arbitration and (a) the file not being
litigation cases. closed until the award/
judgment become final in
all respects by limitation
or final decision in appeal/
revision; and

(b) cases involving

important issues or
containing material of a
high precedent /
reference value being
retained for an
appropriately longer
period either initially or at
the time of review.

127
Description of Records
Sl. Main-Head Sub-Head Retention Period Remarks
No.
(1) (2) (3) (4) (5)
4. Notices under 1year If such a notice is
Section 80 of followed up by a civil suit,
Civil Procedure it would become
Code. arbitration/ litigation case
and would, therefore,
need to be retained for 3
years.

5. Recruitment. Condonation of break in 5years Subject to a suitable

service. entry being made in the
appropriate service
record and an
authenticated copy of
the order being kept in
Vol. II of Service Book
Personal File.

6. Advance.
housebuilding

(i) Car Advance Rules

(ii) Conveyance
Advance Rules.
(iii) Cycle Advance Rules
(iv) Festival Advance Permanent in the case
Rules of Departments issuing
(v) GPF Advance Rules the rules, orders and
instructions; other
(vi) House Building
Departments need keep
Advance Rules
only the standing rules,
(vii) Motor Cycle/ etc., weeding out the
Scooter Advance superseded ones as
Rules and when they become
(viii) Pay Advance Rules obsolete.
(ix) T. A. Advance Rules
(x) Travel Concession
Rules
(xi) Other Advance Rules
(xii) Grant of car
Advance
(xiii)Grant of Subject to :
conveyance (i) suitable entries being
allowance 1year made in pay bill register;
and (ii) in case of motor
car/motor cycle / scooter
and house building
advances.

128
Description Of records
Sl. Main-Head Sub-Head Retention Period Remarks
No.
(1) (2) (3) (4) (5)
(a)copies of sanction
xiv Grant of cycle
advance 1 year Being placed on
xv Grant of festival Personal files; and
advance (b)mortgage deeds and
xvi Grant of GPF Other agreements
advance Executed being kept
xvii Grant of motor Separately in safe
cycle/scooter Custody for the period
advance They are valid.
xviii Grant of pay
advance 1 year
xix Grant of T. A.
advance
xx Grant of LTC
advance
xxi Grant of other
advance

7. Surety Bonds 3yearsafter the Bond

executed in favor Ceases to be
of a temporary enforceable.
or a retiring
Government
servant.

8. Pension / (i) Rules and Orders Permanent in the case of

retirement. (general aspects.) Departments issuing the
rules, orders and
(ii) In respect of Groups instructions; other
Departments need keep only
‘A’, ‘B’ and ‘C’ the standing rules and
Government servants. orders weeding out the
superseded ones as and
(a) Pre-verification of
when they become obsolete.
pension cases. 3years
(b) Invalid pension
Till one year after the
(c) Family pension last beneficiary of the
(d) Other pensions family pension ceases to
been titled to receive or
5 years whichever is
(e) Gratuity later.
5years
(f) Commutation of 15years
pension after the Bond
ceases to be enforceable.

129
Note – The principle to be adopted in respect of files having financial implications and hence liable to be called by
audit for inspection is that such files should be retained for a period of five years after they have been recorded. If,
at any time during the period of five years, an audit objection having reference to the transaction dealt with in that
file arises, is received, the file will not be destroyed until after the audit objection has been settled to the satisfaction
of the audit. Also, if local audit does not take place within the period of five years, the Head of the Office should
ascertain from the audit authorities whether they have any objection to the files relating to the earlier years, due for
weeding out by the application of the five year formula, being destroyed or retained for a further period for scrutiny
by the audit party and, if so, for what period.
While records may be reviewed and weeded out at periodical intervals in the light of the retention periods prescribed
to avoid their build-up, the attempt should be to make a continuous and conscious effort throughout the year to
weed out unnecessary records. In other words, the working rules should be “weed as you go”.

INSTRUCTIONS:
1. The retention period specified in Column (4) in the case of a file, is to be reckoned from the year in which
the file is closed (i.e., action thereon has been completed) and not necessarily from the year in which it is
recorded.
2. In the case of records other than files, e.g., registers, the prescribed retention period will be counted from
the year in which it has ceased to be current.
3. In exceptional cases, a record may be retained for a period longer than that specified in the Schedule, if it
has certain special features or such a course is warranted by the peculiar needs of the Department. In no
case, however, will a record be retained for a period shorter than that prescribed in the schedule.
4. If a record is required in connection with the disposal of another record, the former will not be weeded out
until after all the issues raised on the latter have been finally decided, even though the retention period
marked on the former may have expired in the meantime. In fact, the retention periods initially marked on
such records should be consciously “reviewed and where necessary revised suitably”.

130
APPENDIX - 10
[See Rule 61 and Rule 69]

“CHECK AGAINST PROVISION OF FUNDS”

The pre-check to be applied to all payments by the departmentalized Accounts Officers includes a check against
provision of funds also. It is an important part of the functions of the Accounts Office to see that no payment is made
in excess of the budget allotment. In order to exercise an effective check in this behalf, a separate register (DDO-
wise Bill Passing-cum-Expenditure Control Register –Form CAM –9) should be maintained in the Accounts Officer
for each Drawing Officer and by sub-heads and units of appropriation so as to ensure at the time of passing each
bill that the amount of the bill under check is covered by Budget allotment. If the amount of any bill leads to excess
over the Budget allotment or is not covered by an advance from the Contingency Fund, the Accounts Officer should
decline payment under advice to the authority controlling the grant so that the latter could arrange for additional
funds. An Appropriation Audit Register (Form CAM – 62) shall be maintained.

NOTE. – In cases where payment of a bill/claim would lead to excess over the provision under any unit of
appropriation the payment may be made by the Pay and Accounts Office only on receipt of an assurance in writing
from the Ministry/Head of Department controlling the grant that the expenditure involved is not on a New Service,
or New Instrument of Service; that necessary funds to accommodate the expenditure will be provided for in time by
issue of re- appropriation order, etc., that a note to the effect has been kept for further action, and that the grant as
a whole (i.e., separately under Revenue and Capital Sections) is not likely to be exceeded. This applies in respect
of any new item of expenditure, provision for which does not exist in the Budget (as distinct from expenditure on
“New Service” or “New Instrument Service” not provided in the Budget) as well as in cases where the existing
provisions is not sufficient to cover the payments. In case of an urgent requirement of expenditure attracting
the provisions of New Service/New Instruments of Service and thereby supplementary demands through
theapproval of Parliament, the same should be referred to Ministry of Finance. The excess expenditure in
such cases can be allowed by the concerned Financial Advisers only on the specific approval of Secretary
(Expenditure) that the necessary funds will be made available through the next batch of supplementary
demands for grant.
If such a contingency in regard to inevitable payment of a bill should arise towards the close of financial year and
the grant as a whole is likely to get exceeded thereby, order of the FA on behalf of the Chief Accounting Authority
would have to be sought.
In case the additional funds required are to be made available merely by reallocation (and not by re- appropriation)
of savings, if any, under the same sub-head of appropriation, the related claim will be passed for payment only after
additional funds therefor are allocated in writing by the Controlling Officer.

131
APPENDIX - 11
[ See Rule 225 (viii) (b) ]

FORMULA FOR PRICE VARIATION CLAUSE

The formula for Price Variation should ordinarily include a fixed element, a material element and a labour element.
The figures representing the material element and the labour element should reflect the corresponding proportion
of input costs, while the fixed element may range from 10 to 25%. That portion of the price represented by the fixed
element will not be subject to variation. The portions of the price represented by the material element and labour
element alone will attract Price variation. The formula for Price variation will thus be :

P1 =P0FF +a + b- P0 M0

Where P1 is the adjustment amount payable to the supplier (a minus figure will indicate a reduction in the Contract
Price)
P0 is the Contract Price at the base level.
F is the Fixed element not subject to Price variation.
a is the assigned percentage to the material element in the Contract price.
b is the assigned percentage to the labour element in the Contract Price.
L0 and L1 are the wage indices at the base month and year and at the month and year of calculation respectively.
M0 and M1 are the material indices at the base month and year and at the month and year of calculation
respectively.
If more than one major item of material is involved, the material element can be broken up into two or three
components such as Mx, My &Mz. Where price variation clause has to be provided for services (with insignificant
inputs of materials) as for example in getting Technical assistance normally paid in the form of per diem rates, the
price variation formula should have only two elements viz. a high fixed element and a labour element. The fixed
element can in such cases be 50% or more, depending on the mark-up by the supplier of the Periderm rate vis-à-
vis the wage rates.

132
APPENDIX - 12
[See Rule 279 (1).]

RATES OF GUARANTEE FEE

Guarantee fees based on credit score and tenor for Domestic as well as external borrowings

Less than or equal to 5 years More than 5 years

Category A 0.5 0.6
Category B 0.7 0.9

Suggested Framework for Risk assessment of Guarantee proposals

Ministries/Departments are required to undertake risk assessment of the proposals received from CPSUs
before sending them to Ministry of Finance. Following ratios may be calculated for assessing the risk:

i) Debt Service Coverage Ratio: It indicates the ability of a company to use its operating income to repay
all its debt obligations, including repayment of principal and interest on both short-term and long-term debt.

Earnings before Interest, Tax, Depreciation & Amortization(EBITDA)

Interest + Principal

Category A Category B
More than or equal to 1.25 Less than 1.25

ii) Current Ratio (CR): It depicts the ability to meet short-term liabilities from selling short-term assets, and
calculated as under:

Current assets
Current liabilities

Category A Category B
More than or equal to 1.5 Less than 1.5

iii) Debt to Equity Ratio (D/E): It depicts the ability to pay off debt in future and calculated as under:

Total liabilities
Shareholders’ equity

Category A Category B
Less than or equal to 1 More than 1

Overall Risk Rating Less than or equal to 1.5 More than 1.5
Category A Category B

133
Example: The above framework has been illustrated as under:

DSCR* D/E* CR* Calculation= Overall risk

Average of rating
(Ratings
Assigned)
Company 1 1.75 0.25 2.10 = 1 (1+1+1)/3) Category A
Company 2 1.20 1.20 1.50 = 1.67(2+2+1)/3) Category B
Company 3 0.90 1.80 0.80 = 2 (2+2+2)/3) Category B

Note: Overall Risk Rating shall be calculated by taking simple mean of all the ratios by assigning 1 and 2 values to
‘A or ‘B’ category.

*Three years’ average ratio may be considered for calculating the overall risk rating.

****

[Updated vide DoE’s OM No.8(18)/2021/E.II.A dated 20.07.2022 in view of DEA OM F.No.12(13)-B(SD)/2020-Parl dated 10.06.2022]

134
FORM GFR 1
[ Rule 65 (4) ) ]

APPLICATION FOR AN ADDITIONAL APPROPRIATION,

YEAR……………………………… FOR DEPARTMENT

Budget Head Original Expenditure Additional Expenditure during the past three
Major and Appropriation appropriation
Amount Necessary
Minor Heads as years applied for
of Account modified up for
to the remaining 20 20 20 20
and Primary by competent
month month
unit of authority
Appropriation

Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

No…………………………………., dated…………………………… 20.

Explanation of insufficiency of grant, recommendations and proposals for re-appropriation by -
(1) Disbursing Officer :
(2) Controlling Officer :
(3) Head of Department :
(4) Secretary to Government in Administrative Department. No…………………………………. , dated
……………………………… 20.

Order of sanction with details

Additional appropriation of Rs………………………………………………… of source of appropriation Sanctioned.
The amount will be met by re-appropriation form ……………………………………………………….............……

Signature ……………………………………………….
Designation …………………………………………….

135
GFR2
FORM GFR 2
[ See Paragraph 4 of Appendix - 2 ]

REVENUE RECEIPTS

Ministry / Department / Union Territory :

Major Head :
(In thousands of Rupees)
First Month Last Month
ACCOUNTS Total
Third Eight Seven Five Four
Last year

Second
Last year

Last year

Current Budget
Year Revised

Ensuing Budget
Year

Accounts 7 months Accounts Current year Ensuing

Minor Heads Year
Last year Current year Third Second Last Budget Revised Budget
Last Year Last Year Year Estimate Estimate Estimate

Explanation for increase / decrease (Minor Headwise)

Signature …………………......................................
Designation ………………...............................……
Date ………………………...............................……

136
FORM GFR 2-A
[ See Paragraph 4 of Appendix - 2 ]

ESTIMATES OF FOREIGN GRANTS CONCERNING

THE MINISTRY / DEPARTMENT …….........................................
(In thousands of Rupees)
Date of aid Receipt Amounts to be provided in
Name of the agreement Particulars of Total Major Current Current Ensuring Manner of
grant or assistance to assistance Head Year BE Year RE Year BE utilization
country/ body be received expected of aid*

1 2 3 4 5 6 7 8 9

Signature …………………………….
Designation ………………………….
Date .………………………………….

* A brief note may be added indicating the project on which aid is to be utilized. In the case of material and
equipment, the relevant grant and expenditure Heads of Account under which (i) utilization of material by Central
Government Departments / Projects, (ii) transfer of material to States, Union Territories and other Bodies will be
adjusted and also whether the utilization on transfer will be on Central Sector Scheme or Centrally Sponsored
Schemes should also be indicated. In cases where the aid material is proposed to be sold the Receipt Major Head
under which the proceeds will be credited should be indicated.

NOTE : Cash grants and assistance in the form of material and equipment should be indicated separately in
Columns 3 to 8.

137
FORM GFR 2 - B
[ See Paragraph 4 of Appendix - 2 ]

ESTIMATES OF INTEREST RECEIPTS AND LOAN REPAYMENTS

Ministry / Department ………….................…………………….

(In thousands of Rupees)
Interest Receipts Loan Repayments

BE RE BE BE RE BE
Current Current Ensuing Current Current Current
Year Year Year Year Year Year

1. State Governments*.
2. Union Territory Governments*.
3. Interest on Capital Outlay in
departmental commercial
undertakings.
4. Foreign Governments*.
5. Industrial/Commercial/Financial
undertakings
(undertaking-wise details to be given)
:
(a) Public Sector Undertakings.
(b) Private Sector Undertakings.
6. Statutory Bodies (Port Trusts,
Municipalities, KVIC, Tea/Coffee
Boards, etc.)
7. Railways / P&T Reserve Funds.
8. Other parties (Co-operatives,
Educational Institutions, displaced
persons and other individual loanees
except Governments servants)*
9. Government servants.

Total

* Estimates for each State / Union Territory / Foreign Government /Statutory Body or Institution should be separately
appended to the Annexure.
No........................................................................................
Ministry / Department ………......………………..........…..…
Date the ………....……………………………….........……....

Forwarded in duplicate to the Ministry of Finance, Budget Division.

Signature ….……………...…………............…...........….…..
Designation………………………………....……...........….…

138
FORM GFR 3
[ See Rule 58 and Rule 64(1)) ]
Office of …………………………
Grant No ………………………

LIABILITY REGISTER FOR THE YEAR ……………

SI. Designation Month Serial Nature No. & date Agency Estimated Permissible Total
No. of Disbursing of number in of of indent or on which Cost excess over Liability
Officer Report Liability Liability connected indent is the (Cols. 8+9)
Statement letter placed estimated
cost, in any
1 2 3 4 5 6 7 8 9 10

139
Probable month and year Record of Payment Balance commitments
in which the expenditure [Col. 10 minus Col. 14(b)]
will be accounted for in Initials
the departmental of the (a) (b) (a) (b)* Initials of
expenditure statement Branch Month Amount Amount Year(s) in the Remarks
Officer and which it is Branch
Month Amount of year likely to be Officer
and expenditure discharged
year to be incurred
11 12 13 14 15 16 17 18 19

NOTE :- Cols. 2, 3 and 4 will be operated upon only in the Register of Liabilities maintained by the Controlling
Officers in respect of the case reported by their Disbursing Officers.

* If the balance of commitment is to be discharged during more than one financial year, the year-wise break-
up of the amount should be indicated.

140
FORM GFR 3-A
[See Rule58]
Office of …………………………
Grant No ………………………

LIABILITY STATEMENT FOR THE MONTH OF …………………………..

Part - I - Statement of Liabilities incurred during the month of report

SI. Nature of No. and Agency on Estimated Permissible Total Probable month in
No. liability date which cost excess over liability which the expenditure Remarks
of indent indent is the (Col. 5 + will be accounted for
or placed or estimated Col. 6) in the departmental
connected demand is cost, if any expenditure statement
letter made Month Expenditur
e likely to
be incurred
1 2 3 4 5 6 7 8 9 10

141
Part - II - Payments made against Liabilities and Liabilities
cancelled or finally paid off

Record of payment Balance commitment Remarks

Month in Serial
(a) (b) (a) (b)*
which No.
Liability was Month Amount Amount Year(s) in which
reported and year the balance of
Commitments
is likely to be
discharged.
1 2 3 4 5 6 7

NOTE 1-In Col. 2, the number to be entered will be the serial number of the liability in the Liability Statement in
which it was first reported.
NOTE 2 - In the Remarks column, the following information should also be given :-
(i) If payment against a liability is likely to be made, not in the month originally indicated, but in some
other month, the latter should be indicated. If change in the month of payment is the only
information to be given in respect of a liability, the Columns to be used will be 1, 2 and 5.
(ii) Similarly, if the whole or part of a liability has been cancelled or otherwise extinguished, the fact
may be mentioned and brief reasons given.

* If the balance of commitments is to be discharged during more than one financial year, the year -wise break- up
of the amount should be indicated.

142
Part - III - Progressive amount of outstanding

Month in Serial Balance commitments

which No. (a) (b)*
liability was Amount Year(s) in which the balance of
reported commitments is likely to be discharged
1 2 3 4

Total

NOTE. 1 - This is a list of liabilities which are pending, that is, those which have not been paid off or otherwise
extinguished or cancelled.
NOTE. 2 - In Column 2, the number to be entered will be the serial number of the liability in the Liability
Statement in which it was first reported.

* If the balance of commitments is to be discharged during more than one financial year, the year -wise break- up
of the amount should be indicated.

142
FORM GFR 4
[ See Paragraph 9 of Appendix - 3 ]

STATEMENT OF PROPOSALS FOR PRE-BUDGET DISCUSSION

Demand No.
STATEMENT OF BUDGET ESTIMATES (in crores of Rupees)
Sl. Description as Actuals Actuals B.E. Actuals upto R.E. B.E
No. shown in the For the last two current September of current current year
Exp.Bud.Vol.2 Preceding years year current year year
(SBE)

1 2 3 4 5 6 7 8

APPENDIX I Expenditure SBE

(See Paragraph3.5)

Ministry/ Department Demand No.

(Rs.in crore)

Actuals BE RE BE

For the last two (current year) (current year) (next year)
Preceding years

Revenue Capital Revenue Capital Revenue Capital Revenue Capital

A CENTRE'S EXPENDITURE
I. Establishment Expenditure
II. Central Sector Schemes
III. Other Central Expenditure

B. TRANSFERS TO STATES
IV. Centrally Sponsored Schemes
V. Finance Commission Transfers
VI. Other Transfers to States

143
FORM GFR 4
[ See Paragraph 3.5 ]
OBJECT HEAD WISE SUMMARY EXPENDITURE

PART C-OBJECT HEADWISE SUMMARY

Demand No.
(Rs.in crore)
Object Object Actual BE Actual RE BE
Head Head 2015-16 Expenditure
Code Name till
September
Revenue Capital Revenue Capital Revenue Capital

144
FORM GFR 5
[ See Rule 57 (4) (ii) and Rule 57 (5) (iii)]

REGISTER SHOWING EXPENSES BY HEADS OF ACCOUNT

Office of ................................................. Head of Account....................................

Major Head.................................................
Minor Head................................................
Sub-Head ...................................................
Month
Year (Unit of Appropriation)

Allotment Sub-Head of Grants Deduction, if Net amount

any of
SI. No. Voucher No./Token No. & Date/Serial the bill
No. in Bill Register*
1.
2.
3.
4.

Add adjustment communicated by PAO

Total for the month

Total from 1st April Balance of the

appropriation

NOTE 1. If an allotment is changed, necessary correction in the register should be made in red ink.
NOTE 2. Allotment of expenditure under ‘Charged’ portion should be indicated distinctly.
NOTE 3.- This account should be dispatched on the 3rdof the following month.

* Serial No. in Bill Register to be entered only in respect of bills passed by Cheque Drawing DDOs
under their cheque-drawing powers.

Signature.....................................................
Designation.................................................
Date............................................................

145
FORM GFR 6
[ See Rule 57 (4) (iv) ]

BROADSHEET FOR WATCHING RECEIPT OF

ACCOUNT FROM DISBURSING OFFICERS

Office of ...................................................................
Major Head.............................................................
Minor Head .............................................................
Sub-Head ................................................................

Serial Names of Disbursing District Date of receipt of account

No. Officers
March April May

NOTE 1.Districts are to be arranged according to alphabetical order.

NOTE 2.Dates of receipts should be noted in monthly columns. Reminder should be sent if not received by the
7thof the month.

146
FORM GFR 7
[ See Rule 57 (4) (vi) ]

COMPILATION SHEET

Major Head....................................................
Minor Head....................................................
Sub-Head.......................................................

Month Serial No. of the Disbursing Officers Total for Remarks

each officer

Total expenditure ..............................

Add Adjustment communicated by
Accounts Officer and not reckoned by
DDOs ..............................................
......................................................
Grand Total.......................................

Add Total up to previous month...........

…………………................................
Progressive Total up-to-date ...............
........................................................

147
FORM GFR 8
[ See Rule 57 (4) (viii), (5) (iv) & (6)]

CONSOLIDATED ACCOUNTS

Name of Office........................................................ Grant No.................................................................

Appropriation..........................................................
Financial Year...........................................................

Units of Grants Grants Proportionate Grant Actual

appropriation sanctioned distributed from April to date Expenditure April
(Part -III of Demands
for Grants)
1 2 3 4 5
(i) Salaries Charged Voted Charged Voted Charged Voted Charged Voted
(ii) Total of all units
of appropriation

Units of Actual Expenditure

appropriation May Progressive June Progressive
(Part -III of Demands expenditure expenditure
for Grants) upto end of May
6 7 8 9
(i) Salaries Charged Voted Charged Voted Charged Voted Charged Voted
(ii) Total of all units
of appropriation

NOTE 1. Subsequent charges, if any, under Column 2 are to be made in red ink.
NOTE 2. Figures under Column 4 may be entered in pencil for facility of updating from month to month.
NOTE 3.Wherever variations between actual expenditure and proportion grant are large, suitable explanations
should be given in a “Remarks” column.

148
FORM GFR 9
[ See Rule 57 (8) ]

BROADSHEET FOR WATCHING RECEIPT OF THE RETURNS FROM THE HEADS OF

DEPARTMENTS UNDER A DEPARTMENT OF THE CENTRAL GOVERNMENT

SI. Grant Date of receipt of returns

No. No.
April May June July August Sep. Oct. Nov. Dec. Jan. Feb. March

NOTE 1.Dates of receipt should be noted in monthly columns. Reminders should be sent if returns are not received
by the prescribed date.

NOTE 2.Returns relating to the Secretariat proper should also be maintained in the above form.

149
FORM GFR 10
[ See Rule 217 (iii) ]

REPORT OF SURPLUS, OBSOLETE AND

UNSERVICEABLE STORES FOR DISPOSAL

Item No. Particulars of Quantity/ Book Value/ Condition and Mode of disposal Remarks
stores Weight Original year of purchase (sale, public
purchase price auction or
otherwise)

1 2 3 4 5 6 7

Signature...........................................................
Designation.......................................................
Date..................................................................

150
FORM GFR 11
[ See Rule 222]

SALE ACCOUNT

Item Particulars Quantity/ Name Highest Highest Earnest Date on Whether the Auctioneer’s
No. of Weight And bid bid money Which the Articles were Commission
Stores Full accepted rejected realized complete actually and
address on Amount is Handed over acknowled-
Of The spot realized On the spot. gement
purchaser and If not,the For
credited Actual date Its
into Of handing Payment
treasury Over of the
Articles with
quantities
1 2 3 4 5 6 7 8 9 10

Signature...........................................................
Designation.......................................................
Date..................................................................

151
GFR 12 – A
[(See Rule 238 (1)]

FORM OF UTILIZATION CERTIFICATE

FOR AUTONOMOUS BODIES OR THE GRANTEE ORGANIZATION

UTILIZATION CERTIFICATE FOR THE YEAR………….. in respect

of recurring/non-recurring
GRANTS-IN-AID/SALARIES/CREATION OF CAPITAL ASSETS

1.Name of the Scheme......................................................................................

2. Whether recurring or non-recurring grants.......................................................
3. Grants position at the beginning of the Financial year
(i) Cash in Hand/Bank
(ii) Unadjusted advances
(iii) Total
4. Details of grants received, expenditure incurred and closing balances: (Actuals)
Unspent Interest Interest Grant received during the Total Expenditure Closing
Balances of Earned deposited year Available incurred Balances
Grants received thereon back to the funds (5-6)
years [figure as Govern- (1+2-
at Sl. No. ment 3+4)
3 (iii)]

1 2 3 4 5 6 7
Sanction Date Amount
No. (ii) (iii)
(i)

Component wise utilization of grants:

Grant-in-aid– Grant-in-aid– Salary Grant-in-aid–creation of capital Total

General assets

Details of grants position at the end of the year

(i) Cash in Hand/Bank
(ii) Unadjusted Advances
(iii) Total

152
Certified that I have satisfied myself that the conditions on which grants were sanctioned have been duly fulfilled/are
being fulfilled and that I have exercised following checks to see that the money has been actually utilized for the
purpose for which it was sanctioned:
(i) The main accounts and other subsidiary accounts and registers (including assets registers) are maintained
asprescribed in the relevant Act/Rules/Standing instructions (mention the Act/Rules) and have been duly
audited by designated auditors. The figures depicted above tally with the audited figures mentioned in financial
statements/accounts.
(ii) There exist internal controls for safeguarding public funds/assets, watching outcomes and achievements of
physical targets against the financial inputs, ensuring quality in asset creation etc. & the periodic evaluation of
internal controls is exercised to ensure their effectiveness.
(iii) To the best of our knowledge and belief, no transactions have been entered that are in violation of relevant
Act/Rules/standing instructions and scheme guidelines.
(iv) The responsibilities among the key functionaries for execution of the scheme have been assigned in clear
terms and are not general in nature.
(v) The benefits were extended to the intended beneficiaries and only such areas/districts were covered where the
scheme was intended to operate.
(vi) The expenditure on various components of the scheme was in the proportions authorized as per the scheme
guidelines and terms and conditions of the grants-in-aid.
(vii) It has been ensured that the physical and financial performance under…………….(name of the scheme has
been according to the requirements, as prescribed in the guidelines issued by Govt. of India and the
performance/targets achieved statement for the year to which the utilization of the fund resulted in outcomes
given at Annexure – I duly enclosed.
(viii) The utilization of the fund resulted in outcomes given at Annexure – II duly enclosed (to be formulated by the
Ministry/Department concerned as per their requirements/specifications.)
(ix) Details of various schemes executed by the agency through grants-in-aid received from the same Ministry or
from other Ministries is enclosed at Annexure –II (to be formulated by the Ministry/Department concerned as
per their requirements/specifications).

Date:
Place:

Signature Signature

Name.......................................................... Name.......................................................

Chief Finance Officer Head of the Organisation

(Head of the Finance)

(Strike out inapplicable terms)

153
GFR 12 – B
[ See Rule 256 (2) ]

FORM OF UTILIZATION CERTIFICATE

(1) Certified that out of the Loan of Rs. …….........…....……. SANCTIONED under…………………………………...
dated…………………….…..,in favour of ………….....………….during the year……………………......an amount of
Rs…………………………...has been utilized for the purpose for which it was sanctioned, and that the balance of
Rs. ………...................remaining unutilized at the end of the year…………………….has been surrendered to the
Government (vide No. ……….………., dated…………………..) / will be adjusted towards the loan payable during
the next financial year.

(2) Certified that I have satisfied myself that the conditions on which the loan was sanctioned have been duly
fulfilled/are being fulfilled and that I have exercised the following checks to see that the money was actually spent
for the purpose for which the loan was made.

Kinds of checks exercised

1.

2.

3.

4.

Signature…….….…………………….
Designation ………………………….
Date …………………………………..

154
GFR 12 – C
[(See Rule 239)]

FORM OF UTILIZATION CERTIFICATE (FOR STATE GOVERNMENTS)

(Where expenditure incurred by Govt. bodies only)

Sl. Amount
No. Letter Certified that out of Rs……………………………………………...........Of
No. and date grantssanctionedduringtheyear.................................infavourof
..........................................................undertheMinistry/Department
Letter No. given in the margin and Rs…………………………..on
Account of unspent balance of the previous year, a sum of
Rs…………………………….has been utilized for the propose of
............................................for which it was sanctioned and that
The balance of Rs…………………………..remaining unutilized
At the end of the year has been surrendered to
Government(vide No.
Total ...........................dated.......................)/will be adjusted
towards the grants pay able during the next
year........................................

2. Certified that I have satisfied myself that the conditions on which the grants-in-aid was sanctioned have
been duly fulfilled/ are being fulfilled and that I have exercised the following checks to see that the money
was actually utilized for the propose for which it was sanctioned.

Kinds of checks exercised

1.
2.
3.
4.
5.

Signature………………………………………
Designation…..………………………………..
Date……………………………………………

PS: The UC shall disclose separately the actual expenditure incurred and loans and advances given to suppliers
of stores and assets, to construction agencies and like in accordance with scheme guidelines and in
furtherance to the scheme objectives, which do not constitute expenditure at the stage. These shall be treated
as utilized grants but allowed to be carried forward.

155
FORM GFR 13
[ See Rule 262]

STATEMENT OF AGGREGATE BALANCE OF LOAN(S) OUTSTANDING AS

ON 31ST MARCH, 20… AND DETAILS OF DEFAULTS

PAO / Pr. AO Ministry of ………………………………………Major Head………………………

Sub-Major Details of defaults Amount of default

Head Earliest
SI. Minor Head Name of the Aggregate Original letter Amount of Principal Interest date to
No. of Account borrower outstanding No(s). and loan(s) which the
balance of Date(s) sanctioned default
loan(s) sanctioning the Rs. Rs. Rs. pertains
loan(s)
1 2 3 4 5 6 7 8 9

NOTE. - Statements may be prepared on separate sheets for each Major Head, with Minor Head-wise break-up.
Parties having aggregate outstanding balances of less than Rs. 5 lakhs each and which are not defaulters may be
grouped together with a common descriptive head such as “Regional Engineering Colleges”, etc., if possible or
“parties with small outstanding balance” under Column 3.

156
FORM GFR 14
[ See Rule306 (3) ]

FORM OF SECURITY BOND (FIDELITY BOND DEPOSITED AS SECURITY)

KNOW ALL MEN BY these presents that I, A.B……………………… of……………………........and held and firmly
bound unto the President of India, his successors and assigns (hereinafter referred to as “Government”) in the sum
of Rs………………(Rupees………….) to be paid to the Government for which payment, well and truly to be
made, I bind myself, my heirs, executors, administrators, and legal representatives by these presents. Singed and
dated this ……………………… day of……………….20
2. WHEREAS the above bounden A.B.........................................was on the day of...........................................
20…………………… appointed to and now holds the office of ……………in the office of…………………… AND
WHEREAS the said A.B………… by virtue of holding such office is bound to collect………………………… (here
describe the nature of Cashier’s/ Storekeeper’s/Sub-storekeeper’s/Sub-ordinate’s duties) …………………………
and to keep and render true and faithful accounts of his dealings with all property and money which may come into
his hands or possession under his control such accounts to be kept in the form and manner that may, from time to
time, be prescribed by duly constituted authority, and also to prepare and submit such returns, accounts and other
documents as may from time to time be required of him.
3.AND WHEREAS the said A.B…………………...has, in pursuance of Rule 270 of the General Financial Rules,
1963, delivered to and deposited with ……………… a Fidelity Bond issued by……………………Company for the
sum of Rs………………… (Rupees………………….) as Security for the due and faithful performance by the said
A.B……………………of the duties of his said office and of any other office requiring security to which he may be
appointed at any time and of other duties which may be required of him while holding any office as aforesaid and
for the purpose of securing and indemnifying the Government against all loss, injury, damage, costs, or expenses
which the Government may, in any way, suffer, sustain or pay by reason of misconduct, neglect, oversight or any
other act of omission of the said A.B……………………………or of any person or persons acting
under him or for whom he may be responsible.
4. AND WHEREAS the said A.B……………………………………..has entered into the above Bond in the sum of
……………………… conditioned for the due performance by him the said A.B……………………...of the duties of
the said office and of other duties appertaining thereto or which may lawfully be required of him and to indemnify
the Government against loss from or by reason of the acts or defaults of the said A.B………………………………
and of all and every person and persons aforesaid.
5.NOW THE CONDITION of the above written Bond is such that of the said A.B……………………has whilst he
has held the said office of………………………...as aforesaid always duly performed and fulfilled the duties of his
said office and if he shall, whilst he shall hold the said office or any other office requiring security to which he may
be appointed, or in which he may act, always duly perform and fulfil all and every duties thereof respectively and
other duties which may from time to time be required of him while holding any such office as aforesaid, and shall
duly pay into the Government Treasury at ………………………… all such money and securities for money as are
payable or deliverable to Government and shall come into his possession or control by reason of the said office
and shall duly account for and deliver up all moneys, papers and other property which shall come into his
possession or control by reason of the said office and if the said A.B………….his heirs, executors, administrators
or legal representatives shall pay or cause to be paid unto the Government the amount of any loss and /or
defalcation in the accounts of the said …………………………………………………….
within 24 hours after the amount of such loss and /or defalcation shall have been demanded from the said
A.B…………… by the………………………………such demand to be in writing and left at the office or last known
place of residence of the said A.B…………………………and shall also at all times indemnify and save, and keep
harmless the Government from all and every loss, injury, damage, actions, suits, proceedings, costs, charges and
expenses which has been or shall or may at any time or times hereafter during the service or employment of the
said A.B……………………… in such office as aforesaid, or any such offices aforesaid, be sustained, incurred,
suffered brought, sued or commenced or paid by the Government by reason of any act, embezzlement, defalcation,
mismanagement, neglect, failure, misconduct, default, disobedience, omission, or insolvency of the said
A.B…………………………….or of any person or persons acting under him or for whom he
may be responsible, then the above written Bond shall be void and of no effect, otherwise the same shall be and
remain in full force.
6.PROVIDED ALWAYS and it is hereby declared and agreed by and between the parties hereto that the said
Fidelity Bond No…………….delivered and deposited as aforesaid shall be and remain at the disposal of the said
officer for the time being or the Government as and for part and additional security over and above the above written

158
Bond to the Government, for the indemnity and other purposes aforesaid with full power to the Government or an
officer duly authorized in that behalf to obtain and receive payment of the sum or sums of money recoverable or to
be received, upon or by virtue of the said Fidelity Bond or a sufficient portion thereof and all benefits and advantages
thereof and to apply the same in and towards the indemnity as aforesaid of the Government.
7.AND it is hereby further agreed and declared by and between the parties hereto that the said
A.B……………………….shall keep the said Fidelity Bond issued by the said company in full force by payment of
The premia and as when they fall due and by otherwise conforming to the rules of the said company relating thereto.
8.PROVIDED ALWAYS that cancellation or lapse at any time of the said Fidelity Bond shall not be deemed to affect
or prejudice the right of the Government to take proceedings upon or under this said Bond against the
said……………………… in case any breach of the condition of this Bond shall be discovered after the cancellation
or lapse of the said Fidelity Bond but the responsibility of the A.B…………………….shall at all times
continue and but the Government shall be fully indemnified against all such loss or damage as aforesaid at any
time.
9. PROVIDED FURTHER that nothing herein contained nor in the Fidelity Bond so deposited shall be deemed to
limit the liability of the said A.B…………………..in respect of matters aforesaid to the forfeiture of the said sum of
Rupees………………… or part or parts thereof and that if the said sum be found insufficient to indemnify the
Government in full for any loss or damage sustained by them in respect of matters aforesaid or any of them the
said A.B……………………………………………shall pay to Government on demand such further sum as shall be
deemed by…………………… to be necessary in addition to the said Fidelity Bond of Rs……………………………
to cover such loss or damage as aforesaid and that the Government shall be entitled to recover such further sum
payable as aforesaid in any manner open to them.
10. The stamp duty, if any, on this Bond shall be borne by the Government.

Signature

1. Signed and delivered by the above named A.B…………….. in the presence of …………………..
2. Signed for and on behalf of the President of India by ……………… the……………….being the person directed
or authorized by him in that behalf in the presence of ……………………

159
FORM GFR 15
[ See Rule 253 (2) (ii) ]

FORM OF WRITTEN UNDERTAKING TO BE EXECUTED BY AN UNDERTAKING /

CORPORATION WHOLLY OWNED BY THE CENTRAL GOVERNMENT
AT THE TIME OF SANCTIONING OF A LOAN
Memorandum of written undertaking given on the ……………… day of…………………………...two thousand and
……………………… by a company incorporated under the Indian Companies Act, 1913 /the Companies Act, 1956,/
the Companies Act, 2013,having its registered office………………………….a body corporate incorporated
under the same name and style and by under ……………… (Act No…………… of……………) having its office at
……………………a society registered under the Societies Registration Act (21 of 1860) having its office
at………………(hereinafter called ‘the Company / Corporation’ which expression shall include its successors and
assigns) to the President of India (hereinafter called ‘the President’ which expression shall include his successors
and assigns).
WHEREAS the said Company / Corporation, etc., applied to the President for a loan of Rs…………………………
(Rupees………………………) only. AND WHEREAS the President has agreed to lend an amount of Rs…………
(Rupees………………………… only) to the said Company / Corporation, etc., on the terms and conditions
prescribed in the Government of India, Ministry of ……………………… (Department of…………………….. ……..)
Letter / Office Memorandum No……………………, dated…………………. (annexed).
Now IT IS HEREBY AGREED by the said Company / Corporation, etc., that, in consideration of the sum of
Rs……………… (Rupees………………… only) lent by the President to the Company / Corporation etc., the
Company / Corporation, etc., hereby agree in accordance with the said terms and conditions –
(i)To repay the loan in…………………………..annual equal instalments the first instalment repayable from the
…………………… anniversary of the date of drawal;
(ii)To pay interest at the rate or ………….……% per annum on the principal payable on each anniversary; and
(iii)In case of default in the payment of the instalment of the loan in accordance with (i) above and / or interest in
accordance with (ii) above, pay interest at penal rate of……………………………...% per annum on such overdue
payments.
IT IS HEREBY FURTHER AGREED AND DECLARED that the said Company / Corporation, etc., shall not, without
the written consent of the President, encumber or alienate, create, any mortgage lien or charge by way of
hypothecation, pledge otherwise, or create other encumbrances of any kind whatsoever any part of its land or
buildings or other structure, and / or plant, machinery or any other fixed assets owned by them.
AND IT IS HEREBY AGREED that the said principal amount lent by the President as aforesaid shall be used by
the Company / Corporation, etc., only for the purpose or purposes for which the aforesaid amount was sanctioned
and for no other purpose whatsoever.
IN WITNESS WHEREOF these presents have been executed by the said Company / Corporation the day and year
first above written.
THE PRESIDENT of India has agreed to bear the stamp duty, if any, chargeable on this document. Signed for and
on behalf of…………….Company / Corporation, etc., by

Shri…………………………………….(Name and Designation) in the presence of

1………………………………………..Seal of the Company / Corporation

2. ……….………………………………

160
FORM GFR 16
[ see Rule 286 (1) ]

CERTIFICATE OF TRANSFER OF CHARGE

Certified that I /we have in the forenoon / afternoon of this day respectively made over and received charge of the
Office………………………… in pursuance of Order No…………………......dated ………..……………....……...

Received Officer ………………………… Relieving Officer …………………………

Signature ………………………………… Signature …………………………………
(Name in Block Letters) (Name in Block Letters)
Designation……………………………… Designation…………………………………
Station …………………………………… Station ………………………………………
Date ……………………………………… Date …………………………………………

(For use in Audit Office / PAO only)

Noted in A/R at page …………………………
SO/AAO/AO/PAO
Noted in A/R at page……………………………
SO/AAO/AO/PAO
Forwarded …………………………………………………………………………………

NOTE :- Separate certificate (as per Form appended) also to be used where transfer / assumption of charge
involves responsibilities for Cash, Stores etc.

161
FORM GFR 16 (APPENDIX)
[ See Rule 286(1) ]

CERTIFICATE OF TRANSFER OF CHARGE IN RESPECT OF TRANSFER /

ASSUMPTION OF RESPONSIBILITIES FOR CASH, STORES, ETC.

Certified that I/we have in the forenoon / afternoon of this day……………[date to be indicated] respectively made
over and assumed charge and responsibility of the following :-
Cash Rs…………………………………
Permanent advance Rs…………………
Others……………………………………

Relieved Officer…………………………..
Reliving Officer……………………………

161
FORM GFR 16A
“Ministry / Department of ………………………….

JOINING REPORT

I hereby report myself for duty this day…………………………….forenoon / afternoon after availing of leave from
…………........…… to …………….....……… sanctioned vide Ministry / Department of………………………..Order
No……………, dated ………….……………

Signature ……………………………
(Name in Block Letters)

Designation………………………….

162
FORM GFR 17
[ See Rule 306 (3) ]

GENERAL INSURANCE CORPORATION OF INDIA AND ITS SUBSIDIARIES

FIDELITY GUARANTEE POLICY

POLICY No.

IN CONSIDERATION OF the first premium shown in the First Schedule and subject to the terms and conditions
contained herein or endorsed herein which are to be deemed conditions precedent to any liability on the part of the
Life Insurance Corporation of India (hereinafter called “Corporation”) so far as they relate to anything to be done or
complied with by the Employer, the Corporation agrees and binds itself to make good and reimburse to the Employer
all such direct pecuniary loss not exceeding the amount of guarantee, as the Employer shall sustain by any act or
acts of dishonesty, default or negligence committed by the employed / any of the employed (a) during the currency
of this insurance and (b) during the uninterrupted continuance of employment of such employed and (c) in
connection with his occupation and duties AND DISCOVERED during the currency of this insurance or within a
reasonable time thereafter or within twelve months after determination of such employment whichever event shall
first happen.
The proposal for this insurance made by or on behalf of the Employer together with any correspondence relative
thereto shall be incorporated herein and be the basis of this contract and of every renewal.

THE FIRST SCHEDULE

Name
The Employer Business THE PRESIDENT OF INDIA
The Employed : Address through
The amount of Guarantee Rs.
Occupation and duties:
The first premium Rs.
The renewal date The ………day of ……… in each year.

The currency of this insurance: The period or periods from the date written against the respective names of the
Employed to the then next renewal date and any year thereafter in respect to which the Corporation shall agree to
accept and Employer or Employed shall pay the annual premium specified in the Second Schedule hereto.

THE SECOND SCHEDULE

Period of Name Occupation Amount of Annual Actual

Risk and duties Guarantee Premium Premium
Rs. Rs. P. Rs. P.

In witness whereof this Bond has been signed at …………......…… this day of ……………………20.........
For1 …………………………........…
Prepared by …………………………
Examined by…………………………
N.B.-For your own protection it is incumbent upon you to read your policy and its conditions to ascertain that it is
made out in accordance with your intentions.
1 The name of the Company to be inserted in ink at the time of execution of this form.

163
CONDITIONS
In this policy the expression shall bear the respective meanings attached to them in the First Schedule hereto
1. The Corporation shall not be liable to make any payment hereunder if the nature of the business of the Employer
of the duties or conditions of service shall be changed or the remuneration or any of the Employed reduced
without the sanction of the Corporation or if the precautions and checks for securing accuracy of accounts shall
not be duly observed.
2. Notice in writing shall be given to the Corporation’s office as soon as possible after any act or acts of dishonesty,
default or negligence on the part of any of the employed or of reasonable cause of suspicion thereof or any
improper conduct shall have come to the knowledge of the Employer or of any representatives of the employer
to whom is entrusted the duty of superintendence over any of the Employed and no amount shall be payable
under this policy in respect of that Employed by reason of any act committed after such knowledge shall have
come to the Employer or his said representatives. Within three months after such notice the Employer shall
deliver to the Corporation full details of his claim and shall furnish proof of the correctness of such claim. All
books of accounts of the Employer or any Accountant’s report thereon shall be open to the inspection of the
Corporation and the Employer shall give all information and assistance to enable the Corporation to sue for and
obtain reimbursement by any one of the Employed or by his estate of any moneys which the Corporation shall
have paid or become liable to pay under this Policy. Provided always that the Corporation shall not be entitled
to the disclosure of any record or information in respect of which the Employer is entitled to claim privilege in a
Court of Law under Sections 123 and 124 of the Indian Evidence Act.
3. Any moneys of any one of the Employed in respect of whom a claim is made in the hands of the Employer and
any money which but for any act of fraud or dishonesty committed by such one of Employed would have been
due to that Employed from the Employer shall be deducted from the amount otherwise payable under the Policy.
Provided that the Employee is entitled under the law to make such deduction. Provided further that in cases in
which the loss to the Employer is in excess of the maximum amount payable under the policy, the moneys
aforesaid will be applied in the first place to make good the amount of such excess and the balance, if any, shall
be deducted as herein provided. The Employer and the Corporation shall share any other recovery (excluding
insurance and reinsurance and any counter security taken by Corporation) made by either on account of any
loss in the proportions that the amount of the loss borne by each bears to the total amount of the loss.
4. Notwithstanding anything herein contained to the contrary it is also agreed that the Corporation guarantees to
the Employer that the Employed shall honestly and faithfully account to the Employer for all moneys or valuables
or property which they shall receive or be entrusted with on account of the Employer either in their personal or
individual capacity or as member of group working conjointly with other members and that the Corporation will
make good and reimburse to the Employer such loss not exceeding the amount of guarantee as the Employer
may sustain by any act or acts of default or dishonesty or negligence of the Employed in the capacity and
employment aforesaid and that when individual liability cannot be brought home to the Employed the amount to
be made good shall be that which falls to the share of the Employed calculating from the total number of men
forming such group, i.e., the total loss divided by the total number of men employed on the particular work.
5. The Corporation also agrees that during the period in which the guarantee shall be in force the particulars
contained in the Second Schedule shall be with the consent of Employer and on previous notice to and on
payment to the Corporation of any additional proportionate premium that may become payable in consequence
of any change in the employed by reason of promotion or otherwise be varied as circumstances may require
and such additional persona as may be taken into the employment of the employer referred to in the Schedule
hereof during such period shall with such consent aforesaid and on previous notice to and on payment to the
Corporation of a further proportionate premium at the rate for the time being applicable be added to and included
in the said Schedule and the expression Employed used throughout this policy shall as from the respective date
on which the names shall be included in the said schedule be deemed to include all persons whether previously
named in the said Schedule or subsequently added thereto as aforesaid.
6. If any question or difference shall arise between the parties hereto or their respective representatives touching
these presents or the construction hereof or as to the rights, duties or obligations of any persons hereunder or
as to any other matter in anywise arising out of or connected with the subject-matter of these presents, the same
shall be referred to a single Arbitrator to be named by the Government of India. The Arbitrator so named shall
be an officer of Government and shall have all the powers conferred on Arbitrators under the Indian Arbitration
Act. The costs of the reference and award shall be in the discretion of the Arbitrator. The making of an award in
such reference shall be a condition precedent to any liability of the Corporation or any right of action against the
Corporation in respect of such difference. If the Corporation shall disclaim liability for any claim hereunder and
such claim shall not within twelve calendar months from the date of such disclaimer have been referred to
arbitration under the provision herein contained then the claim shall for all purpose be deemed to have been
abandoned and shall not thereafter be recoverable hereunder.
7. The expression "Government of India" for the purpose of Clause 6 above shall mean the Secretary to the
Government of India in the Administrative Ministry/ Head of Department under which the employed is working.

164
FORM GFR 18
[ See Rule 211. (ii) (c) ]

ACCESSION REGISTER

Date Acces Author Title Vol. Place Year Pages Sourc Class Book Cost Bill With Re-
sion and of e No. No. No. drawn marks
Num- Publi- Publi- and date
ber sher cation date
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) (13) (14) (15)

166
FORM GFR 19
[ See Rule250. (1) (viii) ]

NOTICE TO BORROWER ABOUT THE DUE DATE

FOR REPAYMENT OF LOAN AND INTEREST THEREON

No………………………
Office of the Controller of Accounts, Ministry / Department of ………….......…… New Delhi, dated the…….......….

To ……………………………
…………………………...…..

Subject :-Repayment of loan and payment of interest thereon.

Dear Sir,
According to the terms of the loan of Rs………………………….sanctioned to you, vide the Ministry / Department
………………………… Letter No……………………, dated………………………… the annual repayment instalment
and / or interest thereon, detailed below, will become due on…………………………
(i) Repayment ……………………… Rs…………………(in words and figures)
(ii) Interest …………………………… Rs………………..(in words and figures)
2.Please arrange the payment by the due date. It should be noted that the amount of interest has been calculated
on the assumption that payment will be arranged promptly; otherwise it will be revised upwards in accordance
with the terms of the loan.
3.The amounts due should be tendered, on or before the due date at the………………………...(New Delhi Head
Office / Main Office of the Public Sector Bank (PSB) accredited to the Ministry / Department in cash or by cheque
or draft drawn on any Scheduled Bank / New Delhi, in favour of the aforesaid PSB Branch. The payment should
be accompanied by a memorandum or challan, in duplicate, giving the following details :-
(i) Name of the Ministry / Department………………………………
(ii) Name of the Borrower …………………………………………
(iii) No. and date of loan sanction letter with the loan amount sanctioned ………………………….
(iv) Amount due for payment, separately for interest and payment…………………………
(v) Due date of payment……………………………
(vi) The head of the account indicated below, to which the amounts will be adjusted in Government accounts,
should be included in the challan:

(i) Instalment of Principal. Head of Account

(ii) Interest.

4.Separate cheque / draft and challans should be submitted for payment of principal and interest.
5.For outstation loanees, payment of dues together with memorandum / challans is to be arranged through
theirBank to the aforesaid PSB Branch in New Delhi by the due date.

Yours faithfully

Accounts Officer

167
FORM GFR 20
[See Rule 305 (1) ]

REGISTER OF POLICY HOLDER

1 Sl No

2 Policy No.

3 Name of Policy Holder

4 Designation

5 Monthly Premium rate

6 April

7 May

8 June

9 July

10 August Amount actually recovered

11 September

12 October

13 November

14 December

15 January

16 February

17 March

18 Remarks

168
FORM GFR 21
[ See Rule 234 ]

REGISTER OF GRANTS TO BE MAINTAINED BY THE SANCTIONING AUTHORITY

(i) Serial Number.

(ii) Number and date of sanction letter.
(iii) Purpose of grant.
(iv) Conditions, if any, attached to the grant.
(v) Amount sanctioned.
(vi) Amount of the Bill.
(vii) Whether conditions attached to the grant have been accepted by the grantee without reservation.
(viii) Dated initials of the sanctioning authority.
(ix) Date by which statements of accounts along with utilization certificate, etc., are required to be furnished by
the grantee.
(x) Date by which utilization certificate is required to be furnished by sanctioning authority to the Accounts
Officer, as the case may be.
(xi) Date by which the statements of accounts, etc., are actually received. (In case there has been delay in the
receipt of these statements, the reasons therefor as well as efforts made by the sanctioning authority to
expedite submission of such statements may be clearly indicated).
(xii) Date of submission of utilization certificate to PAO (in case there has been delay in submission of utilization
certificate, the reasons therefor may be clearly indicated).
(xiii)Unspent balance, if any, also indicating whether the unspent balance has been surrendered by the grantee
Institution / Organisation.

169
FORM GFR - 22
[ See Rule211 (ii) (a) ]

REGISTER OF FIXED ASSETS

Name and description of the Fixed Assets..........................................

Date Particulars Particulars of supplier Cost of Location of the Remarks

of Asset the Asset Asset
Name and Bill No.
address and date
1 2 3 4 5 6 7

NOTE : The items of similar nature but having significant distinctive features (e.g. study table, office table, computer
table, etc.) should be accounted for separately in stock.

170
FORM GFR 23
[ See Rule211 (ii) (b) ]

STOCK REGISTER OF CONSUMABLES SUCH AS STATIONERY,

CHEMICALS, SPARE PARTS ETC.

Name of Article............................................ Unit of Accounts .........................................

Date Particulars Suppliers Receipt Issue Issue Balance Unit

Invoice No. Voucher Price
and Date No.
1 2 3 4 5 6 7 8

NOTE : User’s indent in original shall be treated as issue voucher. Issue voucher number shall be in consecutive
order, financial year wise and it should be noted on each indent.

171
FORM GFR 24
[ See Rule211 (ii) (d) ]

REGISTER OF ASSETS OF HISTORICAL / ARTISTIC VALUE

Name of Asset.......................................

Date of Source of Cost price, Particulars which Particulars of Location Remarks

acquisition acquisition if any make it an asset of the custodian of the
historic /artistic value of the asset asset

NOTE 1 : The custodian shall take appropriate measures for preservation of the assets.
NOTE 2 : The present value of the asset should be ascertained by obtaining appropriate valuation from an expert
agency and the same is indicated in Column 3, every five years.

172
FORM GFR 25
[ See Rule 281. (2) & (3) ]

GOVERNMENT GUARANTEES
Name of Ministry /
Department [ Rs. In crore ]
SI. Beneficiary Loan Authority Period of Purpose Class Sector Details Details Amount
No. [Name of Holder / for validity of Loan of of of Loan
the PSU etc Entity Guarantee [ MOF ID No., Reschedul Securities
in whose giving [MoF & date through e pledged
favour Loan approval which the
guarantee No. & Date] guarantee was
is given] last extended]

1 2 3 4 5 6 7 8 9 10 11

Extent of Additions Deletions Invoked Outstanding Rate of Guarantee Fee/ Other

Guarantee Principal, Guarantee Commission conditions
Dis- Not interest etc at Fee/ Receiv- Recei- &
Principal

Interest

the end of Commi- compli-

Total

charged dis- able ved

charged the period ssion ance

12 13 14 15 16 17 18 19 20 21 22 23

NOTES - 1 : For the purpose of Column - 8 the sectors are as under :-

(i) Power (ii) Cooperative (iii) Irrigation (iv) Roads & Transport (v) Urban Development & Housing (vi) Other
Infrastructure (vii) Any other. 2 : For the purpose of Column - 7 the classification is indicated in Rule 281 (4).

173
FORM GFR 26
[ See Rule277(v). ]

FURNISHING OF DATA REGARDING GUARANTEES TO

MINISTRY OF FINANCE

Name of the Ministry/Department :

Name of Public Sector Undertaking / entity :

Year Turnover Profit Sundry Current If audited by In case of

After tax Debtors Ratio CAG, profit after targets set
tax, taking into by BIFR the
account the same for
comments of Turnover and
CAG Profit.

X-2

X-1

X*

Where ‘X’ is the immediate preceding financial year.

2. In case of proposal seeking extension of guarantee it may specifically be indicated whether the guarantee fee
for the preceding financial year has been paid or not. The amount paid and date of payment should be indicated.
In case of default in payment it may be indicated whether default fee in terms of Rule 279 (3) has been levied.

174