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AAYUSH ACADEMY-2022, GAR-1990, , GOVERNMENT ACCOUNTING RULES, 1990, Preamble - In exercise of the powers conferred by Article 150 of the Constitution, the President on the, advice of the Comptroller and Auditor General, hereby makes the following basic rules relating to the, form of accounts of the Union and States. This compilation incorporates also the general principles of, Government accounting laid down by the Comptroller and Auditor General for the guidance of, Government Departments., , 4. Annual Accounts Every year, from the accounts compiled by the authorities authorised to maintain, the accounts of Central Government, State Governments and Union Territory Governments, accounts, showing under the respective heads the annual receipts and disbursements for the purpose of Union of, each State and of each Union Territory having a Legislative Assembly (including Appropriation Accounts), are to be prepared and got certified by the Comptroller and Auditor General of India. The reports of the, Comptroller and Auditor General relating to these accounts shall be submitted to the President or the, Governor of a State or the Administrator of a Union Territory having a Legislative Assembly, as the case, may be, who shall cause them to be laid before the Houses of Parliament, Legislatures of the States and, of Union Territories respectively., 5. Issue of Subsidiary Instructions Subsidiary instructions that would be necessary for carrying into effect, the provisions of these rules, and in particular, instructions for opening new heads of accounts or, modification of the existing ones or instructions relating to the content and manner of maintenance of, accounts, -will be issued by the Central Government in the Ministry of Finance on the advice of the, Comptroller and Auditor General of India, in the form of executive orders, indicating wherever, necessary, the types of cases in which the advice of the Comptroller and Auditor General could be, assumed to have been obtained., 6. Special provision relating to Railways, Posts, Telecommunication and Defence Departments For the, sake of practical convenience, the forms of accounts (including appropriation accounts), relating to, Railways, Posts, Telecommunications and Defence Department, may be determined by the, Departmental Accounting authorities within such range and covering such aspects as may be prescribed, by the Central Government in the Ministry of Finance (Department of Expenditure—Controller General, of Accounts), on the advice of the Comptroller and Auditor General of India. The provisions of Article

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150 of the Constitution will be deemed to have been satisfied if the forms so determined are not, questioned by the Controller General of Accounts and the Comptroller and Auditor General of India., , Chapter 2 - GENERAL OUTLINES OF THE SYSTEM OF ACCOUNTS, 7. Agreements of the Central Government with the Reserve Bank The Central Government has entered, into an agreement with the Reserve Bank of India by virtue of which the general banking business of the, Government (in which business is included the receipt, collection, payment and remittance of moneys, on behalf of the Government) is carried on and transacted by the Reserve Bank in accordance with and, subject to the provisions of the agreement and of the Reserve Bank of India Act, 1934, and also in, accordance with and subject to such orders as may, from time to time be given to the Reserve Bank by, the Central Government., 8. Account of the Central Government with the Bank (1) Ministries and Departments of the Central, Government shall, as a rule, operate on such offices and branches of the Reserve Bank and or of the, bank, as have been, or may be nominated for handling the receipt and payment transactions of the, particular Ministry or Department., , (2) Each office or branch of the Reserve Bank or bank handling transactions of the Ministries,, Departments of the Central Government shall maintain separate accounts in respect of each Ministry, and Department banking with it and render an account of the transactions to the Pay and Accounts, Officer of the concerned Ministry and, or Department, at such intervals as may be prescribed by the, Government, together with all the supporting challans, paid cheques. These transactions shall also be, routed through the banking channel prescribed by the Reserve Bank of India, to facilitate their, incorporation in the books of the Reserve Bank of India, Central Accounts Section, at Nagpur which is, responsible for keeping a complete account, of receipt and payments (including inter-Governmental, adjustments and adjustments inter se of Defence, Railways and Posts—other than Telecommunications), on account of the Central Government., (3) The transactions of Railways, Posts, Telecommunications and Defence Department arising at offices, and branches of the Reserve Bank and State Bank of India, acting as agent of the Reserve Bank shall be, distinguished from other Central transactions in the initial accounts and classified separately for each, Railways, each circle of Posts, each Accounts Officer of Telecommunication, and each Controller of, Defence Accounts respectively. These transactions will be taken against the Railway Fund, Postal, Account, Telecommunication Account and Defence Account respectively, in the books of the Reserve, Bank. Each office and branch of the Reserve Bank entrusted with the work shall furnish to Accounts, Officer concerned of the Railways, Postal, Telecommunications and Defence Department, as the case, may be, daily scrolls relating to the transactions pertaining to each, together with the requisite challans,, paid cheques.

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Accounts of State Governments with the bank Each State Government has made a separate agreement, with the Reserve Bank of India by virtue of which the general banking business of that Government (in, which business is included, the receipt, collection, payment and remittance of moneys on behalf of that, Government) is carried on and transacted by the Reserve Bank, in accordance with and subject to the, provisions of the agreement and of the Reserve Bank of India Act, 1934, and in accordance with and, subject to such orders as may from time to time be given to the Reserve Bank by the State Government., The operations of each State shall, however, be confined to the offices and branches of the Reserve, Bank of India and of the bank which have been designated as falling within the area of that particular, State. The receipt and payment of moneys on behalf of a State outside its jurisdiction shall ordinarily be, arranged through the Accountant General of the State in which the transactions take place., , 14. Broad outlines of the accounts - feeder-network and system of accounts of the Central Government, and Union Territory Administrations. The broad outlines are as follows:- (a) All receipts in India on behalf, of the Central Government (other than those of Union Territory Administrations which are having the, treasury system) shall be paid into the bank. Drawals in India on behalf of the Central Government from, the bank shall be made by cheques drawn thereon. These shall be accounted for by the bank as receipts, and payments on behalf of the concerned Ministry and/or Department of the Central Government. In, support of receipt and payment transactions at the bank, daily receipt and payment scrolls supported, respectively by challans and paid cheques shall be sent by the bank to the Accounts Officer of the, Ministry or Department concerned. (b) At present, some miscellaneous receipt and payment, transactions (viz. payment of interest, repayment of principal on discharge of Central Government, Securities and pensions including pensions to freedom-fighters) take place at State treasuries. Such, transactions shall be accounted for by the treasuries in the State Section of Treasury accounts under the, head "PAO Suspense - Transactions adjustable by PAO Ministry/ Department of .................. ' below the, major head '8658 - Suspense Accounts' for necessary cash settlement by the State Accountant General, with the concerned Pay and Accounts Office., , 18. Proforma Accounts The operations of some departments of Government sometimes include, undertakings of a commercial or a quasi-commercial character e.g., an industrial factory or a store. Even, though they may be maintained almost entirely for the benefit of the Department, it is still necessary, that the financial results of the undertaking should be expressed in the normal commercial form so that, the cost of the service or undertaking may be accurately known. This implies the maintenance of, suitable Capital, Manufacturing, Trading and Profit and Loss accounts and as the Government system of, account being on a purely cash basis is unsuitable for each commercial accounts, they will usually be, kept on a pro forma basis outside the general accounts of Government. The actual transactions entering, these pro forma accounts, except those adjusted on a liability basis, will find a place primarily in the, regular accounts and the commercial accounts will be additional as well as separate. These pro forma

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accounts shall be maintained by the Departmental authorities themselves in such form as may be, prescribed., , 18. Proforma Accounts The operations of some departments of Government sometimes include, undertakings of a commercial or a quasi-commercial character e.g., an industrial factory or a store. Even, though they may be maintained almost entirely for the benefit of the Department, it is still necessary, that the financial results of the undertaking should be expressed in the normal commercial form so that, the cost of the service or undertaking may be accurately known. This implies the maintenance of, suitable Capital, Manufacturing, Trading and Profit and Loss accounts and as the Government system of, account being on a purely cash basis is unsuitable for each commercial accounts, they will usually be, kept on a pro forma basis outside the general accounts of Government. The actual transactions entering, these pro forma accounts, except those adjusted on a liability basis, will find a place primarily in the, regular accounts and the commercial accounts will be additional as well as separate. These pro forma, accounts shall be maintained by the Departmental authorities themselves in such form as may be, prescribed.., , 21. Cash basis of Accounts With the exception of such book adjustments as may be authorised by these, rules or by any general or special orders issued by the Central Government on the advice of the, Comptroller and Auditor General of India, the transactions in Government accounts shall represent the, actual cash receipts and disbursements during a financial year as distinguished from amounts due to or, by Government during the same period. 22. Currency in which Accounts are kept The accounts of, Government shall be maintained in Indian currency i.e. rupees. All transactions of the Central and State, Governments taking place in other countries shall be passed on monthly by the Indian, Embassies/Missions to India and brought to account finally in the Indian books after they have been, converted into rupees. 23. Form of Accounts - Main Divisions of Accounts Government accounts shall be, kept in the following three parts:-, , Part I Consolidated Fund of India (including Union Territory Administration or of the State or Union, Territory Government concerned. Part II Contingency Fund, Part III Public Account of India (including Union Territory Administration/Government) or of the State, concerned., , In part I, namely Consolidated Fund, of the accounts, there shall be two main divisions, namely:— (i), Revenue Consisting of sections for 'Receipt heads (Revenue Account)' and 'Expenditure heads (Revenue, Account)'. (ii) Capital, Public Debt, Loans consisting of sections for 'Receipt heads (Capital Account)',, 'Expenditure heads (Capital Account)', and 'Public Debt', 'Loans', and 'Advances'. The first division shall

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comprise the section Receipt heads (Revenue Account) dealing with the proceeds of Part I Consolidated, Fund of India (including Union Territory Administration or of the State or Union Territory Government, concerned. Part II Contingency Fund Part III Public Account of India (including Union Territory, Administration/Government) or of the State concerned. taxation and other receipt classed as revenue,, and the Section 'Expenditure heads (Revenue Account)' dealing with expenditure met therefrom. The, second division shall comprise the following sections:— (a) The Section 'Receipt heads (Capital Account)', which deals with receipts of a Capital nature which cannot be applied as a set off to Capital Expenditure., (b) The Section 'Expenditure heads (Capital Account)' which deals with expenditure met usually from, borrowed funds with the object of increasing concrete assets of a material and permanent character. It, also includes receipts of a Capital nature intended to be applied as set off to Capital expenditure. (c) The, Section 'Public Debt' Loans and Advances, which comprise, of loans raised and their repayments by, Government such as, Internal Debt, External Debt of the Central Government, and loans and Advances, made by Governments and their recoveries; transactions relating to 'Appropriation to Contingency Fund', and 'Inter-State Settlement., , 24. Sectors and Sub-sectors of Accounts (a) Within each of the Divisions and sections of the, Consolidated Fund referred to in rule 23, the transactions shall be grouped into Sectors such as,, "General Services", "Social Services", "Economic Services", under which specific functions or services, shall be grouped. The Sectors shall be sub-divided into Major Heads of Account, in some cases the, Sectors are, in addition, sub-divided into sub-sectors before their division into Major Heads of Account., Each Sector in a section shall be distinguished by a letter of the Alphabet. (b) In Part II—Contingency, Fund, there shall be a single Major Head and all the transactions met out of the Contingency Fund shall, be recorded under it. (c) In the case of Part III—Public Account, the transactions shall be grouped into, sectors and sub-sectors, which shall be further sub-divided into Major Heads of Account. The, Sectors/Sub-Sectors shall be distinguished by letters of the alphabet., , 25. Allotment of Code to each Major Head and range of Code Numbers A four digit Code has been, allotted to the Major Head, the first digit indicating whether the Major Head is a Receipts Head or, Revenue Expenditure Head, or Capital Expenditure Head or Loans and Advances. Head or it pertains to, Public Account, if the first digit is '0' or '1', the Head of Account will represent Revenue Receipt; '2' or '3', will represent Revenue Expenditure; '4' or '5' Capital Expenditure; '6' or '7' Loans and Advances Head;, (4000 for Capital Receipt) and '8' will represent Contingency Fund and Public Account—(8000 for, Contingency Fund)., , The range of code numbers allotted under the scheme of codification is shown below:Part I - Consolidated Fund Major Head Code Nos.

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Section I Receipt Heads (Revenue Account) 0020-1999, Expenditure Heads (Revenue Account) 2011-3999, Section II - Receipt Head (Capital Account) 4000 Expenditure Heads (Capital Account) 4046-5999, Section III Public Debt, Loans & Advances 6001-7999, Part II - Contingency Fund 8000, Part III - Public Account 8001-8995., 40. Adjustment between Governments:- In the case of transactions between two Governments,, adjustment shall always be made if required by or under the provisions of the Constitution; and, otherwise, in such manner and to such extent as may be mutually agreed upon by the Governments, concerned.., , 41. Adjustments with Foreign Governments, outside bodies, etc. Unless exempted by Government by, general or special orders, services shall not be rendered without being paid for to any foreign, Government or non-government body or institution or to a separate fund constituted as such. Any relief, in respect of payment for services rendered or supplies made to any outside body or fund should, ordinarily be given through a grant-in-aid rather than by remission of dues., , 42. Inter-departmental adjustments For purposes of inter-departmental payments, the departments of a, Government shall be divided into service departments and commercial departments according to the, following principles. A. Service Departments: These are constituted for the discharge of those functions, which either (a) are inseparable from, and form part of the idea of Govt. or (b) are necessary to, and, form part of the general conduct of the business of Government. Examples of category (a) are: the, departments of Administration of Justice, Defence, Jails, Medical, Police, Public Health, Education,, Forest. Examples of category (b) are: the departments of Survey of India, Printing and Stationery, Public, Works (Building and Roads Branch), Central Purchase Organisation under Director General of Supplies, and Disposal, New Delhi. B. Commerical Departments or Undertakings: These are constituted mainly for, purposes of rendering services or providing supplies, of certain special kinds, on payment for the, services rendered or for the articles supplied. They perform functions which are not necessarily, Government functions. They are required to work to a financial result determined through account, maintained on commercial principles., , Buildings, lands, stores and equipment 59. Losses or deficiencies of such assets shall not be classified, under a separate head, in the accounts, though they should be written off from any value or commercial, account that may be maintained. If any transactions under these categories are recorded under a

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Suspense head in the Government accounts, losses or deficiencies relating thereto shall be written off, the Suspense heads also.