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GENERAL FINANCIAL RULES 2017, , An introduction to General Financial Rules:, General Financial Rules (GFRs) are a compilation of rules and orders, of Government of India (executive instructions) to be observed by all, Departments and Organisations under the Government while, dealing with matters involving public finances. They are issued by, the Department of Expenditure under the Ministry of Finance,, Government of India., General Financial Rules were issued for the first time in 1947 and, subsequently modified and issued as GFRs 1963 and GFRs 2005., Finally GFRs, 2017 have evolved taking into consideration the, innovative changes in the way government conducts its business, for, example:, 1. Reforms in Government budgeting like removal of distinction in, non-plan and plan expenditure, merger of Railway Budget with, General Budget, focusing on outcomes through an improved, Outcome Budget document., 2. Increased focus on Public Finance Management System (PFMS)., 3. Reliance on the Direct Benefit Transfer (DBT) Scheme to ensure, efficient delivery of entitlements., 4. Introduction of new e-sites like Central Public Procurement Portal,, Government e-Marketing (GeM) Portal, Non-Tax Revenue Portal., GFR 2017 contains:, Chapters: 1-12, Appendices: 1-12, Forms: GFR 1 to GFR 26, Concordance Table, , 1|Page, , Compiled by: Dr Sajad A. Wani (KAS)
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GENERAL FINANCIAL RULES 2017, , Chapter – 1, INTRODUCTION, Rule 1. Short Title and Commencement:, These rules may be called as General Financial Rules, 2017 and shall, come into force at once and shall be applicable to all Central, Government Ministries/Departments, attached and subordinate, bodies. The provisions contained in GFRs are deemed to be, applicable to Autonomous Bodies except to the extent the bye-laws, of an Autonomous Body provides for separate Financial Rules which, have been approved by the Government., Rule 2. Definition:, “Constitution” means the Constitution of India;, “President” means the President of India;, “Government” means the Central Government;, “Administrator” means Administrator of a Union Territory, by, whatever name designated;, Note: Every union territory is administered by the President acting, through an administrator appointed by him. An administrator of a, union territory is an agent of the President and not head of state like, a governor. The President can specify the designation of an, administrator as Lieutenant Governor or Chief Commissioner or, Administrator. At present, it is Lieutenant Governor for Delhi, J&K,, Puducherry and Andaman and Nicobar Islands and Administrator for, Chandigarh, Dadra and Nagar Haveli, Daman and Diu and, Lakshadweep., 2|Page, , Compiled by: Dr Sajad A. Wani (KAS)
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GENERAL FINANCIAL RULES 2017, , “Competent Authority” means the President or such other authority, to which the power is delegated by or under the Delegation of, Financial Power Rules or any other general or special orders issued, by the Government of India, in respect of the power to be exercised, under any of these Rules., “Head of the Department” means an authority or person (not below, the rank of a Deputy Secretary to the Government of India) declared, by the concerned Department as a Head of Department in relation to, an identifiable establishment or establishments to exercise the, delegated financial powers., “Controlling Officer” means an officer (including a Head of, Department and an Administrator) entrusted by a Department of the, Central Government with the responsibility of controlling the, incurring of expenditure and/or the collection of revenue., “Head of Office” means a Gazetted Officer declared as such in the, Delegation of Financial Powers Rules and any other authority, declared as such under any general or special orders of the, competent authority;, “Drawing and Disbursing Officer” means an officer authorised to, draw bills and make payments on behalf of the Government. He may, be a Head of Office, any other Gazetted Officer so designated by a, Department, a Head of Department or an Administrator., “Comptroller and Auditor General” means the Comptroller and, Auditor General of India;, Note: He is the head of the Indian Audit and Accounts Department., 3|Page, , Compiled by: Dr Sajad A. Wani (KAS)
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GENERAL FINANCIAL RULES 2017, , He is regarded as the most important Officer under the Constitution, of India and also as guardian of the public purse and controls the, entire financial system of the country at both the levels—the Centre, and the state. He is one of the bulwarks of the democratic system of, government in India., “Accounts Officer” means the Head of an Office of Accounts or the, Head of a Pay and Accounts Office set up under the scheme of, departmentalization of accounts;, Note: Departmentalisation of union accounts took place in 1976., “Audit Officer” means the Head of an Office of Audit;, “Department of the Government of India” means any of the, Ministries, Departments, Secretariats and Offices (Mantralaya,, Vibhag, Sachivalaya tatha Karyalaya) as notified from time to time, and listed in the First Schedule to the Government of India, (Allocation of Business Rules)1961;, “Subordinate authority” means a Department of the Central, Government or any authority subordinate to the President;, “Ministry of Finance” means the Ministry of Finance of the Central, Government;, Note: Ministry of Finance comprises of 6 departments., “Financial Year” means the year beginning on the 1st of April and, ending on the 31st of March following;, Note: For example: Financial year 2021-22 means year beginning on, the 1st of April 2021 and ending on the 31st of March 2022., , 4|Page, , Compiled by: Dr Sajad A. Wani (KAS)
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GENERAL FINANCIAL RULES 2017, , “Primary unit of appropriation” means a primary unit of, appropriation referred to in Rule 8 of the Delegation of Financial, Powers Rules 1978;, Note: The detailed head or object head of expenditure under which, the grant (appropriation) is made (assigned) is called primary unit of, appropriation. For example: Salaries, Travel expenses etc., “Appropriation” means the assignment of funds included in a, primary unit of appropriation in order to meet specified expenditure;, “Re-appropriation” means the transfer of funds from one primary, unit of appropriation to another such unit;, “Government Account” means the account relating to the, Consolidated Fund, the Contingency Fund and the Public Account., “Consolidated Fund” means the Consolidated Fund of India referred, to in Article 266 (1) of the Constitution;, Note: Consolidated Fund of India includes:, 1. All revenues received by the Government of India,, 2. All loans raised by that Government by the issue of treasury bills,, loans or ways and means advances,, 3. All moneys received by that Government in repayment of loans., No amount can be drawn from this fund without authorisation of, the parliament., “Public Account” means the Public Account of India referred to in, Article 266 (2) of the Constitution;, Note: "All other public moneys received by or on behalf of the, Government of India or the Government of a State shall be credited, to the public account of India or the public account of the State, as, 5|Page, , Compiled by: Dr Sajad A. Wani (KAS)
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GENERAL FINANCIAL RULES 2017, , the case may be." Here "other" signifies other than the Consolidated, Fund of India. The government is merely acting as a banker in the, transactions of public account. This includes provident fund deposits,, judicial deposits, departmental deposits, etc. This account is, operated by executive action., “Contingency Fund” means the Contingency Fund of India, established under the Contingency Fund of India Act, 1950, in terms, of Article 267 (1) of the Constitution;, Note: Contingency Fund is in the nature of an imprest (money, maintained for a specific purpose) placed at the disposal of the, President to enable him/her to make advances to meet urgent, unforeseen expenditure, pending authorization by the Parliament., Approval of the Parliament for such expenditure and for withdrawal, of an equivalent amount from the Consolidated Fund is subsequently, obtained, whereupon the advances from the Contingency Fund are, recouped to the Fund. The fund is held by the Finance Secretary, (Department of Economic Affairs) on behalf of the President., This fund is operated by executive action., “Local Body” means an authority legally entitled or specially, empowered by Government to administer a local fund., Note: Local bodies are the institutions of the local self governance, both rural (Eg, Panchayats) and urban (Eg, Municipalities) established, to build democracy at the grass root level., “Local Fund” means a local fund as defined in Rule 652 of the, Treasury Rules;, Note: Rule 652 of the Treasury Rules:, The expression “Local Fund” denotes:—, (i) revenues administered by bodies which by law or rule having the, 6|Page, , Compiled by: Dr Sajad A. Wani (KAS)
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GENERAL FINANCIAL RULES 2017, , force of law come under the control of the Government, whether in, regard to the proceedings generally, or to specific matters such as, the sanctioning of their budgets, sanction to the creation or filling up, of particular appointments, the encashment of leave, pension or, similar rules;, (ii) the revenues of anybody which may be specially notified by the, Government as such., “Recurring expenditure” means the expenditure which is incurred at, periodical intervals for the same purpose., Note: It is normal, ongoing, frequent and routine expenditure. For, example: salaries., “Non-recurring expenditure” means expenditure other than, recurring expenditure., Note: It is infrequent and non repetitive expenditure. For example:, Construction of a building., “Public Works” means works for the use of general public. They, include the civil/ electrical works including public buildings, public, services, transport infrastructure etc., both original and repair works, and any other project, including infrastructure., “Reserve Bank” means the Reserve Bank of India or any office or, agency of the Reserve Bank of India and includes any Bank acting as, the agent of the Reserve Bank of India in accordance with the, provisions of the Reserve Bank of India Act, 1934 (Act II of 1934);, “Treasury Rules” means the Treasury Rules of the Central, Government;, , 7|Page, , Compiled by: Dr Sajad A. Wani (KAS)
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GENERAL FINANCIAL RULES 2017, , 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 contact after, warranty period and finally disposing the product after useful life;, OPEX model: In the OPEX model, the Seller provides the goods,, maintains it and also provides the consumables as required and, finally takes back the goods after useful / contracted life. The, (Operating) expenditure is made by the Buyer in a staggered manner, as per the terms and conditions of the contract., Rule 3 Interdepartmental consultations:, When the subject of a case concerns more than one Department, no, order shall be issued until all such Departments have concurred, or,, failing such concurrence, a decision has been taken by or under the, authority of the Cabinet., Rule 4 Departmental Regulations of financial character:, All Departmental regulations, in so far as they embody orders or, instructions of a financial character or have important financial, bearing, must invariably be made by, or with the approval of the, Ministry of Finance., Rule 5 Removal of Doubts:, Where a doubt arises as to the interpretation of any of the provisions, of these Rules, the matter shall be referred to the Ministry of Finance, for decision., Rule 6 Modifications:, The systems and procedures established by these Rules are subject, to general or special instructions/ orders issued by the Ministry of, Finance from time to time and may be modified by any other, authority only with the express approval of the Ministry of Finance., , 8|Page, , Compiled by: Dr Sajad A. Wani (KAS)
