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«Government of India Ministry of Finance Department of Expenditure General Financial Rules, 2005* (* Amendments issued upto March 2010 have been added as ...»

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General Financial

Rules, 2005

Government of India

Ministry of Finance

Department of Expenditure

General Financial

Rules, 2005*

(* Amendments issued upto March 2010 have been added

as Annexures)


General Financial Rules (GFRs) are a compendium of general provisions to be

followed by all offices of Government of India while dealing with matters of a financial


2. General Financial Rules were first issued in 1947 and were in the form of executive instructions. These were subsequently modified and issued as General Financial Rules,

1963. Over the last four decades, these GFRs had to be amplified and supplemented by various decisions of the Government of India. Many of the rules had also become redundant. These developments including a rapid growth of alternative service delivery systems, developments in information technology, outsourcing of services and liberalization of the system of procurement, accounting and disposal of goods in line with the international practices necessitated an overall review of the General Financial Rules, 1963. A Task Force was set up for this purpose. The report submitted by the Task Force was widely circulated to all the Departments and Ministries and their suggestions were duly considered for making appropriate changes.

3. General Financial Rules, 2005 have evolved as a result of the wide consultations and extensive review. The rules have been simplified and put in a logical sequence for easy comprehension. The appendices and forms of General Financial Rules, 1963 have also been comprehensively reviewed but for the sake of convenience and to avoid confusion, the existing form numbers have been retained. Provisions regulating advances to government servants have been excluded from GFRs as these are distinct from direct government expenditure. These provisions have been issued separately as a compendium.

4. It is expected that General Financial Rules, 2005 will provide greater flexibility to officers in transacting government business while ensuring accountability commensurate with responsibility at different levels of Government.

5. Finally, Department of Expenditure would like to place on record the excellent work done by the Task Force on review of GFRs, the CGA, the Office of the C&AG, Budget Division of Department of Economic Affairs and the Ministries and Departments which gave valuable inputs for carrying out the exercise.

(Adarsh Kishore) Secretary to the Government of India New Delhi, Ministry of Finance July 1st, 2005. Department of Expenditure

–  –  –

Rule 1. Short title and commencement :

(1) These rules may be called General Financial Rules, 2005.

(2) They shall come into force at once.

Rule 2. Definitions : In these rules, unless the context otherwise requires – (i) “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;

(ii) “Administrator” means Administrator of a Union Territory;

(iii) “Appropriation” means the assignment, to meet specified expenditure, of funds included in a primary unit of appropriation;

(iv) “Audit Officer” means the Head of an Office of Audit;

(v) “Competent Authority” means, in respect of the power to be exercised under any of these rules, the President or such other authority to which the power is delegated by or under these rules, Delegation of Financial Power Rules, 1978 or any other general or special orders issued by the Government of India;

(vi) “Comptroller and Auditor-General” means the Comptroller and Auditor-General of India;

(vii) “Consolidated Fund” means the Consolidated Fund of India referred to in Article 266 (1) of the Constitution;

(viii) “the Constitution” means the Constitution of India;

(ix) “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;

(x) “Controlling Officer” means an officer entrusted by a Department of the Central Government with the responsibility of controlling the incurring of expenditure and/or the collection of revenue. The term shall include a Head of Department and also an Administrator;

(xi) “Department of the Central Government” means a Ministry or a Department of the Central Government as notified from time to time and includes the Planning Commission, the Department of Parliamentary Affairs, the President’s Secretariat, the Vice-President’s Secretariat, the Cabinet Secretariat and the Prime Minister’s Secretariat;

(xii) “Disbursing Officer” means a Head of Office and also any other Gazetted Officer so designated by a Department of the Central Government, a Head of Department or an Administrator, to draw bills and make payments on behalf of the Central Government. The term shall also include a Head of Department or an Administrator where he himself discharges such function;

(xiii) “Finance Ministry” means the Finance Ministry of the Central Government;

(xiv) “Financial year” means the year beginning on the 1st of April and ending on the 31st of March following;

(xv) “Government” means the Central Government;

(xvi) “Head of a Department” in relation to an office or offices under its administrative control means (a) an authority specified in Schedule I of the Delegation of Financial Powers Rules, 1978, and (b) any other authority declared as such under any general or special orders of the competent authority;

(xvii) “Head of Office” means (a) a Gazetted Officer declared as such under Rule 14 of the Delegation of Financial Powers Rules, 1978, and (b) any other authority declared as such under any general or special orders of the competent authority;

(xviii) “Local Body” means an authority legally entitled or specially empowered by Government to administer a local fund;

(xix) “Local Fund” means a local fund as defined in Rule 652 of the Treasury Rules;

(xx) “non-recurring expenditure” means expenditure other than recurring expenditure;

(xxi) “President” means the President of India;

(xxii) “Primary unit of appropriation” means a primary unit of appropriation referred to in Rule 8 of the Delegation of Financial Powers Rules, 1978;

(xxiii) “Public Account” means the Public Account of India referred to in Article 266 (2) of the Constitution;

(xxiv) “Public Works” means civil works and irrigation, navigation, embankment and drainage works;

(xxv) “reappropriation” means the transfer of funds from one primary unit of appropriation to another such unit;

(xxvi) “recurring expenditure” means the expenditure which is incurred at periodic intervals;

(xxvii) “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);

(xxviii) “Subordinate authority” means a Department of the Central Government or any authority subordinate to the President; and (xxix) “Treasury Rules” means the Treasury Rules of the Central Government.

Rule 3. Interdepartmental Consultations : When the subject of a case concerns more than one department, no order should 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.

In this regard it is clarified that every case in which a decision, if taken in one Department, is likely to affect the transaction of business allotted to another department, shall be deemed to be a case the subject of which concerns more than one department.

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, shall be made by, or with the approval of the Finance Ministry.

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 Finance Ministry for decision.

–  –  –

Rule 7. General Principles : All moneys received by or on behalf of the Government either as dues of Government or for deposit, remittance or otherwise, shall be brought into Government Account without delay, in accordance with such general or special rules as may be issued under Articles 150 and 283 (1) of the Constitution.

Rule 8.

(1) (i) Under Article 284 of the Constitution all moneys received by or deposited with any officer employed in connection with the affairs of the Union in his capacity as such, other than revenues or public moneys raised or received by Government, shall be paid into the Public Account.

(ii) All moneys received by or deposited with the Supreme Court of India or with any other Court, other than a High Court, within a Union Territory, shall also be dealt with in accordance with Clause (i) of sub-rule (1).

(2) The Head of Account to which such moneys shall be credited and the withdrawal of moneys therefrom shall be governed by the relevant provisions of Government Accounting Rules 1990 and the Central Government Account (Receipts and Payments) Rules, 1983 or such other general or special orders as may be issued in this behalf.

Rule 9. It is the duty of the Department of the Central Government concerned to ensure that the receipts and dues of the Government are correctly and promptly assessed, collected and duly credited to the Consolidated Fund or Public Account as the case may be.

Rule 10. The Controlling Officer shall arrange to obtain from his subordinate officers monthly accounts and returns in suitable form claiming credit for the amounts paid into the treasury or bank as the case may be, or otherwise accounted for, and compare them with the statements of credits furnished by the Accounts Officer to see that the amounts reported as collected have been duly credited.

For this each Accounts Officer will send an extract from his accounts showing the amounts brought to credit in the accounts in each month to the Controlling Officer concerned.

Rule 11.

(1) Detailed rules and procedure regarding assessment, collection, allocation, remission and abandonment of revenue and other receipts shall be laid down in the regulations of the department responsible for the same.

(2) In departments in which officers are required to receive moneys on behalf of Government and issue receipts therefor in Form GAR-6 the departmental regulations should provide for the maintenance of a proper account of the receipt and issue of the receipt books, the number of receipt books to be issued at a time to each officer and a check with the officer’s accounts of the used books when returned.

Rule 12. Amounts due to Government shall not be left outstanding without sufficient reasons.

Where such amounts appear to be irrecoverable, the orders of the competent authority shall be obtained for their adjustment.

Rule 13. Unless specially authorized by any rule or order made by competent authority, no sums shall be credited as revenue by debit to a suspense head.

The credit must follow and not precede actual realization.

Rule 14. Subject to any general or special orders issued by a Department of the Central Government, an Administrator or a Head of a Department responsible for the collection of revenue shall keep the Finance Ministry fully informed of the progress of collection of revenue under his control and of all important variations in such collections as compared with the Budget Estimates.

Rule 15. Rents of buildings and lands :

(1) When the maintenance of any rentable building is entrusted to a civil department, other than the Central Public Works Department, the Administrator or the Head of the Department concerned shall be responsible for the due recovery of the rent thereof.

(2) The procedure for the assessment and recovery of rent of any building hired out will be regulated generally by the rules applicable to residences under the direct charge of the Central Public Works Department.

(3) The detailed rules and procedure, regarding the demand and recovery of rent of Government buildings and lands, are contained in the departmental regulations of the departments in charge of those buildings.

Rule 16. Fines :

(1) Every authority having the power to impose and/ or realize a fine shall ensure that the money is realized, duly checked and deposited into a treasury or bank as the case may be.

(2) Every authority having the power to refund fines shall ensure that the refunds are checked and no double refunds of amounts of fines collected or refunds of fines not actually paid into a treasury or bank as the case may be, are made.

Rule 17. Miscellaneous Demands : The Accounts Officer shall watch the realization of miscellaneous demands of Government, not falling under the ordinary revenue administration, such as contributions from State Governments, Local Funds, contractors and others towards establishment charges.

Rule 18. Remission of Revenue : A claim to revenue shall not be remitted or abandoned save with the sanction of the competent authority.

Rule 19.

(1) Subject to any general or special orders issued by the Government Departments of the Central Government, Administrators and Heads of Departments, other than those in the Department of Posts, shall submit annually on the 1st of June to the Audit Officer and the Accounts Officer concerned, statements showing the remissions of revenue and abandonment of claims to revenue sanctioned during the preceding year by competent authorities in exercise of the discretionary powers vested in them otherwise than by law or rule having the force of law, provided that individual remissions below Rupees one hundred need not be included in the statements.

(2) For inclusion in the statements referred to in Rule 19 (1) above, remissions and abandonments should be classified broadly with reference to the grounds on which they were sanctioned and a total figure should be given for each class. A brief explanation of the circumstances leading to the remission should be added in the case of each class.

Rule 20. Departments of the Central Government and Administrators may make rules defining remissions and abandonments of revenue for the purpose of Rule 19 above.

–  –  –

Rule 21. Standards of financial propriety : Every officer incurring or authorizing expenditure from public moneys should be guided by high standards of financial propriety.

Every officer should also enforce financial order and strict economy and see that all relevant financial rules and regulations are observed, by his own office and by subordinate disbursing officers. Among the principles on which emphasis is generally laid are the following :i) Every officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money.

(ii) The expenditure should not be prima facie more than the occasion demands.

(iii) No authority should exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly to its own advantage.

(iv) Expenditure from public moneys should not be incurred for the benefit of a particular person or a section of the people, unless a) a claim for the amount could be enforced in a Court of Law, or (b) the expenditure is in pursuance of a recognized policy or custom.

(v) The amount of allowances granted to meet expenditure of a particular type should be so regulated that the allowances are not on the whole a source of profit to the recipients.

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