General Financial Rules, 2005

1 General FinancialRules, 2005 Government of IndiaMinistry of FinanceDepartment of ExpenditureGeneral FinancialRules, 2005*(* Amendments issued upto March 2010 have been addedas Annexures)PREFACEG eneral Financial Rules (GFRs) are a compendium of General provisions to befollowed by all offices of Government of India while dealing with matters of a Financial Rules were first issued in 1947 and were in the form of executiveinstructions. These were subsequently modified and issued as General Financial Rules, 1963. Over the last four decades, these GFRs had to be amplified and supplemented byvarious decisions of the Government of India. Many of the rules had also becomeredundant. These developments including a rapid growth of alternative service deliverysystems, developments in information technology, outsourcing of services and liberalizationof the system of procurement, accounting and disposal of goods in line with the internationalpractices necessitated an overall review of the General Financial Rules, 1963.

2 A TaskForce was set up for this purpose. The report submitted by the Task Force was widelycirculated to all the Departments and Ministries and their suggestions were duly consideredfor making appropriate Financial Rules, 2005 have evolved as a result of the wide consultationsand extensive review. The rules have been simplified and put in a logical sequence foreasy comprehension. The appendices and forms of General Financial Rules, 1963 havealso been comprehensively reviewed but for the sake of convenience and to avoidconfusion, the existing form numbers have been retained. Provisions regulating advancesto government servants have been excluded from GFRs as these are distinct from directgovernment expenditure. These provisions have been issued separately as a is expected that General Financial Rules, 2005 will provide greater flexibility toofficers in transacting government business while ensuring accountability commensuratewith responsibility at different levels of , Department of Expenditure would like to place on record the excellent workdone by the Task Force on review of GFRs, the CGA, the Office of the C&AG, BudgetDivision of Department of Economic Affairs and the Ministries and Departments whichgave valuable inputs for carrying out the exercise.

3 (Adarsh Kishore)Secretary to the Government of India New Delhi, Ministry of FinanceJuly 1st, 2005. Department of ExpenditureTABLE OF CONTENTSC hapterName of the ChapterPage No. System of Financial Principles relating to expenditure and payment of and of records & information83 Budget formulation and Accounts155 Works256 Procurement of Goods and of of Services337 Inventory Management378 Contract Management419 Grants-in-aid and Loans4510 Budgeting and Accounting for Externally Aided Projects5911 Government Guarantees6312 Miscellaneous of and misc. obligations of of land and endowments and other trusts71 VII. Local of records connected with and Miscellaneous No. for regulating the Enforcement of Responsibility for losses, etc.,732 Procedure for the preparation of Detailed Estimates of Receipts743 Instructions for the preparation of Detailed Estimates of expenditure from theConsolidated Fund754 Procedure for compilation of Detailed Demands for Grants815 Procedure for consolidation of the Estimates and Demands for GrantsDeleted6 Procedure to be followed in connection with the Demands for Supplementary Grants837 The Contingency Fund of India Rules848 Rules for the Supply of Articles required to be purchased for Public regulating the Purchase of Stationery Stores for the Public ServiceDeleted10 Subsidiary Instructions in regard to the terms of occupation of Government residencesDeleted11 Transfer of Land and Buildings between the Union and State Governments8712 Charitable Endowments and other Trusts8913 Destruction of Office Records connected with against

4 Provision of funds11015 Formula for Price Variation Clause11116 Rates of Guarantee Fee prevalent in July, 2004112(ii)FORMSFormDescriptionPage 1 Model Form of Warranty ClauseDeletedGFR 2 DeletedGFR 3 Statement of new Major Works under Civil Works - Central ..DeletedGFR 4 Application for an Additional Appropriation113 GFR 5 Revenue Receipts114 GFR 5 - AEstimates of foreign grants115 GFR 5 - BEstimates of Interest receipts and loan repayments116 GFR 6 Liability Register117 GFR 6 - ALiability Statement119 GFR 7 Statement of proposals for pre-budget discussions122 GFR 8 DeletedGFR 9 Register showing expenses by Heads of Account123 GFR 10 Broadsheet for watching receipt of account from Disbursing Officers124 GFR 11 Compilation Sheet125 GFR 12 Consolidated Accounts126 GFR 13 Broadsheet for watching Receipt of the Returns from the Heads ofDepartments under a Department of the Central Government127 GFR 14 Intimation regarding payments made by DGS&DDeletedGFR 15 DeletedGFR 16 DeletedGFR 17 Report of Surplus.

5 Obsolete and Unserviceable Stores for Disposal128 GFR 18 Sale Account129 GFR 19 Assets acquired from GrantsDeletedGFR 19 - A Form of Utilization Certificate130 GFR 19 - B Form of Utilization Certificate131 GFR 20 Statement of aggregate balance of loan(s) outstanding as on31st March 20, and details of defaults132 GFR 21 Form of Surety 22 Form of agreement for advance for purchase of Motor Vehicle 22 - A DeletedGFR 22 - B DeletedGFR 23 Form of agreement for advance for purchase of Motor Vehicle 23 - A Form of Agreement to be executed between a Department of theCentral Government, etc., and an Undertaking, etc., owned or controlledby the Central Government or a State Government at the time of sanctioningan advance for the purchase of a vehicle to an employee of the undertaking, etc.,during his deputation with the Central Government (Rule 192-A)DeletedGFR 24 Form of Mortgage Bond for Motor Vehicle / Personal Computer - Initial AdvanceDeletedGFR 25 Form of Mortgage Bond for Motor Vehicle - Further AdvanceDeletedGFR 25 - A Form of Mortgage Bond for Motor Vehicle purchased with saleproceeds of an old one (Rule 205)DeletedGFR 26 DeletedGFR 27 Application form for an Advance for the Purchase of a Motor Car/Motor Cycle/Personal ComputerDeletedGFR 27 - A Application Form for an advance for the Purchase of Table FanDeletedGFR 28 Surety BondDeleted(iii)GFR 29 Form of Agreement for adjustment of refund of advance of given tonon-official members of Committees and Commissions appointed by GovernmentDeletedGFR 30 Form of Cash Security Bond134 GFR 31 Form of Security Bond (Fidelity Bond Deposited as Security)

6 135 GFR 32 Form of Written Undertaking to be executed by an Undertaking/Corporationwholly owned by the Central Government at the time of sanctioning of a 33 Certificate of transfer of charge138 GFR 33 - A Joining Report138 GFR 34 Fidelity Guarantee Policy139 GFR 35 Accession Register141 GFR 36 Notice to borrower about the due date for repayment of loan and interest thereon142 GFR 37 Form of application for grant of flood advanceDeletedGFR 38 Register of Policy Holder143 GFR 39 Register of Grants to be maintained by the sanctioning 40 Register of Fixed Assets145 GFR 41 Stock Register of consumables such as Stationery, Chemicals, Spare parts 42 Register of Assets of Historical / Artistic 43 Government 44 Furnishing of data regarding Guarantees to Ministry of Rule number of the Rules in GFRs 1963 retained substantiallyunchanged in GFRs to Rule 198(ii)(d), 209(6)(viii) and 212(1) dated 29th March, to Appendix 12 dated 6th June, to Rule 275(4) dated 13th October, 2008161 FormDescriptionPage - 1 INTRODUCTIONRule 1.

7 Short title and commencement :(1)These rules may be called General Financial Rules, 2005.(2)They shall come into force at 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 Officeset 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 primaryunit 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, thePresident or such other authority to which the power is delegated by or under these rules, Delegation ofFinancial Power Rules, 1978 or any other General or special orders issued by the Government of India.

8 (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 theConstitution;(viii) the Constitution means the Constitution of India;(ix) Contingency Fund means the Contingency Fund of India established under the Contingency Fund ofIndia 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 theresponsibility of controlling the incurring of expenditure and/or the collection of revenue. The term shallinclude a Head of Department and also an Administrator;(xi) Department of the Central Government means a Ministry or a Department of the Central Governmentas notified from time to time and includes the Planning Commission, the Department of ParliamentaryAffairs, the President s Secretariat, the Vice-President s Secretariat, the Cabinet Secretariat and the PrimeMinister s Secretariat;(xii) Disbursing Officer means a Head of Office and also any other Gazetted Officer so designated by aDepartment of the Central Government, a Head of Department or an Administrator, to draw bills andmake payments on behalf of the Central Government.

9 The term shall also include a Head of Departmentor 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) anauthority specified in Schedule I of the Delegation of Financial Powers Rules, 1978, and (b) any otherauthority 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 ofFinancial Powers Rules, 1978, and (b) any other authority declared as such under any General or specialorders of the competent authority;(xviii) Local Body means an authority legally entitled or specially empowered by Government to administera 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 theDelegation of Financial Powers Rules, 1978;(xxiii) Public Account means the Public Account of India referred to in Article 266 (2) of the Constitution.

10 (xxiv) Public Works means civil works and irrigation, navigation, embankment and drainage works;2(xxv) reappropriation means the transfer of funds from one primary unit of appropriation to another suchunit;(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 Indiaand includes any Bank acting as the agent of the Reserve Bank of India in accordance with the provisionsof the Reserve Bank of India Act, 1934 (Act II of 1934);(xxviii) Subordinate authority means a Department of the Central Government or any authority subordinateto the President; and(xxix) Treasury Rules means the Treasury Rules of the Central 3. Interdepartmental Consultations : When the subject of a case concerns more than one department, noorder should be issued until all such departments have concurred, or, failing such concurrence, a decision has beentaken by or under the authority of the Cabinet.