Indian Railway Codes and Manuals-General Financial Rules-2017-Chapter- 3 (III) GFR-2017.

 


Chapter – 3

BUDGET FORMULATION AND IMPLEMENTATION

Rule 42

Financial Year. Financial year of the Government shall commence on the 1st day of April of each year and end on the 31st day of March of the following year.

Rule 43

(1)Presentation of Budget to Parliament. In accordance with the provisions of Article 112 (1) of the Constitution, the Finance Minister shall arrange to lay before both the Houses of Parliament, an Annual Financial Statement also known as the ‘Budget’ showing the estimated receipts and expenditure of the Central Government in respect of a financial year, before the commencement of that year.

Rule 43

(2) The receipts and expenditure of the Railways being a departmental commercial organization form part of the Government’s receipts and expenditure and are included in the Annual Financial Statement. With the merger of Railway Budget with the General Budget, the Demands for Grants and the Statement of Budget Estimates of Railways shall also be part of the General Budget with effect from 2017-18.

Rule 43

(3) The provisions for preparation, formulation and submission of budget to the Parliament are contained in Articles 112 to 116 of the Constitution of India.

Rule 43

(4) The Ministry of Finance, Budget Division, shall issue guidelines for preparation of budget estimates from time to time. All the Ministries/Departments shall comply in full with these guidelines.

Rule 44

The budget shall contain the following :- (i) Estimates of all revenues expected to be raised during the financial year to which the budget relates ; (ii) Estimates of all expenditure for each programme, scheme and project in that financial year; (iii) Estimates of all interest and debt servicing charges and any repayments on loans in that financial year; (iv) Any other information as may be prescribed.

Rule 45

Receipt Estimates. The detailed estimates of receipts shall be prepared by the estimating authorities separately for each Major Head of Account in the prescribed form. For each Major Head, the estimating authority shall give the break-up of the Minor/Subhead/ Detailed wise estimate along with actuals of the past three years. While doing the head wise classification, it may be ensured that item wise break-up of all major items of tax and non-tax revenues are clearly identified and depicted in the receipt estimates. This is required to highlight all individual items of significance. Any major variation in estimates with reference to past actuals or/and Budget Estimates shall be supported by cogent reasons. The accounting heads under which major tax and non-tax revenues are collected shall be prescribed by the administrative Ministry in consultation with the Budget Division in the Finance Ministry.

Rule 46

Non-Tax Revenues. While the tax revenues, non-debt capital receipts including disinvestments and borrowings are managed by the various Departments of the Ministry of Finance, the non-tax revenues are collected through all Ministries/Departments and other autonomous bodies and implementing agencies and comprise an important source of revenue for the Government.

Rule 47

User Charges. ‘User Charges’ is an important component of the non-tax revenues. Each Ministry/Department may undertake an exercise to identify the ‘user charges’ levied by it and publish the same on its website. (i) While fixing the rates of user charges, the Ministries/Departments must ensure that the user charges recover the current cost of providing services with reasonable return on capital investment. (ii) Any deviation from these principles shall be specifically recorded with reasons justifying the setting of user charges lower than the cost recovery norms, if any. (iii) The rates of user charges should be linked with appropriate price indices and reviewed at least every three years. (iv) In order to enable ease of revision of user charges, the rate of user charges shall be fixed, whereever possible through Rules or executive orders and not through a statute.

Rule 48

Dividends and Profits. Dividends and profits including the transfer of surplus from Reserve Bank of India is a major component of the non-tax revenues. The payment of dividends/profits etc. by the Central Public Sector Enterprises shall not be delayed and must be paid within an appropriate time frame immediately after the decision on dividend is taken in the AGM. Ministries or Departments shall monitor timely payments of dividends and profits. The dividend shall be payable as per the guidelines issued by DIPAM in this regards.

Rule 49

Receipts Portal. The Government has provided a public portal for online collection of various non-tax revenues including various fees and user charges through eReceipts. All Ministries/Departments,shall take prompt measures for migration to eReceipts, to ensure customer convenience and immediate credit of receipts to the Government account.

Rule 50

(1) Expenditure estimates. The expenditure estimates shall show separately the sums required to meet the expenditure Charged on the Consolidated Fund under Article 112 (3) of the Constitution and sums required to meet other expenditure for which a vote of the Lok Sabha is required under Article 113(2) of the Constitution.

Rule 50

(2) The estimates shall also distinguish provisions for expenditure on revenue account from capital account, including on loans by the Government and for repayment of loans, treasury bills, cash management bills and ways and means advances.

Rule 50

(3) The detailed estimates of expenditure shall be prepared by the estimating authorities up to the final unit of appropriation (Object head) under the prescribed Major and Minor Heads of Accounts for both Revenue and Capital expenditure. Estimates shall include suitable provision for liabilities of the previous years that is to be discharged during the year.

Rule 50

(4) The estimates of scheme related and other expenditures shall be processed in consultation with the Budget Division, Ministry of Finance in accordance with the instructions issued by it. Rule 50 (5) The Revised and Budget Estimates of both Revenue and Capital expenditure after being scrutinized by the Financial Advisers and approved by the Secretary of the Administrative Ministry or Department concerned shall be forwarded to the Budget Division in the Ministry of Finance in such manner and forms as may be prescribed by it from time to time.

Rule 51

(1) Demands for Grants. The estimates for expenditure for which vote of Lok Sabha is required shall be in the form of Demand for Grants.

Rule 51

(2) Generally, one Demand for Grant is presented in respect of each Ministry or Department. However, in respect of large Ministries or Departments, more than one Demand may be presented. Each Demand normally includes provisions required for a service, i.e. provisions on account of revenue expenditure, capital expenditure, grants to the State and Union Territory Governments and also Loans and Advances relating to the service.

Rule 51

(3) The Demand for Grants shall be presented to Parliament at two levels. The main Demand for Grants shall be presented to Parliament by the Ministry of Finance, Budget Division along with the Annual Financial Statement while the Detailed Demands for Grants, for consideration by the “Departmentally Related Standing Committee” (DRSC) of the Parliament, are laid on the Table of the Lok Sabha by the concerned Ministries/ Departments, as per dates approved from time to time.

Rule 52

(1) Form of Annual Financial Statement and Demands for Grant. The form of the Annual Financial Statement and Demands for Grants shall be laid down by the Finance Ministry and no alteration of arrangement or classification shall be made without the approval of that Ministry.

Rule 52

(2) The heads under which provision for expenditure shall be made in the Demands for Grants or Appropriation shall be prescribed by the Finance Ministry in consultation with the Administrative Ministry or Department. The authorized heads for expenditure in a year shall be as shown in the Detailed Demands for Grants passed by Parliament and no change shall be made therein without the formal approval of the Finance Ministry.

Rule 52

(3) The major head wise provisions in the Detailed Demands for Grants shall match with the provision made in the Demands for Grants presented by Budget Division, as the appropriations are sought on the basis of Demands for Grants. NOTE: Detailed instructions for preparation of the budget are available in Appendix 2, 3 and 4.

Rule 53

(1) Acceptance and inclusion of estimates. The estimates of receipts and expenditure of each Ministry/Department shall be scrutinized in the Budget Division of the Ministry of Finance. Secretary (Expenditure) may hold meetings with Secretaries or Financial Advisers of Administrative Ministries or Departments to discuss the totality of the requirements of funds for various programmes and schemes, along with receipts of the Ministries or Departments.

Rule 53

(2) The estimates initially submitted by the Departments may undergo some changes as a result of scrutiny in the Budget Division, Ministry of Finance and deliberations in the pre-budget meetings between the Secretary (Expenditure) and the Secretary or Financial Adviser of the Department concerned. The final estimates arrived at on the basis of scrutiny and pre-budget meetings shall be incorporated in the Budget documents.

Rule 54

Outcome Budget. After finalization of the estimates for budgetary allocations, the Department of Expenditure in consultation with NITI Aayog and the concerned Ministries shall prepare an Outcome Budget statement linking outlays against each scheme/project with the outputs/deliverables and medium term outcomes. The outputs/deliverables s h a l l b e m a n d a t o r i l y g i v e n i n measurable/quantitative terms on the basis of parameters and deliverables decided in advance, on the basis of projections made in the Medium Term Expenditure Framework (MTEF) Statement. Allocations for each scheme/project shall be against a firm set of deliverables which shall be adhered to. The performance against specified outcomes would form the basis of deciding on the continuation of the scheme and the quantum of budget allocation.

Rule 55

Vote on Account. If the Appropriation Bill seeking authorization of the Parliament to make expenditure in consonance with the Budget proposal is likely to be passed after the start of the financial year to which it corresponds then pending the completion of the procedure prescribed in Article 113 of the Constitution for the passing of the Budget, the Finance Ministry may need to obtain a ‘Vote on Account’ to cover expenditure for abrief period in accordance with the provisions of Article 116 of the Constitution. Funds made available under Vote on Account are not to be utilized for expenditure on a ‘New Service’.

Rule 56

Communication and distribution of grants and appropriations. After the Appropriation Bill relating to Budget is passed, the Ministry of Finance shall communicate the same to the Ministries / Departments which, in turn, shall distribute the same to their subordinate formations. The distribution so made shall also be communicated to the respective Pay and Accounts Officers who shall exercise check against the allocation to each subordinate authority.

II. CONTROL OF EXPENDITURE AGAINST BUDGET

Rule 57(1)

Responsibility for control of Expenditure. The Departments of the Central Government shall be responsible for the control of expenditure against the sanctioned grants and appropriations placed at their disposal. The control shall be exercised through the Heads of Departments and other Controlling Officers, if any, and Disbursing Officers subordinate to them.

Rule 57(2)

A Grant or Appropriation can be utilised only to cover the charges (including liabilities, if any, of the past year) which are to be paid during the financial year of the Grant or Appropriation and adjusted in the account of the year. No charges against a Grant or Appropriation can be authorized after the expiry of the financial year.

Rule 57(3)

No expenditure shall be incurred which may have the effect of exceeding the total grant or appropriation authorized by Parliament by law for a financial year, except after obtaining a supplementary grant or appropriation or an advance from the Contingency Fund. Since voted and charged portions as also the revenue and capital sections of a Grant/Appropriation are distinct and re-appropriation inter se is not permissible, an excess in any one portion or section is treated as an excess in the Grant/Appropriation.

Rule 57(4)

To have effective control over expenditure by the Departments, Controlling and Disbursing Officers subordinate to them shall follow the procedure as given below :- (i) For drawal of money the Drawing and Disbursing Officer shall (a) Prepare and present bills for “charged” and “voted” expenditure separately. (b) Enter on each bill the complete accounts classifications from major head down to the object head of account. When a single bill includes charges falling under two or more object heads, the charges shall be distributed accurately over the respective heads. (c) Enter on each bill the progressive total of expenditure up-to-date under the primary unit of appropriation to which the bill relates, including the amount of the bill on which the entry is made. (ii) All drawing and disbursing officers shall maintain separate registers in Form GFR 5, physically or electronically for allocation under each minor or sub-head of account with which they are concerned. (iii) On the third day of each month, a copy of the entries made in this register during the preceding month shall be sent by the officer maintaining it, to the Head of the Department or other designated Controlling Officer. This statement shall also include adjustment of an inward claim, etc., communicated by Pay and Accounts Officer directly to the DDO (and not to his Grant Controlling Officer). If there are no entries in the register in any month, a ‘nil’ statement shall be sent. (iv) The Controlling Officer will maintain a broadsheet in Form GFR 6 to monitor the receipt of the return prescribed in the foregoing subclause (v). On receipt of the returns from Disbursing Officers, the Controlling Officer shall examine them and satisfy himself :- (a) that the accounts classification has been properly given; (b) that progressive expenditure has been properly noted and the available balances worked out correctly; (c) that expenditure up-to-date is within the grant or appropriation; and (d) that the returns have been signed by Disbursing Officers. Where the Controlling Officer finds defects in any of these respects, he shall take steps to rectify the defect. (vi) When all the returns from the Disbursing Officers for a particular month have been received and found to be in order, the Controlling Officer shall compile a statement in Form GFR 7, in which he shall incorporate - (a) the totals of the figures supplied by Disbursing Officers; (b) the totals taken from his own registers in Form GFR 5; (c) the totals of such adjustments under the various detailed heads as communicated to him by the Accounts Officer on account of transfer entries and expenditure debited to the grant as a result of settlement of inward account claims and not reckoned by his DDOs. (vii). If any adjustment communicated by the Accounts Officer affects the appropriation at the disposal of a subordinate Disbursing Officer, the fact that the adjustment has been made shall be communicated by the Controlling Officer to the Disbursing Officer concerned. (viii). On receipt of all the necessary returns, the Head of the Department shall prepare a consolidated account in Form GFR 8, showing the complete expenditure from the grant or appropriation at his disposal upto the end of the preceding month. Rule 57 (5) The Head of the Department and the Accounts Officer shall be jointly responsible for the monthly reconciliation of the figures given in the accounts maintained by the Head of the Department with those appearing in the Accounts Officer’s books. The procedure for reconciliation shall be as follows :- (I). DDOs shall maintain a Bill Register in Form TR 28-A, and note all bills presented for payment to the PAO in the register. As soon as cheques for the bills presented for payment are received, and/or status of e-payments are verified from the reports available with DDO on PFMS portal these shall be noted in the appropriate column of the Bill Register and the DDOs shall ensure that the amounts of cheques tally with the net amount of the bills presented. In case any retrenchment is made by the PAO, a note of such retrenchments shall be kept against the bill in the remarks column in TR 28-A. (ii) The PAOs shall furnish to each of the DDOs including Cheque –drawing DDOs, an extract from the expenditure control register or from the Compilation Sheet every month indicating the expenditure relating to grants controlled by him classified under the various major-minor detailed head of accounts. The statements for May to March shall also contain Progressive Figures. (iii). On receipt of these extracts from the PAOs, the DDOs shall tally the figures r e c e i v e d , e x c l u d i n g b o o k adjustments, with the expenditure worked out for the month in the GFR 5 register. Discrepancies, if any, between the two sets of figures shall be promptly investigated by the DDO in consultation with the PAO. He shall also note in the GFR 5 register particulars of book adjustments advised by the PAO through the monthly statement. Thereafter, the DDO shall furnish to the PAO a certificate of agreement of the figures as per his books with those indicated by the PAOs by the last day of the month following the month of accounts. (iv). The Principal Accounts Officer (or PAO wherever payments, relating to a grant are handled wholly by a PAO) of each Ministry, shall send a monthly statement showing the expenditure vis-à-vis the Budget provision under the various heads of accounts, in the prescribed pro forma, to the Heads of Departments responsible for overall control of expenditure against grant of the Ministry as a whole. The figures so communicated by the Principal Accounts Officer (or the PAO concerned) shall be compared by the Heads of Departments with those consolidated in Form GFR 8 and differences, if any, shall be taken up by the Heads of Departments with the Principal Accounts Officers (or the PAO concerned) for reconciliation. The Head of the Department shall furnish a quarterly certificate to the Principal Accounts Officer certifying the correctness of the figures for the quarter by the 15th of the second following month after the end of quarters April-June, July-September, October-December and JanuaryMarch. Rule 57 (6) The Departments of the Central Government shall obtain from their Heads of Departments and other offices under them the departmental figures of expenditure in Form GFR 8 by the 15th of the month following the month to which the returns relate. The figures relating to Revenue and Capital expenditure shall be separately shown in these returns. The information so obtained shall be posted in register(s) kept for watching the flow of expenditure against the sanctioned grant or appropriation. Progressive totals of expenditure shall be worked out for the purpose. If the departmental figures obtained in Form GFR 8 and posted in the register(s), require correction in a subsequent month, Heads of Departments or other offices shall make such corrections by making plus or minus entries in the progressive totals. In case the Accounts Office figures which subsequently become available are found to be higher than departmental figures, the former shall be assumed to be the correct figures, as appropriation accounts are prepared on the basis of the figures booked in the accounts. Rule 57 (7) The Departments of Central Government shall also obtain from the Heads of Departments and other authorities under them, statements showing the details of the physical progress of the schemes for which they are responsible. This statement shall show the name of the scheme, the Budget provision for each scheme, the progressive expenditure on each scheme, the progress of the scheme in physical terms and the detailed reasons for any shortfalls or excess, both against physical and financial targets. Rule 57 (8) A Broadsheet in Form GFR 9 shall be maintained by the Departments of Central Government or each Head of Department and other authorities directly under them, to watch the prompt receipt of the various returns mentioned above from month to month and to take necessary measures for rectifying any defaults noticed.

Rule 58

Maintenance of Liability Register for effecting proper control over expenditure. In order to maintain proper control over expenditure, a Controlling Officer shall obtain from the spending authorities liability statements in Form GFR 3- A every month, starting from the month of October in each financial year. The Controlling Officer shall also maintain a Liability Register in Form GFR 3.

Rule 59 Personal attention of the Head of Department /Controlling Officer required to estimate savings or excesses. A Head of Department or Controlling Officer shall be in a position to estimate the likelihood of savings or excesses every month and to regularize them in accordance with the instructions laid down in Rule 62.

Rule 60 Control of expenditure against grant/appropriation and ultimate responsibility of the authority administering it. The Accounts Officer shall report to the Head of the Department concerned immediately on the first appearance of any disproportionate expenditure, particularly in respect of recurring items of expenditure under any grant or appropriation or a primary unit of appropriation thereof. However, the authority administering a grant/ appropriation is ultimately responsible for the control of expenditure against the grant/appropriation and not the Accounts Officer.

Rule 61 Excess Expenditure. 1. The Accounts Officer shall not allow any payment against sanctions in excess of the Budget provisions unless there is specific approval of the Chief Accounting Authority. 2. The Financial Advisers and Chief Accounting Authority, before according concurrence for excess under any Head, shall ensure availability of funds through Reappropriation/ Supplementary D e m a n d s f o r G r a n t s . (Refer Appendix 10)

Rule 62 (1) Surrender of savings. Departments of the Central Government shall surrender to the Finance Ministry, by the dates prescribed by that Ministry before the close of the financial year, all the anticipated savings noticed in the Grants or Appropriations controlled by them. The Finance Ministry shall communicate the acceptance of such surrenders as are accepted by it to the Accounts Officer, before the close of the year. The funds provided during the financial year and not utilized before the close of that financial year shall stand lapsed at the close of the financial year.

Rule 62 (2) The savings as well as provisions that cannot be profitably utilised shall be surrendered to Government immediately they are foreseen without waiting till the end of the year. No savings shall be held in reserve for possible future excesses.

Rule 62 (3) Rush of expenditure, particularly in the closing months of the Financial year, shall be regarded as a breach of financial propriety and shall be avoided. The Financial Advisers of the Ministries/Departments shall ensure adherence to the stipulated Monthly Expenditure Plan and the guidelines issued in this regard by the Budget Division, Department of Economic Affairs, from time to time.

Rule 62 (4) The Financial Advisers of the Ministries/ Departments shall ensure adherence to the stipulated Quarterly Expenditure Plan and the guidelines issued in this regard by Ministry of Finance from time to time.

Rule 63

Expenditure on New Service. No expenditure shall be incurred during a financial year on a “New Service” not contemplated in the Annual Budget for the year except after obtaining a supplementary grant or appropriation or an advance from the Contingency Fund during that year. The guidelines to determine cases of “New Service”/”New Instrument of Service” are contained in Annexure-1 to Appendix -3.

Rule64

(1) Additional Allotment for excess expenditure. A subordinate authority incurring the expenditure shall be responsible for seeing that the allotment placed at its disposal is not exceeded. Where any excess over the allotment is apprehended, the subordinate authority shall obtain additional allotment before incurring the excess expenditure. For this purpose, the authorities incurring expenditure shall maintain a ‘Liability Register’ in Form GFR 3.

Rule 64

(2) A Disbursing Officer may not, on his own authority, authorize any payment in excess of the funds placed at his disposal. If the Disbursing Officer is called upon to honour a claim, which is certain to produce an excess over the allotment or appropriation at his disposal, he shall take the orders of the administrative authority to which he is subordinate before authorizing payment of the claim in question. The administrative authority shall then arrange to provide funds either by reappropriation or by obtaining a Supplementary Grant or Appropriation or an advance from the Contingency Fund. Instructions contained in Note below Appendix 10 may also be kept in view.

Rule 65

(1) Re-appropriation of Funds. Subject to the provisions of Rule 10 of the Delegation of Financial Powers Rules, and also subject to such other general or specific restrictions as may be imposed by the Finance Ministry in this behalf, re-appropriation of funds from one primary unit of appropriation to another such unit within a grant or appropriation, may be sanctioned by a competent authority at any time before the close of the financial year to which such grant or appropriation relates. The Primary unit in this regard shall be the final unit of appropriation i.e. the Object head of account.

Rule 65

(2) Re-appropriation of funds shall be made only when it is known or anticipated that the appropriation for the unit from which funds are to be transferred shall not be utilized in full or that savings can be effected in the appropriation for the said unit.

Rule 65

(3) Funds shall not be re-appropriated from a unit with the intention of restoring the diverted appropriation to that unit when savings become available under other units later in the year.

Rule 65

(4) An application for re-appropriation of funds shall ordinarily be supported by a statement in Form GFR 1 or any other special form authorized by departmental regulations showing how the excess is proposed to be met. In all orders, sanctioning reappropriation, the reasons for saving and excess of Rupees 1 lakh or over and the primary units (secondary units, wherever necessary), affected shall be invariably stated. The authority sanctioning the reappropriation shall endorse a copy of the order to the Accounts Officer.

Rule 66

Supplementary Grants. If savings are not available within the Grant to which the payment is required to be debited, or if the expenditure is on “New Service” or “New nstrument of Service” not provided in the budget, necessary Supplementary Grant or Appropriation in accordance with Article 115 (1) of the Constitution shall be obtained before payment is authorized (Refer to Appendix 5).

Rule 67

(1) Advance from Contingency Fund. When a need arises to incur unforeseen expenditure in excess of the sanctioned grant or appropriation or on a new service not provided in Budget and there is not sufficient time for the voting of the Supplementary Demand and the passing of the connected appropriation bill before close of the financial year, an advance from the Contingency Fund set up under Article 267 (1) of the Constitution shall be obtained before incurring the expenditure.

Rule 67

(2) An advance from the Contingency Fund shall also be obtained to meet expenditure in excess of the provisions for the service included in an Appropriation (Vote on Account) Act.

Rule 67

(3) The application for an advance from the Contingency Fund shall indicate inter alia the particulars of the additional expenditure involved and the sanction to the advance has also to indicate the sub-head and the primary unit of the Grant to which the expenditure appropriately relates. In case, however, any difficulty is felt, the matter shall be referred to the Finance Ministry for clarification. Rule

67

(4) The procedure for obtaining an advance from the Contingency Fund and recoupment of the Fund shall be as laid down in the Contingency Fund of India Rules, 1952, as amended from time to time. For ready reference, rules have been placed at Appendix - 6 to this volume.

Rule 68

Inevitable Payments. (i) Subject to the provisions of Article 114 (3) of the Constitution, money indisputably payable by Government shall not ordinarily be left unpaid. (ii) Suitable provision for anticipated liabilities shall invariably be made in Demands for Grants to be placed before Parliament.

Rule 69

For easy reference an extract relating to procedures followed in the Accounts Office for check against provision of funds as a part of pre-check of bills has been placed at Appendix 10.

Rule 70

Duties and Responsibilities of the Chief Accounting Authority. The Secretary of a Ministry/Department who is the Chief Accounting Authority of the Ministry/ Department shall: — (i) be responsible and accountable for financial management of his Ministry or Department. (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 costeffective 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.

Multiple choice questions:

1. According to Rule 42, when does the financial year of the Government commence and end?

(a) 1st January to 31st December

(b) 1st April to 31st March

(c) 1st July to 30th June

(d) 1st October to 30th September

Answer: (b) 1st April to 31st March


2. Which Article of the Constitution requires the Finance Minister to present an Annual Financial Statement before Parliament?

(a) Article 110

(b) Article 112

(c) Article 113

(d) Article 115

Answer: (b) Article 112


3. With effect from which financial year was the Railway Budget merged with the General Budget?

(a) 2015-16

(b) 2016-17

(c) 2017-18

(d) 2018-19

Answer: (c) 2017-18


4. What does the Annual Financial Statement, also known as the Budget, show?

(a) Estimated receipts and expenditures of the State Governments

(b) Estimated receipts and expenditures of the Central Government

(c) Only the expenditure of the Central Government

(d) Only the receipts of the Central Government

Answer: (b) Estimated receipts and expenditures of the Central Government


5. Which Ministry issues guidelines for the preparation of budget estimates?

(a) Ministry of Home Affairs

(b) Ministry of External Affairs

(c) Ministry of Finance, Budget Division

(d) Ministry of Commerce and Industry

Answer: (c) Ministry of Finance, Budget Division


6. What must the budget estimates include according to Rule 44?

(a) Estimates of only tax revenues

(b) Estimates of all revenues, expenditures, interest, debt servicing charges, and any other prescribed information

(c) Estimates of only capital expenditures

(d) Estimates of only non-tax revenues

Answer: (b) Estimates of all revenues, expenditures, interest, debt servicing charges, and any other prescribed information


7. Which authority is responsible for preparing the detailed estimates of receipts?

(a) Ministry of Finance

(b) Administrative Ministries

(c) Estimating authorities

(d) Reserve Bank of India

Answer: (c) Estimating authorities


8. What is the importance of ‘User Charges’ in the context of non-tax revenues?

(a) They are a minor source of revenue

(b) They are to be set below the cost of providing services

(c) They are an important component of non-tax revenues and must cover the cost of services

(d) They are fixed by the Parliament through statutes

Answer: (c) They are an important component of non-tax revenues and must cover the cost of services


9. What is required for fixing the rates of ‘User Charges’?

(a) They must be fixed through statutes only

(b) They must ensure cost recovery with a reasonable return on capital investment

(c) They should be reviewed every ten years

(d) They must be fixed by the Finance Ministry alone

Answer: (b) They must ensure cost recovery with a reasonable return on capital investment


10. According to Rule 49, what measure must all Ministries/Departments take regarding non-tax revenues?

(a) Collect non-tax revenues in cash only

(b) Publish non-tax revenues on a public portal

(c) Ensure migration to eReceipts for online collection of non-tax revenues

(d) Set user charges without consulting the Budget Division

Answer: (c) Ensure migration to eReceipts for online collection of non-tax revenues


11. Under Rule 50, how must the expenditure estimates be shown?

(a) As a single consolidated amount

(b) Separately for sums required to meet expenditure charged on the Consolidated Fund and for sums requiring a vote of the Lok Sabha

(c) Only for revenue expenditure

(d) Only for capital expenditure

Answer: (b) Separately for sums required to meet expenditure charged on the Consolidated Fund and for sums requiring a vote of the Lok Sabha


12. What is included in the Demand for Grants as per Rule 51?

(a) Only revenue expenditure

(b) Only capital expenditure

(c) Provisions on account of revenue expenditure, capital expenditure, grants to State and Union Territory Governments, and Loans and Advances

(d) Only grants to State and Union Territory Governments

Answer: (c) Provisions on account of revenue expenditure, capital expenditure, grants to State and Union Territory Governments, and Loans and Advances


13. Which rule outlines the guidelines for the acceptance and inclusion of estimates in the Budget?

(a) Rule 42

(b) Rule 50

(c) Rule 53

(d) Rule 55

Answer: (c) Rule 53


14. What is the purpose of the Outcome Budget as stated in Rule 54?

(a) To provide a detailed account of past expenditures

(b) To link outlays against each scheme/project with outputs/deliverables and medium-term outcomes

(c) To only estimate future non-tax revenues

(d) To determine the financial year's start and end dates

Answer: (b) To link outlays against each scheme/project with outputs/deliverables and medium-term outcomes


15. Under Rule 55, what is a ‘Vote on Account’ used for?

(a) To authorize the complete annual budget before the financial year starts

(b) To cover expenditure for a brief period if the Appropriation Bill is delayed

(c) To replace the annual budget process

(d) To fund new services for the financial year

Answer: (b) To cover expenditure for a brief period if the Appropriation Bill is delayed

16. Who is responsible for controlling expenditure against the sanctioned grants and appropriations?

  • a) Finance Ministry
  • b) Department of Revenue
  • c) Departments of the Central Government
  • d) Parliament

Answer: c) Departments of the Central Government

17. What is the limitation on the use of a Grant or Appropriation as per Rule 57(2)?

  • a) It can be used for charges of the current year only.
  • b) It can be used for charges of the past and next financial year.
  • c) It can be used for charges of any future financial year.
  • d) It can be used indefinitely.

Answer: a) It can be used for charges of the current year only.

18. Which of the following is NOT allowed without obtaining a supplementary grant or appropriation?

  • a) Incurring expenditure that exceeds the total grant or appropriation authorized by Parliament.
  • b) Utilizing a grant for past year liabilities.
  • c) Spending under revenue account.
  • d) Making payments for capital expenditures.

Answer: a) Incurring expenditure that exceeds the total grant or appropriation authorized by Parliament.

19. What must a Drawing and Disbursing Officer (DDO) enter on each bill as per Rule 57(4)(i)(b)?

  • a) The total amount allocated for the year
  • b) The complete accounts classifications from major head down to the object head of account
  • c) The date of payment
  • d) The details of previous payments

Answer: b) The complete accounts classifications from major head down to the object head of account

20. In which form should all drawing and disbursing officers maintain separate registers?

  • a) Form GFR 8
  • b) Form GFR 6
  • c) Form GFR 5
  • d) Form GFR 7

Answer: c) Form GFR 5

21. Which of the following statements should the Controlling Officer compile after receiving all returns from Disbursing Officers?

  • a) A statement in Form GFR 8
  • b) A broadsheet in Form GFR 6
  • c) A statement in Form GFR 7
  • d) A summary in Form TR 28-A

Answer: c) A statement in Form GFR 7

22. What is the purpose of the Bill Register maintained by DDOs in Form TR 28-A?

  • a) To track receipts of grants
  • b) To note all bills presented for payment and track cheques received
  • c) To keep records of non-tax revenue
  • d) To reconcile figures with the Budget Division

Answer: b) To note all bills presented for payment and track cheques received

23. By when should the Head of the Department furnish a quarterly certificate to the Principal Accounts Officer certifying the correctness of figures?

  • a) By the last day of the month following the quarter
  • b) By the 15th of the second following month after the end of quarters
  • c) By the 1st of the next quarter
  • d) By the end of the financial year

Answer: b) By the 15th of the second following month after the end of quarters

24. What form is used by the Departments of the Central Government to obtain departmental figures of expenditure?

  • a) Form GFR 8
  • b) Form GFR 6
  • c) Form GFR 5
  • d) Form GFR 7

Answer: a) Form GFR 8

25. Which form should be maintained by the Departments of Central Government to track the prompt receipt of various returns?

  • a) Form GFR 5
  • b) Form GFR 7
  • c) Form GFR 8
  • d) Form GFR 9

Answer: d) Form GFR 9

Would you like to continue with more questions?

26. Which form should be used by the Controlling Officer to maintain the Liability Register for effecting proper control over expenditure?
a) Form GFR 5
b) Form GFR 3
c) Form GFR 6
d) Form GFR 8
Answer: b) Form GFR 3

27. When should the Controlling Officer start obtaining liability statements from the spending authorities?
a) From the beginning of the financial year
b) From the month of October in each financial year
c) From the end of the financial year
d) From the month of January in each financial year
Answer: b) From the month of October in each financial year

28. Who is ultimately responsible for the control of expenditure against a grant or appropriation?
a) Accounts Officer
b) Financial Adviser
c) Chief Accounting Authority
d) Authority administering the grant/appropriation
Answer: d) Authority administering the grant/appropriation

29. What action should be taken if savings or provisions that cannot be profitably utilized are foreseen?
a) Hold the savings in reserve for future excesses
b) Surrender them to the government immediately
c) Re-appropriate the funds
d) Wait until the end of the financial year
Answer: b) Surrender them to the government immediately

30. According to Rule 62(3), what is regarded as a breach of financial propriety?
a) Re-appropriation of funds
b) Rush of expenditure, particularly in the closing months of the financial year
c) Maintenance of Liability Register
d) Excess expenditure without approval
Answer: b) Rush of expenditure, particularly in the closing months of the financial year

31. What is required before incurring expenditure on a "New Service" not contemplated in the Annual Budget?
a) Re-appropriation of funds
b) Supplementary grant or appropriation or an advance from the Contingency Fund
c) Surrender of savings
d) Liability statement
Answer: b) Supplementary grant or appropriation or an advance from the Contingency Fund

32. Which form is ordinarily used to support an application for re-appropriation of funds?
a) Form GFR 1
b) Form GFR 3
c) Form GFR 5
d) Form GFR 8
Answer: a) Form GFR 1

33. Under which Article of the Constitution is an advance from the Contingency Fund set up?
a) Article 115(1)
b) Article 114(3)
c) Article 267(1)
d) Article 280
Answer: c) Article 267(1)

34. What is the Secretary of a Ministry/Department responsible for as the Chief Accounting Authority?
a) Ensuring that public funds are used for their intended purpose
b) Appearing before the Committee on Public Accounts
c) Reviewing and monitoring program performance
d) All of the above
Answer: d) All of the above

35. Which of the following is NOT a responsibility of the Chief Accounting Authority?
a) Preparation of expenditure and other financial statements
b) Collection of all moneys due to the Government
c) Ensuring adherence to government procurement procedures
d) Allocation of grants and appropriations
Answer: d) Allocation of grants and appropriations

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