GENERAL FINANCIAL RULES 2017

CHAPTER - 2
1. GENERAL PRINCIPLES RELATING TO EXPENDITURE AND PAYMENT OF MONEY
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.

Rule 22
Expenditure from Public Funds. No authority may incur any expenditure or enter into any liability
involving expenditure or transfer of moneys for investment or deposit from public funds
(Consolidated Fund / Contingency Fund and the Public Accounts) unless the same has been
sanctioned by a competent authority
Rule 23
Delegation of Financial Powers. The financial powers of the Government have been delegated to
various subordinate authorities vide Delegation of Financial Powers Rules as amended from time to
time. The financial powers of the Government, which have not been delegated to a subordinate
authority, shall vest in the Finance Ministry.
Rule 24
Consultation with Financial Advisers. All draft memoranda for Expenditure Finance Committee or
Public Investment Bureau or Committee on Establishment Expenditure and Cabinet Committee for
Economic Affairs or Cabinet shall be circulated by the Ministry or Department concerned after
consultation with the concerned Financial Adviser of the Ministry or Department. A confirmation to
this effect shall be included in the draft memorandum at the circulation stage.
Rule 25
(1) Provision of funds for sanction. All sanctions to the expenditure shall indicate the details of the
provisions in the relevant grant or appropriation wherefrom such expenditure is to be met.
Rule 25
(2) All proposals for sanction to expenditure, shall indicate whether such expenditure can be met by
valid appropriation or re- appropriation.
Rule 25
(3) In cases where it becomes necessary to issue a sanction to expenditure before funds are
communicated, the sanction should specify that such expenditure is subjected to funds being
communicated in the budget of the year.
Rule 26
Responsibility of Controlling Officer in respect of Budget allocation. The duties and
responsibilities of a controlling officer in respect of funds placed at his disposal are to ensure:
(i) that the expenditure does not exceed the budget allocation.
(ii) that the expenditure is incurred for the purpose for which funds have been provided.
(iii) that the expenditure is incurred in public interest.
(iv) that adequate control mechanism is functioning in his Department for prevention,
detection of errors and irregularities in the financial proceedings of his subordinate offices
and to guard against waste and loss of public money,
Rule 27
(1) Date of effect of sanction. Subject to fulfilment of the provisions as contained in the Delegation
of Financial Powers Rules, all rules, sanctions or orders shall come into force from the date of issue
unless any other date from which they shall come into force is specified therein.
Rule 27
(2) Date of creation to be indicated in sanctions for temporary posts. Orders sanctioning the
creation of a temporary post should, in addition to the sanctioned duration, invariably specify the
date from which it is to be created
Rule 28
Powers in regard to certain special matters. — Except in pursuance of the general delegation made
by, or with the approval of the President, a subordinate authority shall not, without the previous
consent of the Finance Ministry, issue an order which -
(i) involves any grant of land, or assignment of revenue, or concession, grant, lease or
licence of mineral or forest rights, or rights to water, power or any easement or privilege
of such concessions, or
(ii) involves relinquishment of revenue in any way

Rule 29
Procedure for communication of sanctions. All financial sanctions and orders issued by a
competent authority shall be communicated to the Audit Officer and the Accounts Officer. The
procedure to be followed for communication of financial sanctions and orders will be as under :-
(i) All financial sanctions issued by a Department of the Central Government which relate to
a matter concerning the Department proper and on the basis of which payment is to be
made or authorized by the Accounts Officer, should be addressed to him.
(ii) All other sanctions should be accorded in the form of an Order, which need not be
addressed to any authority, but a copy thereof should be endorsed to the Accounts Officer
concerned.
(iii) In the case of non-recurring contingent and miscellaneous expenditure, the sanctioning
authority may, where required, accord sanction by signing or countersigning the bill or
voucher, whether before or after the money is drawn, instead of by a separate sanction.
(iv) All financial sanctions and orders issued by a Department of the Central Government
with the concurrence of the Internal Finance Wing or Finance Ministry, as applicable,
should be communicated to the Accounts Officer in accordance with the procedure laid
down in the Delegation of Financial Powers Rules, and orders issued thereunder from
time to time.
(v) All financial sanctions and orders issued by a Department with the concurrence of the
Ministry of Home Affairs or Comptroller and Auditor General of India or Department of
Personnel should specify that the sanction or orders are issued with the concurrence of
that Department along with the number and date of relevant communication of that
Department wherein the concurrence was conveyed.
(vi) All orders conveying sanctions to expenditure of a definite amount or upto a specific limit
should express both in words and figures the amount of expenditure sanctioned.
(vii) Sanctions accorded by a Head of Department may be communicated to the Accounts
Officer by an authorized Gazetted Officer of his Office duly signed by him for the Head
of Department or conveyed in the name of the Head of the Department.
(viii) All orders conveying sanctions to the grant of additions to pay such as Special
Allowance, Personal Pay, etc., should contain a brief summary of the reasons for the grant
of such additions to pay so as to enable the Accounts Officer to see that it is correctly
termed as Special Allowance, Personal Pay, etc., as the case may be.
(ix) Orders issued by a Department of a Union Territory Government where Audit and
Accounts (a) have not been separated shall be communicated direct to the Audit
authority; (b) have been separated, copies shall be endorsed to the Audit authorities.
In case of sanctions in respect of matters, where reference was made to the Central
Government under the Rules of Business framed under Section 46 of the Government of
Union Territory Act, 1963, the following clause shall be added in the sanction endorsed to
Audit: -
“A reference had been made in this case to the Central Government and the above
order/letter conforms to the decision of the Central Government vide Government of
India, Ministry/Department of Letter No…………dated…………..”.
(x) Copies of all General Financial Orders issued by a Department of the Central
Government with the concurrence of the Comptroller and Auditor General of India shall
be supplied to the Comptroller and Auditor General of India.
(xi) Copies of all sanctions or orders other than the following types should be endorsed to the
Audit Officers:-
(a) Sanctions relating to grant to advances to Central Government employees.
 (b)Sanctions relating to appointment or promotion or transfer of Gazetted and
non- Gazetted Officers.
(c) All sanctions relating to creation or continuation or abolition of posts.
(d) Sanctions for handing over charge and taking over charge, etc.
(e) Sanctions relating to payment or withdrawal of General Provident Fund
advances to Government servants.
(f) Sanction of contingent expenditure incurred under the powers of Head of
Offices.
(g) Other sanctions of routine nature issued by Heads of Subordinate Officers
(other than those issued by Ministries or Departments proper and under
powers of a Head of Department).
(xii) Sanctions accorded by competent authority to grants of land and alienation of land
revenue, other than those in which assignments of land revenue are treated as cash
payment, shall be communicated to the Audit and/ or the Accounts Officer, as the case
may be, in a consolidated monthly return giving the necessary details.

Rule 30
Lapse of Sanctions. A sanction for any fresh charge shall, unless it is specifically renewed, lapse if
no payment in whole or in part has been made during a period of twelve months from the date of
issue of such sanction. Provided that -
(i) when the period of currency of the sanction is prescribed in the departmental regulations
or is specified in the sanction itself, it shall lapse on the expiry of such periods; or
(ii) when there is a specific provision in a sanction that the expenditure would be met from
the Budget provision of a specified financial year, it shall lapse at the close of that
financial year; or
(iii) in the case of purchase of stores, a sanction shall not lapse, if tenders have been accepted
(in the case of local or direct purchase of stores) or the indent has been placed (in the case
of Central Purchases) on the Central Purchase Organization within the period of one year
of the date of issue of that sanction, even if the actual payment in whole or in part has not
been made during the said period.
Rule 31
Notwithstanding anything contained in Rule 30, a sanction in respect of an addition to a permanent
establishment, made from year to year under a general scheme by a competent authority, or in
respect of an allowance sanctioned for a post or for a class of Government servants, but not drawn by
the officer(s) concerned, shall not lapse.
Rule 32
Remission of disallowances by Audit and writing off of overpayment made to Government
servants. The remission of disallowances by Audit and writing off of overpayments made to
Government servants by competent authorities shall be in accordance with the provisions of the
Delegation of Financial Powers Rules, and instructions issued thereunder.