FINMIN Order : Amendment in Government Accounting Rules, 1990: FinMin issues Draft Revised GAR 2021 for comments

Ministry of Finance
Department of Expenditure
Office of the Controller General of Accounts
Mahalekha Niyantrak Bhawan,

E Block, GPO Complex, INA,
New Delhi-110023

No.Codes-13011/1/2020-Codes-CGA/Cno, 1559/ 170-171

Dated : 20.04.2021

OFFICE MEMORANDUM

Subject: Amendment in Government Accounting Rules, 1990

A committee was constituted in the O/o CGA to suggest amendments in Government Accounting Rules, 1990. The draft Revised Government Accounting Rules proposed by the committee is being mailed separately. You are requested to offer your comments on the draft Rules in a week so that the same could be finalised at an early date.

(A.K. Singh)
Dy. Controller General of Accounts (AR & GBA)

________________________________________

Government Accounting Rules, 2021
(Revised Edition)

Issued by the Ministry of Finance,
Department of Expenditure,
Controller General of Accounts

Preamble.
Rule No.

CHAPTER 1 – INTRODUCTORY

1. Short title and Commencement

2. Definitions

3 Articles of the Constitution etc. to be kept in view in devising the form of accounts

4. Annual Accounts

5. Issue of Subsidiary Instructions

6 Special provision relating to Railways, Posts Telecommunication and Defence Departments

CHAPTER 2 – GENERAL OUTLINES OF THE SYSTEM OF ACCOUNTS

7. Agreement of the Central Government with the Reserve Bank

8. Account of the Central Government with the Ban

9-11. Accounts of State Governments with the Bank

12. State transactions in Central Treasuries

13 Transactions of the other Governments, including Central Government in State Treasuries

14 Broad outlines of the accounts-feeder network and system of accounts of the Central Government and Union Territory Administrations

15 Broad outlines of the accounts-feeder-network and system of accounts of State Governments and of the Union Territory Governments

16. Accounts between different Accounts Offices of the Central Government

17 Authorities responsible for the preparation of Annual Accounts of the Central Government, State and Union Territories Governments

18. Proforma Accounts

19. Journal and Ledger

CHAPTER 3 – BASIC STRUCTURE OF THE FORM OF ACCOUNTS

20. Period of Accounts

21. Cash basis of Accounts

22. Currency in which accounts are kept

23. Form of Accounts—Main Divisions of Accounts

24. Sectors and sub-Sectors of Accounts

25. Allotment of Code to each Major head and range of Code numbers

26. The Classification Structure of Government Account

27. Classification of expenditure as “Charged” or as “Voted”

28. Classification of transactions in accounts

29. Basis of classification

30 Criteria for determining whether expenditure should be classified under heads of Capital Section or Revenue Section of the Consolidated Fund

31 Allocation between Capital and Revenue expenditure on a capital — scheme and Asset Accounting

32 Net Gain or Loss by Exchange in respect of Government transaction in foreign currencies

33 Classification and accounting of transactions pertaining to more than one Major Head of Account

34. Classification aid accounting of transactions relating to Scheduled Areas

35. Classification and accounting of recoveries of overpayments

36. Accounts of Government Commercial Departments or Undertakings

37. Rectification of Misclassifications

38. Criteria for writes off of balances from Debt, Deposit, Suspense and Remittance Heads closed to balance and classification thereof in accounts

CHAPTER 4 – CRITERIA FOR RECOVERY OF CHARGES FOR SERVICES RENDERED OR ARTICLES SUPPLIED BY GOVERNMENT DEPARTMENTS.

39. Introductory

40. Adjustment between Governments

41. Adjustments with Foreign Governments, outside bodies, etc.

42.-50 Inter departmental adjustments

51. General

CHAPTER 5 – CLASSIFICATION OF RECOVERIES OF EXPENDITURE IN GOVERNMENT ACCOUNTS

52. Introductory

53. Classification of recoveries made from non-government parties and other Governments, including Government outside India

54. Classification of recoveries made by one department from another department of the same Government

55. Classification of recoveries of expenditure on works in progress and transactions of stock and other suspense account

56. Classification of receipts and recoveries on Capital Account

CHAPTER 6 – CLASSIFICATION OF LOSSES IN GOVERNMENT ACCOUNTS

57. Introductory

58. Classification of loss etc. of receipts

59. Buildings, Lands, Stores and Equipment

60. Classification of losses or deficiencies of cash in hand whether in treasury or in departmental charge

61. Classification of irregular or unusual payments

62. Classification of Inevitable losses

CHAPTER 7 – MISCELLANEOUS RULES

63. Incidence of certain charges and receipts between Governments

64. Treasury Accounts

65. Departmental Accounts

CHAPTER 8 – IMPORTANT GENERAL ORDERS GOVERNING CLASSIFICATION

66. Pay and Allowances (other than Travelling Allowance) of Government servants

67. Travelling Expenses

68. Contributions made by or to Government

69. Classification of transactions under “Civil Advances”

70. Classification of transactions under “Suspense”

71. Sale-proceeds of Government land and buildings

72. Municipal rates and taxes

73, Cost of Survey of India and other scientific parties accompanying a Military Expedition

74. Interpretation

75. Repeal

APPENDICES

APPENDIX-1 Articles of the Constitution and Sections of the Union Territories Act, 1963 relevant to the Form of Accounts

APPENDIX-2 Organisation of the Controller General of Accounts

APPENDIX-3 Sections 10,11 and 22 of the C. & A.G’s. (Duties, Powers and Conditions of Service) Act, 1971 and orders issued by the President in exercise of the powers conferred by sub-section 1 of Section 10 and first Proviso to Section 11 thereof

APPENDIX-4 Grant-in-aid and loans sanctioned by various Ministries/Departments of the Government of India to State/Union Territory Governments in connection with Central Plan Schemes and Centrally Sponsored Plan Schemes

APPENDIX-5 Principles and Rules regulating the distribution of certain charges and receipts between Governments

GOVERNMENT ACCOUNTING RULES, 1990 (Revised)

Preamble – In exercise of the powers conferred by Article 150 of the Constitution, the President on the advice of the Comptroller and Auditor General, hereby makes the following basic rules relating to the form of accounts of the Union and States. This compilation incorporates also the general principles of Government accounting laid down by the Comptroller and Auditor General for the guidance of Government Departments, namely:-

Chapter 1 – INTRODUCTORY

1. Short Title and Commencement

These rules may be called the “GOVERNMENT ACCOUNTING RULES 2021” and will come into force with effect from 1st April, 2021.

2. Definitions

In these rules, unless the context otherwise requires,—

(a) ‘Accountant General’, means the Head of an Office of Accounts subordinate to the Comptroller and Auditor General of India.

(b) ‘Bank’ means any Authorized Bank acting as the agent of the Reserve Bank of India in accordance with the provisions of the Reserve Bank of India Act, 1934 (2 of 1934), or any branch of these banks as may be authorized by the Reserve Bank of India as its agent under the provisions of sub-section (I) of section 45 of the Reserve Bank of India Act, 1934 (2 of1934).

(c) ‘Chief Accounting Authority’, means the Secretary of a Ministry or Department of the Government of India in which the Departmentalised System of Accounting has been introduced and in the case of a Union Territory with separated accounts, its Chief Secretary/Administrator.

(d) ‘Accounts Officer’, means an Accounts Officer or a Principal Accounts Officer or a Pay and Accounts Officer functioning in an accounting formation of any Ministry/Department/UT Government.

(e) ‘Comptroller and Auditor General’ means the Comptroller and Auditor General of India appointed under article 148 of the Constitution of India.

(f) ‘Pr. Chief Controller of Accounts/Chief Controller of Accounts/Controller of Accounts’ means head of the accounting organisation in the departmentalised system of accounting.

(g) ‘Controller General of Accounts’ means the Controller General of Accounts in the Ministry of Finance (Department of Expenditure), who inter alia, is responsible for prescribing the form of accounts of the Union and States, and to frame, or revise, rules and Manuals relating thereto on behalf of the President of India in terms of Article 150 of the Constitution of India, on the advice of the Comptroller and Auditor General of India.

(h) ‘Consolidated Fund’ means the Consolidated Fund of India or of a State, referred to in clause (1) of Article 266 of the Constitution, or of a Union Territory with Legislature, referred to in Section 47 of the Union Territories Act, 1963,or all the three, as the context may imply (Appendix – 1).

(i) ‘Contingency Fund’, means the Contingency Fund of India established in pursuance of clause (1) of Article 267 of the Constitution or the Contingency Fund of a State established in pursuance of clause (2) of article 267 of the Constitution, or the Contingency Fund of a Union Territory Government established in pursuance of Section 48 of the Union Territories Act, 1963, or all the three, as the context may imply(Appendix-1).

(j) ‘Defence Department’ means that Department of the Central Government, whose expenditure is met from the Demands for Grants relating to Defence Services (Appendix-1).

(k) ‘Government’, means the Central (Union) Government or a State Government or a Union Territory (with Legislature) Government, or all the three, as the context may imply.

(l) ‘Heads closed to Government Accounts’, means the progressive figures of these heads shall not be carried forward to the next financial year.

(m) ‘Heads closed to balances’, means the progressive figures of these heads shall be carried forward to the next financial year.

(n) ‘Principal Accounts Office’ means an Accounts Office which is headquarter of various constituents of the departmentalized accounting system in a Ministry/Department.

(o) ‘Public Account’ means the Public Account of India or the Public Account of a State referred to in clause 2 of Article 266 of the Constitution.

(p) ‘Reserve Bank’ means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2 of1934).

(q) ‘State’, except where it appears otherwise from the context, refers to a State included in the First Schedule of the Constitution.

(r) ‘the Constitution’ means the Constitution of India.

(s) ‘Treasury’, means the government department responsible for financial matters such as receipts and payments in States and Union Territories; it includes sub-treasuries.

3. Articles of the Constitution etc. to be kept in view in devising the form of accounts

The form of accounts of the Union, States and Union Territory Governments shall be devised keeping in view the provisions of various articles of the Constitution and Sections of Union Territories Act, 1963, and in particular, of those indicated and reproduced in Appendix I to these rules.

NOTE:- According to article 150 of the Constitution, the form in which the accounts of the Union and of the States shall be kept is to be prescribed by the President on the advice of the Comptroller and Auditor General of India. This function is exercised by the Controller General of Accounts, Ministry of Finance (Department of Expenditure) on behalf of the President of India. The duties assigned to the Controller General of Accounts are contained in Appendix 2 to these rules. The duties and powers of the Comptroller and Auditor General of India are contained in the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act of 1971 (No. 56 of 1971) Sections 10, 11 and 22 of the Act (as amended from time to time) have been reproduced in Appendix 3 to these rules. The orders issued by the President of India in exercise of the powers conferred by the first proviso to sub-section(1) of section 10 and first proviso to section 11 of the said Act after consultation with the Comptroller and Auditor General of India are also included in Appendix 3 to these rules.

4. Annual Accounts

Every year, from the accounts compiled by the authorities authorised to maintain the accounts of Central Government, State Governments and Union Territory Governments, accounts showing under the respective heads the annual receipts and disbursements for the purpose of Union, of each State and of each Union Territory having a Legislative Assembly (including Appropriation Accounts) are to be prepared and got certified by the Comptroller and Auditor General of India. The reports of the Comptroller and Auditor General relating to these accounts shall be submitted to the President or the Governor of a State or the Administrator of a Union Territory having a Legislative Assembly, as the case may be, who shall cause them to be laid before the Houses of Parliament, Legislatures of the States and of Union Territories respectively.

5. Issue of Subsidiary Instructions

Subsidiary instructions that would be necessary for carrying into effect the provisions of these rules, and in particular, instructions for opening new heads of accounts or modification of the existing ones or instructions relating to the content and manner of maintenance of accounts, will be issued by the Central Government (Ministry of Finance) on the advice of the Comptroller and Auditor General of India, in the form of executive orders, indicating wherever necessary, the types of cases in which the advice of the Comptroller and Auditor General could be assumed to have been obtained.

6. Special provision relating to Railways, Posts, Telecommunications and Defence Departments

For the sake of practical convenience, the forms of accounts (including appropriation accounts), relating to Railways, Posts, Telecommunications and Defence Department, may be determined by the Departmental Accounting authorities within such range and covering such aspects as may be prescribed by the Central Government (Ministry of Finance, Department of Expenditure— Controller General of Accounts), on the advice of the Comptroller and Auditor General of India. The provisions of Article 150 of the Constitution will be deemed to have been satisfied if the forms so determined are not questioned by the Controller General of Accounts and the Comptroller and Auditor General of India.

NOTE:—With effect from 1982-83, the Ministry of Railways, Controller General of Defence Accounts, Director General Posts and Secretary Department of Telecommunications and Chairman Telecommunication Commission (now Digital Communications Commission) have been delegated functions of the Central Government under Article 150 of the Constitution in so far as such functions relate to the opening of sub-heads and detailed heads of Accounts under various major and minor heads of Accounts pertaining to their departments subject to the following conditions:-

(i) Powers as above shall be exercised in consultation with the accredited Audit officer namely ADAI (Railways), Director of Audit (Defence Services) or Principal Director (P&T) Audit;

(ii) Orders so issued should be consistent with the instructions that are issued as envisaged in Rule 5 of these Rules.

Chapter 2 – GENERAL OUTLINES OF THE SYSTEM OF ACCOUNTS

7. Agreement of the Central Government with the Reserve Bank

The Central Government has entered into an agreement with the Reserve Bank of India by virtue of which the general banking business of the Government (in which business is included, the receipt, collection, payment and remittance of moneys on behalf of the Government) is carried on and transacted by the Reserve Bank in accordance with and subject to the provisions of the agreement and of the Reserve Bank of India Act, 1934, and also in accordance with and subject to such orders as may, from time to time be given to the Reserve Bank by the Central Government.

8. Account of the Central Government with the Bank

(1) Ministries and Departments of the Central Government shall, as a rule, operate on such offices and branches of the Reserve Bank and or of the bank, as have been, or may be nominated for handling the receipt and payment transactions of the particular Ministry or Department.

(2) Each office or branch of the Reserve Bank or bank handling transactions of the Ministries, Departments of the Central Government shall maintain separate accounts in respect of each Ministry and Department banking with it and render an account of the transactions to the Pay and Accounts Officer of the concerned Ministry and, or Department, at such intervals as may be prescribed by the Government, together with all the supporting challans/E-Challans, paid cheques/Electronic Payment Advice. These transactions shall also be routed through the banking channel prescribed by the Reserve Bank of India, to facilitate their incorporation in the books of the Reserve Bank of India, Central Accounts Section, at Nagpur which is responsible for keeping a complete account, of receipt and payments (including inter-Governmental adjustments and adjustments interse of Defence, Railways and Posts—other than Telecommunications) on account of the Central Government.

(3) The transactions of Railways, Posts, Telecommunications and Defence Department arising at offices and branches of the Reserve Bank and other authorized bank(s), acting as agent of the Reserve Bank shall be distinguished from other Central transactions in the initial accounts and classified separately for each Railways, each circle of Posts, each Accounts Officer of Telecommunications, and each Controller of Defence Accounts respectively. These transactions will be taken against the Railway Fund, Postal Account, Telecommunications Account and Defence Account respectively, in the books of the Reserve Bank. Each office and branch of the Reserve Bank entrusted with the work shall furnish to Accounts Officer concerned of the Railways, Postal, Telecommunications and Defence Department, as the case may be, daily scrolls relating to the transactions pertaining to each, together with the requisite challans/E- challans, paid cheques/electronic payment advice.

NOTE:- A statement of the closing balance of the Central Government shall be sent each month, by the Central Accounts Section of the Reserve Bank to the Controller General of Accounts, indicating:-

(i) Central Government Account Balance (in respect of Union Territory Administrations dealt with by Accountants General and of all Union Territory Governments with Legislature).

(ii) Railway Fund Balance.

(iii) Postal Account Balance.

(iv) Telecommunication Account Balance

(v) Defence Account Balance.

(vi) Departmentalised Ministries’ Account Balance (which also includes transactions of Government of National Capital Territory of Delhi and Union Territory of Andaman and Nicobar Islands whose accounts have been separated).

(vii) Total.

The Central Accounts Section of Reserve Bank shall maintain individual accounts of various Central Government Ministries, Departments and of Union Territory Administrations having separated accounts offices, and send a monthly statement to their Principal Accounts Offices with such supporting details as may be prescribed by the Reserve Bank in consultation with the Controller General of Accounts; in respect of (i) above to the concerned Accountants General (with breakup of balances/transactions relating to Central Government and relating to relevant Union Territory Administrations) and Accounts Offices of Union Territory Governments; and in respect of (ii), (iii), (iv), (v) above, to the Railway Board, Postal Board, Telecommunications Board and Controller General of Defence Accounts respectively.

9. Accounts of State Governments with the bank

Each State Government has made a separate agreement with the Reserve Bank of India by virtue of which the general banking business of that Government (in which business is included, the receipt, collection, payment and remittance of moneys on behalf of that Government) is carried on and transacted by the Reserve Bank, in accordance with and subject to the provisions of the agreement and of the Reserve Bank of India Act, 1934, and in accordance with and subject to such orders as may from time to time be given to the Reserve Bank by the State Government. The operations of each State shall, however, be confined to the offices and branches of the Reserve Bank of India and of the bank which have been designated as falling within the area of that particular State. The receipt and payment of moneys on behalf of a State outside its jurisdiction shall ordinarily be arranged through the Accountant General of the State in which the transactions take place.

NOTE:- The government of Sikkim has not so far entered into agreement with the Reserve Bank of India for the conduct of its general banking business by the Reserve Bank.

10. Each office or branch of the Reserve Bank, or the State Bank of India acting as agent of the Reserve Bank, shall keep a separate account of cash transactions undertaken by it on behalf of the State Government within whose area it is situated. All transactions which cannot be debited or credited directly to the account of the Central Government with the Bank and transactions of other State Governments shall also be taken to the account of the Government of the State in which they occur. Statement of these transactions together with all supporting vouchers, challans/E-challans, paid/electronic payment advice cheques etc. shall be forwarded by each office and branch of the Bank daily to the local Treasury Officer or to the Accountant General as the case may be. The transactions shall also be reported to Central Accounts Section, Reserve Bank of India, Nagpur.

NOTE:- With effect from 1st February, 1978 transactions on account of discharge value of, and periodical interest on securities of State Governments, as well as receipts on account of subscriptions against market loans floated by State Governments are taken by the officers of the Reserve Bank of India directly against the cash balance of the State Government concerned with the Central Accounts Section of the Reserve Bank of India, Nagpur.

11. Complete accounts of the Central Government and of each of the State Government with the Bank shall be maintained by the Central Accounts Section of the Reserve Bank at Nagpur which shall also act as a general clearing house for the adjustment of (i) all transactions between different State Governments and (ii) such transactions between the Central and State Governments as may be specified by the Central Government. All adjustments to be made between the accounts of different State Governments as well as all payments which one of these Governments has to make to another shall be advised by the Accountant General authorised in this behalf to the Central Accounts Section of the Reserve Bank which will pass the necessary entries in the accounts of the Governments concerned, maintained in its books. Similarly, such adjustments in the case of specified transactions between the Central Government and the State Governments as well as transactions between Defence, Posts, Telecommunications and Railways inter se will be advised to the Central Accounts Section of the Reserve Bank by the Accountant General authorised in this behalf for making monetary settlement in the accounts of the Government concerned maintained in the books of the Bank. However, the advices to be sent by the Accountant General to the Central Accounts Section, Reserve Bank of India, Nagpur debiting to Central Government balances shall be supported by a certificate to the effect that “this advice represents withdrawal of an earlier erroneous credit to the Central Government and does not represent withdrawal of payments already made which were due to the Central Government and that necessary details are being furnished to the Principal Accounts Officer of the Central Government concerned.” Details of transfers affected in its books against the balance of the State Government or of the Central Government (and between accounts of Defence, Posts, Telecommunications and Railways inter se) as the case may be, on account of adjustments advised by Accounts Officers authorised for the purpose, shall be communicated by the Central Accounts Section of the Bank to the originating as well as to the effected Accounts Officers or Accounts Officer of the concerned Ministry/ Department of the Central Government at the close of each day. At the close of the accounts of each month, a statement of closing balance of each State Government in the books of the Bank after taking into accounts all cash transactions in all the offices, branches and agencies of the Bank and the adjusting transactions in its own books shall be forwarded by the Central Accounts Section to the Accounts Officer concerned.

Similarly, a statement of the closing balance of the Central Government comprising:-

(i) Central Government Account Balance (in respect of Central transactions of Accounts Officers and separated accounts of Union Territories only).

(ii) Railway Fund Balance.

(iii) Postal Account Balance.

(iv) Telecommunication Account Balance.

(v) Defence Account Balance.

(vi) Departmentalised Ministries Account Balance

(vii) Total

shall be sent to the Controller General of Accounts. Besides, the Central Accounts Section of Reserve Bank of India shall maintain individual accounts of all the Central Government Ministries /Departments as well as accounts of Railways Fund, Posts, Telecommunications and Defence and send a monthly statement to the Controllers of Accounts, Railway Board, Postal Board, Telecommunications Commission and Controller General of Defence Accounts. To keep the transactions under departmentalised system distinct from other Central transactions, the Central Accounts Section of Reserve Bank of India shall maintain a separate proforma account styled “Departmentalised Ministries Account”.

NOTE:- The Central Accounts Section of the Reserve Bank shall maintain individual account for each Ministry/Department of the Central Government. In respect of Accountant General having separate Central Section of Accounts in their books and of Accountant General accredited with Union Territory Governments/Administrations, the Central Accounts Section of the Reserve Bank of India, Nagpur shall send a statement of closing balance of each such account to the concerned Accountant General, Principal Accounts Officer of the Ministry/Department and the Accountant General of Union Territory Government/Administration, at the close of each month’s account with such supporting details as may be prescribed by the Reserve Bank of India, in consultation with the Controller General of Accounts.

State Transactions in Central Treasuries

12. Cash balances held in the treasuries of the Central Government form part of the Consolidated Fund, Contingency Fund and the Public Account of India. Such treasuries exist in those Union Territories whose accounts have not been separated from audit and continue to be compiled by the Comptroller and Auditor General of India. Transactions on behalf of State Governments arising in these treasuries shall be classified in the treasury accounts under the head _’8658 – Suspense Accounts – Suspense Accounts (Civil) – Accounts with Accountant General ………………‘ and settled in cash by exchange of cheques/demand drafts as the case may be.

NOTE:-At present the settlement of the transactions by exchange of cheques/demand drafts is resorted to in cases where the transactions taking place in a Union Territory accredited to an Accountant General are adjustable against the cash balances of a State, whose accounts are maintained by another Accountant General. These transactions are initially taken in the Central Section of accounts under the head ‘8658–Suspense Accounts-Cash Settlement Suspense Account’.
Transactions of the other Governments, including Central Government in State Treasuries

13. Cash balances held in a State Treasury form part of the Consolidated Fund, the Contingency Fund (if one has been established) and the Public Account of the State to which the Treasury belongs. The treasury Rules of each State Government issued under article 283 of the Constitution, however, provide that moneys may be received and payments made on behalf of other State Governments, by a State Treasury. Similarly, moneys may be received and payments made by such treasuries on behalf of the Central Government in the case of certain specified transactions. All such receipts and payments on behalf of other State Governments and the Central Government vide (b) infra shall be taken in the first instance against the cash balance of the State concerned. On receipt of intimation of such transactions through the monthly treasury account or otherwise the Accountant General shall take the following action:-

(a) In the case of transactions pertaining to the other State Governments, the Accountant General shall make the requisite adjustments through the Central Accounts Section of the Reserve Bank against the balances of the other State Governments concerned.

NOTE : This procedure shall also be applicable to moneys received in the office of the Accountant General on behalf of another State and book entries made in the office of the Accountant General affecting the accounts of another State Government.

(b) In the case of such transactions of the Central Government, including Railways / Postal / Defence Departments at State treasuries (both banking and non-banking), these shall be accounted for by the treasuries in the State Section of Treasury Account under the head ‘PAO Suspense – Transactions adjustable by PAO Ministry / Department of ‘ below the Major head ‘8658 – Suspense Accounts’ for necessary cash settlement by the State Accountant General with the Pay and Accounts Office.

Chapter 2 – GENERAL OUTLINES OF THE SYSTEM OF ACCOUNTS

7. Agreement of the Central Government with the Reserve Bank The Central Government has entered into an agreement with the Reserve Bank of India by virtue of which the general banking business of the Government (in which business is included, the receipt, collection, payment and remittance of moneys on behalf of the Government) is carried on and transacted by the Reserve Bank in accordance with and subject to the provisions of the agreement and of the Reserve Bank of India Act, 1934, and also in accordance with and subject to such orders as may, from time to time be given to the Reserve Bank by the Central Government.

8. Account of the Central Government with the Bank

(i) Central Government Account Balance (in respect of Union Territory Administrations dealt with by Accountants General and of all Union Territory Governments with Legislature).

(ii) Railway Fund Balance.

(iii) Postal Account Balance.

(iv) Telecommunication Account Balance

(v) Defence Account Balance.

(vii) Total.

9. Accounts of State Governments with the bank

NOTE:- The government of Sikkim has not so far entered into agreement with the Reserve Bank of India for the conduct of its general banking business by the Reserve Bank.

Similarly, a statement of the closing balance of the Central Government comprising:-

(i) Central Government Account Balance (in respect of Central transactions of Accounts Officers and separated accounts of Union Territories only).

(ii) Railway Fund Balance.

(iii) Postal Account Balance.

(iv) Telecommunication Account Balance.

(v) Defence Account Balance.

(vi) Departmentalised Ministries Account Balance

(vii) Total

State Transactions in Central Treasuries

12. Cash balances held in the treasuries of the Central Government form part of the Consolidated Fund, Contingency Fund and the Public Account of India. Such treasuries exist in those Union Territories whose accounts have not been separated from audit and continue to be compiled by the Comptroller and Auditor General of India. Transactions on behalf of State Governments arising in these treasuries shall be classified in the treasury accounts under the head ‗’8658 – Suspense Accounts – Suspense Accounts (Civil) – Accounts with Accountant General ………………‘ and settled in cash by exchange of cheques/demand drafts as the case may be.

NOTE :- At present the settlement of the transactions by exchange of cheques/demand drafts is resorted to in cases where the transactions taking place in a Union Territory accredited to an Accountant General are adjustable against the cash balances of a State, whose accounts are maintained by another Accountant General. These transactions are initially taken in the Central Section of accounts under the head ‘8658–Suspense Accounts-Cash Settlement Suspense Account’. Transactions of the other Governments, including Central Government in State Treasuries

NOTE :This procedure shall also be applicable to moneys received in the office of the Accountant General on behalf of another State and book entries made in the office of the Accountant General affecting the accounts of another State Government.

14. Broad outlines of the accounts – feeder-network and system of accounts of the Central Government and Union Territory Administrations.
The broad outlines are as follows:-

(a) All receipts in India on behalf of the Central Government (other than those of Union Territory Administrations which are having the treasury system) shall be paid into the bank. Drawals in India on behalf of the Central Government from the bank shall be made by cheques drawn thereon. These shall be accounted for by the bank as receipts and payments on behalf of the concerned Ministry and/or Department of the Central Government. In support of receipt and payment transactions at the bank, daily receipt and payment scrolls supported respectively by challans/E-challans and paid cheques/electronic payment advice shall be sent by the bank to the Accounts Officer of the Ministry or Department concerned.

(b) At present, some miscellaneous receipt and payment transactions (viz. payment of interest, repayment of principal on discharge of Central Government Securities and pensions including pensions to freedom-fighters) take place at State treasuries. Such transactions shall be accounted for by the treasuries in the State Section of Treasury accounts under the head “PAO Suspense – Transactions adjustable by PAO Ministry/ Department of ‘below the major head ‘8658 – Suspense Accounts’ for necessary cash settlement by the State Accountant General with the concerned Pay and Accounts Office.

Note1: In respect of payments pertaining to Central Government Securities, Principal Accounts Office, Department of Economic Affairs, New Delhi will bear the debits.

Note2: In respect of Central (Civil) Pensions including High Court Judges and Freedom Fighters, the debits will be raised against the PAO in the Central Pension Accounting Office.

(c) Officers of the Civil Ministries, Departments of the Central Government (including drawing and disbursing officers with cheque drawing powers) who are allowed to pay their receipts in the Consolidated Fund or the Public Account or withdraw moneys in lump for expenditure there from or from the Contingency Fund, shall submit detailed ‘accounts’ of their transactions to their respective Accounts Officers. Some specified Departmental Officers (e.g. CPWD Divisions, Forest Divisions) may be required to render to the Account Officers compiled accounts with suitable abstracts of their transactions classified under prescribed heads of accounts.

NOTE:- The ‘accounts’ referred to in this clause do not relate to the accounts maintained by Government servants in respect of expenditure incurred from permanent advance (i.e. cash imprests).

(d) From the accounts received from the bank and departmental officers, and from the book adjustments initiated in an Accounts Office, a Classified Abstract shall be compiled by the Pay and Accounts Officer showing the monthly receipts and payments pertaining to the Ministry, Department or Union Territory Administration under his payment control, classified under the relevant major, minor, sub and detailed heads. From the classified Abstract, a Consolidated Abstract showing the progressive totals month by month under major, minor, sub, detailed and object heads of accounts will be compiled.

(e) The Pay and Accounts Officer will send to his principal Accounts Office in the Ministry, Department or Union Territory Administration a monthly compiled account showing the receipts and payments under major, minor, sub, detailed and object heads of account (including debt, deposit and remittance heads of accounts), for enabling a consolidated account of the Ministry/Department or Union Territory Administration as a whole being prepared.

(f) In respect of Central transactions taking place at Central treasuries in Union Territories whose accounts are at present maintained by State Accountants General, each State Accountants General shall, [vide rule 15 (h) infra] send to the Controller General of Accounts, a monthly account showing the receipts and payments under major, minor, sub and detailed heads of account.

From the compiled accounts received from (a) Principal Accounts Offices of Ministries/Departments (b) Accountants General, and (c) separated accounts organisations of Union Territory Governments/Administrations, the Controller General of Accounts shall prepare a Consolidated Account of the Central (Civil) transactions as a whole.

(g) The cash balance of the Central Government in the books of the Controller General of Accounts, at the close of each month will be reconciled with the statements of closing cash balance received from the Central Accounts Section of the Reserve Bank.

(h) Departmental Officers of Posts, Telecommunications and Railway Departments submit accounts of their transactions to the respective Posts, Telecommunications and Railway Accounts Officers. Posts, Telecommunications and Railway Accounts Officers render their monthly accounts to the Postal Board, Telecommunication Board and the Railway Board respectively, who, in turn consolidate the accounts for their respective Departments as a whole. Consolidation of accounts of Defence Department as a whole is arranged by the Controller General of Defence Accounts from the accounts submitted by various Controllers of Defence Accounts functioning under him.

(i) A copy of the monthly account (Civil) shall be submitted to the Central Government in the Ministry of Finance (Department of Economic Affairs) by the Controller General of Accounts. Postal Board, Telecommunication Board. Railway Board and Controller General of Defence Accounts will submit the Consolidated monthly accounts of their respective departments separately to the Central Government.

(j) Principal Accounts Offices of the Ministries/Departments, separated accounts organisations of Union Territory Governments/Administrations and State Accountants General keeping accounts of Union Territories [vide rule 15(i) infra) shall work out during the year the progressive figures , of Central transactions in their books. On closing the account for March Supplementary. a progressive account of Central transactions will be furnished by them to the Controller General of Accounts. The Consolidated Annual Accounts of the Posts, Telecommunications, Railways and Defence Departments, shall also be prepared and submitted by the Postal Board, Telecommunication Board, Railway Board and the Controller General of Defence Accounts to the Controller General of Accounts, to enable him to prepare accounts relating to the annual receipts and disbursements for the purpose of the Central Government.

Note:- The Principal Director of Audit, Central, Calcutta and the Principal Accountant General (A&E) West Bengal will continue to maintain the Central Section of Account till the switch over of pension payment from treasury counter to Public Sector Bank is completed.

15. Broad outlines of the accounts – feeder-network and system of accounts of State Governments and of the Union Territory Governments. The broad outlines are indicated below:—

(a) All receipts in India on behalf of each State Government and on behalf of each Union Territory shall be paid into its Treasury or the bank, and initial accounts of such receipts shall be maintained at the treasury, keeping in view the provisions of the next clause.

(b) Receipts realised in the Public Works, Forest and any other departments which may be authorised in this behalf shall be paid into a treasury or the bank in lump and accounted for at the treasure merely as receipts on behalf of such departments. The detailed accounts of such receipts shall be kept by the departmental officers concerned.

(c) Payments in India on behalf of the State Governments and on behalf of the Union Territories shall ordinarily be made either at its treasury or the bank, but some departmental officers may be authorised to withdraw sums in lump from treasury or the bank for making payments. In the former case, the initial ‘accounts’ of payments shall be kept at the treasury, and in the latter case, such ‘accounts’ shall be maintained by the departmental officer concerned. The ‘accounts’ referred to in this clause do not relate to the accounts maintained by Government servant in respect of expenditure incurred from permanent advances (i.e. cash imprests). Officers of the Civil Departments who pay their receipts into the Consolidated Fund or the Public Account or withdraw moneys for expenditure there from or from the Contingency Fund in lump will submit detailed accounts of their transactions to their respective Accountant General. Some specified Departmental Officers may be required to render to the Accountant General comlaccounts with suitable abstracts of their transactions classified under prescribed heads of accounts.

(d) At the beginning of each month, each Accountant General will receive from the treasuries under his Jurisdiction monthly accounts supported by the requisite schedules, vouchers, in respect of the transactions which took place in the treasury during the previous month. Each State or Central treasury, which renders accounts to a State Accountant General will submit a double set of accounts, one for transactions of the State Government and the other for transactions of the Central Government.

(e) From the accounts furnished by treasuries and Civil Departmental Officers, referred to in clauses (b) and (c) above, Departmental Classified Abstracts will be compiled by the Civil Account Officers showing the monthly receipts and payments pertaining to each department for the whole account circle, classified under the relevant major, minor, sub and detailed heads. Separate classified abstracts will be maintained for each Department, each group of small departments or each major head or group of major heads of account not relating toany particular department or departments according to local conv adjustable against a department or against a major head not relating to any particular department which are intimated to the Civil Accounts Officer by another Accounts Officer as well as all book adjustments against a departmental or other major head which are initiated in the Accounts Office itself will also be incorporated in the relevant Departmental Classified Abstracts, so that the latter may include monthly all transactions of whatever nature connected with the receipts and payments pertaining to each department or major head of account. From these classified abstracts, separate Departmental Consolidated Abstracts showing the progressive totals month by month under major, minor, sub and detailed heads of revenue receipts and service payments will be compiled. Separate Consolidated Abstracts will be maintained for each department or major head of account or for a group of departments or major heads of accounts as may be found convenient. The Departmental Classified Abstracts and the Departmental Consolidated Abstracts for the Central transactions will be compiled separately from those for departments of the State Government.

(f) The transactions relating to Debt, Deposit and Remittance heads appearing in the Treasury Cash Accounts and Lists of Payments and in the Departmental and other Abstracts will be collected for the whole circle of account under each head of account from month to month in a Detail Book. From the figures in the Detail Book, the Consolidated Abstract of Debt, Deposit, Remittance, Suspense transactions will be prepared showing the progressive totals month by month under each major head in the “Public Debt”, “Loans and Advances”, sectors of the Consolidated Fund and those in the Public Account. This abstract will also show the progressive totals under such minor, sub and detailed heads as may be found necessary. Separate Detail Books and Consolidated Abstracts will be maintained for Central and State transactions.

(g) The final stage of compilation will be the preparation of the Abstract of Major Head Totals showing the receipts and disbursements by major heads during and to end of the month from the Departmental Consolidated Abstracts and the Consolidated Abstracts of Debt and Remittance transactions. From the Consolidated Abstracts for State and Centre respectively will also be compiled the monthly and the annual accounts of the State Governments and of Union Territory Governments with legislature and material for the annual accounts of the Central Government and of Union Territory Administrations. The cash balance of the State Government in the books of the Accountants General at the close of each month will then be reconciled with the balances shown in the Cash Accounts rendered by Treasury Officers and with the statements of closing balance received from the Central Accounts Section of the Reserve Bank. Reconciliation of figures under the head “8675— Deposits with Reserve Bank” in respect of transactions of the Central Government/Union Territory Governments and Administrations arising in their books will be effected by the Accountants General.

(h) A copy of the monthly account of each State Government, will be submitted to it by the Accountant General concerned. A copy of the monthly account of transactions finally adjusted in their books in respect of Union Territory Administrations, relevant portion relating to a Union Territory Government, and of Central Government Civil pensions will be rendered by the Accountant General to the Controller General of Accounts, vide Rule 14 (f)above.

(i) Each Accountant General will work out the progressive figures during the year of the Central and State accounts with which he is concerned. On closing the accounts for March (Supplementary), a progressive account of transactions and accounts relating to annual receipts and disbursements of State/Union Territory Governments with legislature will be furnished by him to the State Government/Union Territory Government. A progressive account of the transactions of the Union Territory Administrations and relevant transactions of Union Territory Governments for which budget provision is made in the composite Grants of the Central Government and transactions under the Public Account will be sent by the Accountants General to the Controller General of Accounts, vide rule 14 (j)above.

16. Accounts adjustment between different Accounts offices of the Central Government

(1) Subject to any general or special orders issued by the Central Government, transactions appearing in the books of an Accounts Officer in a Ministry /Department of the Central Government (including Railway, Defence, Posts and Telecommunications) which are adjustable in the books of an Accounts Officer of another Ministry/Department shall be passed on to the latter for adjustment and settled by cheque or bank draft.

NOTE:- The under mentioned transactions between Central Civil on the one hand and Defence Department, Posts, Telecommunications and Railway Department on the other hand, will however, continue to be settled through the Central Accounts Section of the Reserve Bank of India, Nagpur:-

(i) Debits on account of supplies transactions arising in the books of the Chief Accounts Officer, High Commission of India, London and Indian Embassy, Washington with the Defence, Railways and Posts which appear, initially, in the books of the Principal Accounts Officer, Ministry of External Affairs.

(ii) Loans from General Revenues to Railways and recovery of interest on loans and advances to Railways.

(2) Transactions initially taken against the balance of a State which are eventually adjustable against the balance of another State shall be passed on to the Accountant General of the latter State through the “Settlement Account” and the monetary settlement between the two states in respect of such transactions effected by the Accountant General of the former State through the Central Accounts Section of the Reserve Bank.

NOTE: Please see Note (ii) below Rule 13 (a).

(3) Central transaction initially taken against the balance of a State which are adjustable in the books of Accounts Officers of the Ministries/Departments of the Central Government shall be passed on by the Accountant General to the latter and settled by cheque or bank draft. However, repayment of Central loans and payment of interest thereon by the State Governments, excepting the Government of Sikkim, are settled through the Central Accounts Section of the Reserve Bank of India, Nagpur.

(4) Transactions of the Central and State Government handled in other countries by the Indian Embassies/Missions shall be incorporated in the cash account rendered by them monthly to the Pr. Chief Controller of Accounts. Ministry of External Affairs and the latter will effect cash settlement with the concerned Accounts Officers in India in the manner prescribed by t he Controller General of Accounts, on the advice of the Comptroller and Auditor General of India.

(5) The monthly accounts of the Central Ministries/Departments and of the State Governments will thus include not only the receipts and disbursements arising directly in the accounts of their Accounts Officers but also receipts and expenditure in other countries and all credits and debits passed on to them for adjustment by other Accounts Officers in India.

17. Authorities responsible for the preparation of Annual Accounts of the Central Government, State and Union Territories Governments.

(1) The annual accounts (including Appropriation Accounts) of the Central Government and of each State, Union Territory Government shall be prepared in the form prescribed by the President on the advice of the Comptroller and Auditor General of India under Article 150 of the Constitution of India. These Accounts shall be submitted to the respective State/Union Territory Legislature, and to Parliament on or before such dates as may be determined with the concurrence of the Government concerned.

(2) Annual Accounts (including Appropriation Accounts) in respect of State Governments, and Union Territory Governments with Legislature are prepared by the concerned Accountant General and submitted to the Comptroller and Auditor General of India for approval and transmission to the Governor of the State, Administrator of the Union Territory Government concerned, along with his report thereon in terms of Article 151 (2) of the Constitution/Section 49 of Union Territories Act, 1963 and Section 11 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971 for being laid before the Legislature.

(3) Appropriation Accounts of Central Ministries (other than Ministry of Railways) and of Central Civil Departments shall be prepared by the respective Ministries and Departments under the guidance and supervision of the Controller General of Accounts, and signed by their Chief Accounting Authority, Union Government Appropriation Accounts (Civil) required to be submitted to Parliament, shall be prepared by the Controller General of Accounts by condensing and consolidating the aforesaid Appropriation Accounts. Appropriation Accounts pertaining to Departments of Posts, Telecommunications, Railways and Defence shall be prepared and signed by the Secretaries to the Department of Posts, Department of Telecommunications, Financial Commissioner, Railway Board and Secretary (Defence Finance) respectively.

(4) Annual accounts of the Government of India as a whole (including transactions of Departments of Posts, Telecommunications, Defence, Railways. Union Territory Administration and transactions under Public Account of India, Accounts of Union Territory Governments with Legislatures showing under the respective heads the annual receipts and disbursement for the purpose of the Union, shall be prepared by the Controller General of Accounts.

(5) The Accounts mentioned in Sub-rules (3) and (4) above, shall be prepared by the respective authorities on dates mutually agreed upon with the Comptroller and Auditor General of India in the form prescribed by the President on the advice of the Comptroller and Auditor General and sent to the latter for recording his certificate. The certified annual accounts and the Reports relating to the accounts shall be submitted by the Comptroller and Auditor General to the President in accordance with the provisions of Section 11 of the Comptroller and Auditor General’s (Duties, Powers and Conditions of Service) Act, 1971 and clause (1) of Article 151 of the Constitution of India.

18. Proforma Accounts

The operations of some departments of Government sometimes include undertakings of a commercial or a quasi-commercial character e.g., an industrial factory or a store. Even though they may be maintained almost entirely for the benefit of the Department, it is still necessary that the financial results of the undertaking should be expressed in the normal commercial form so that the cost of the service or undertaking may be accurately known. This implies the maintenance of suitable Capital, Manufacturing, Trading and Profit and Loss accounts and as the Government system of account being on a purely cash basis is unsuitable for such commercial accounts, they will usually be kept on a pro forma basis outside the general accounts of Government. The actual transactions entering these pro forma accounts, except those adjusted on a liability basis, will find a place primarily in the regular accounts and the commercial accounts will be additional as well as separate. These pro forma accounts shall be maintained by the Departmental authorities themselves in such form as may be prescribed.

Certain pro forma accounts relating to Irrigation, Navigation, Embankment and Drainage Projects and Government residential buildings are required to be prepared by Civil Account Offices. Pro forma accounts are also sometimes required to be prepared for transactions which do not relate to commercial or quasi- commercial undertakings of Government e.g., transactions of the Famine Relief Fund. The form in which any pro forma accounts are prepared in Accou

19. Journal and Ledger

The accounts of Government are based, in the main, on the single entry system and the double entry system will be applied only in regard to the maintenance of a set of technical accounts called the Journal, Ledger and Trial Balance Sheet. The main purpose of the Journal and Ledger is to bring out by a scientific method, the balances of accounts in regard to which Government acts as a banker, or remitter or borrower or lender.
Though such balances are worked out in the regular Government accounts, their accuracy can be guaranteed only by a periodical verification with balances brought out in the double entry system. In the case of the Central Government, the various Accounts Officers shall prepare Ledger and summary of balances in accordance with the procedure separately prescribed for the purpose by the Controller General of Accounts. State Accountants General will maintain separate Journal and Ledger for all transactions of the State Government, from which the annual summary of Balances or Trial Balance Sheet is prepared by them.

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FINMIN Order : Amendment in Government Accounting Rules, 1990: FinMin issues Draft Revised GAR 2021 for comments

FINMIN Order : Amendment in Government Accounting Rules, 1990: FinMin issues Draft Revised GAR 2021 for comments

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FINMIN Order : Amendment in Government Accounting Rules, 1990: FinMin issues Draft Revised GAR 2021 for comments

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