Para 10.9 — CAM
Original Rule Text
10.9 GRANTS-IN-AID
10.9.1 Grant-in-aid can be given only to a person or a public body or an institution having distinct legal entity. One department of the Government cannot sanction grant-in-aid to another department. An organization set up by a Government resolution or by an executive order that does not have separate legal status of its own and functions only as an arm of the Government, cannot be given any grant.
10.9.2 Instructions on the conditions for sanctioning grant-in-aid to public bodies, institutions etc are contained in Chapter 9 of the General Financial Rules 2017. Those provisions should be kept in view, apart from the provisions in para 2.16.15 of this Manual, for scrutiny of such sanctions and guidance on maintaining the relevant register(s).
10.9.3 In terms of Rule 238 of GFR, 2017, a formal utilization certificate of the grants should be furnished by the administrative authority in the given format to the PAO. Normally, the certificate should be based on statements of accounts and the reports regarding performance or achievements of the grantee institutions vis-a-vis the objects and conditions of the grants. In case of the schemes covered under Direct Benefit Transfers (DBT), where the fund flow is directly from the Central Government to the beneficiaries, the intimation from the bank/National Payments Corporation of India (Aadhaar Payment Bridge) regarding deposit of the funds in the beneficiaries’ bank accounts, generated as per procedure prescribed by the CGA, may be treated as a Utilization Certificate.
10.9.4 The following conditions apply for submission of utilisation certificates in respect of grants given by Central Government to State Governments:
a. Utilisation certificates are not required where the expenditure is incurred out of the Central grants, by the State Governments directly.
b. Where such expenditure is incurred by the State Governments through local bodies or private institutions, the State Government concerned should furnish the utilisation certificates as per Rule 232 of GFR-2017.
10.9.5 In respect of grants to non-government or quasi-government bodies or institutions, the assets acquired wholly or substantially out of Government grants should not be disposed-off or
used for purposes other than the objects of the grant, without prior sanction of the Government. The PAOs and the Internal Audit Units have, therefore, to watch compliance with such conditions.
10.9.6 The prescribed 'Register of Grants -in-aid' in Form CAM -28 may be used for entering payments relating to scholarships etc. but receipt of utilisation certificates is not required in this case.
What This Means
Grants-in-aid can only be given to persons or entities with a distinct legal entity — not from one government department to another. The conditions for sanctioning grants are in GFR 2017 Chapter 9. Utilization certificates must be submitted to the PAO by the administrative authority. For DBT schemes where funds go directly to beneficiaries, bank confirmation of credit serves as the utilization certificate. Assets acquired from government grants cannot be disposed of or used for other purposes without prior government sanction. Any interest or earnings on unspent grant balances must be remitted to the Consolidated Fund of India.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Grants-in-aid can only go to entities with distinct legal identity — not between government departments
- 2Utilization certificates required in Form 12-B of GFR 2017 except for State Government direct expenditure
- 3For DBT schemes, bank confirmation of beneficiary credit serves as utilization certificate
- 4Assets from government grants cannot be disposed of without prior government sanction
- 5Interest earned on unspent grant balances must be mandatorily remitted to the Consolidated Fund of India
Practical Example
The Ministry of Social Justice gives a Rs 5 crore grant-in-aid to an NGO for a skill development program. The NGO keeps the funds in a bank account and earns Rs 3 lakh in interest before spending the grant. Upon finalizing accounts, the NGO must remit the Rs 3 lakh interest to the Consolidated Fund of India. Any computers or equipment purchased with grant funds cannot be sold without government permission. The NGO submits a utilization certificate to the PAO in the prescribed format.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Can one government department give a grant-in-aid to another?▼
What happens to interest earned on unspent grant balances?▼
How are grants-in-aid tracked by the PAO?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.