Para 2.13 — CAM

2.13 CLASSIFICATION OF AID MATERIALS & EQUIPMENTS RECEIVED FROM ABROAD

2.13.1 The value of materials, equipment and other commodities received from foreign countries etc., as aid, without involving any cash inflow or outflow should be taken as a receipt under Major Head "1606- Aid Materials and Equipments" by a corresponding debit to the Major Head '3606- Aid Materials and Equipments". When the material or equipment are allocated for use by Government departments or given as grants-in-aid to private bodies etc. the value thereof should be debited to the relevant Major Head concerned relieving the initial debit under the Major Head '3606' by a deduct entry. The same procedure should be followed in the case of transfer of such material by Central Government to State and Union Territories as grants or loans and the debits in Central Government accounts should be to the Major Heads for grants-in-aid/loans and advances to State Governments and Union Territory Governments. When, however, the aid material is sold, the sale proceeds should be credited as a receipt under the relevant Major Head of function for which the material etc. is received. The value of technical services or cost of experts deputed by foreign agencies directly from their own resources does not have to be incorporated in Government Accounts.

2.13.2 Cash grants, as distinct from commodity or other assistance in kind received from external sources (like foreign governments, international bodies, agencies etc.) are to be accounted for only by the Controller of Aid Accounts and Audit, Department of Economic Affairs, Ministry of Finance in his books under the relevant minor heads below the major head "1605- External Grant Assistance". In case Ministries/Departments receive such cash grants, the details of the same should be passed on to the Controller of Aid Accounts and Audit for final accounting in his books. Copies of letter of agreements exchanged between Ministries/Departments and donor countries in regard to cash grants, technical assistance/aid in the form of aid materials and equipment etc. should also be endorsed to him simultaneously, for issue of suitable accounting procedures for the same.

2.13.3 Some agreements like those under Colombo Plan require the value of the aid material received (i.e. counter-part funds generated) to be exhibited in a Fund Account, so as to be released in due course for utilization on agreed projects. In such cases, it would be sufficient, if a Proforma Account of the Aid received and expenditure therefrom on the agreed projects is kept by the Department concerned, avoiding reflection of the transactions under such Funds in Government Accounts.

What This Means

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

• 1Foreign aid received as materials/equipment (not cash) must be booked at full value in accounts
• 2Receipt is credited under MH 1606 with a contra debit to MH 3606
• 3When materials are allocated to departments, the value is transferred to the relevant service major head
• 4Grants-in-aid of materials to private bodies are also accounted for similarly
• 5The accounting ensures transparency even when there is no actual cash flow

Practical Example

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.