8.19 PROCEDURE FOR DRAWING BY UT ADMINISTRATIONS AGAINST DG OF CENTRAL MINISTRIES/DEPARTMENTS (OTHER THAN THE AREA DEMAND) FOR WHICH PROVISION DOES NOT EXIST IN THE UT BUDGET AND CASH SETTLEMENT FOR IT.
8.19.1 Government of India does not give Loans or grants to the UT Administration under the head 3602. For them, budget provision is made by the Ministries/Departments under the relevant functional Major Heads in the Revenue and Capital Sections of the DG. The relevant Departmental officers have been authorized by issue of LOA by the Central Ministries/Departments through PFMS to incur expenditure against these heads in the DG. In such cases, each withdrawal by the departmental officer of the UT Administration shall be on the basis of the administrative approval and expenditure sanction accorded by the main Ministry/ Department concerned.
8.20 PROCEDURE FOR ADJUSTMENT OF ITEMS OF CENTRAL CIVIL RECEIPTS/EXPENDITURE ARISING IN THE BOOKS OF POSTS, TELECOMMUNICATIONS, RAILWAYS AND DEFENCE.
8.20.1 In respect of transactions for which the relevant Civil Ministry/Department do not have to maintain detailed individual wise accounts of the receipts and payments, they will be finally accounted for under the concerned Major etc. (Civil) heads of account in the books of Posts, Telecommunications, Railways and Defence Departments. Such transactions may arise in connection with any scheme/subject etc. applicable to all the employees of the Government of India, including civilians paid out of Defence Estimates, Posts or Telecommunications. The following heads are a few examples of this type of transaction-‘0020-Corporation Tax’; ‘0021- Taxes on Income other than Corporation Tax’; ‘2047-Other Fiscal Services’; ‘2049-Interest Payments’ and ‘7610-Loans to Government Servants’, etc.
Note- However, even though individual account is maintained in the cases of licence fee for Government quarters that are a part of the General Pool accommodation managed by the Director of Estates, no monetary settlement is to be effected. Such recoveries are required to be booked directly against the final head in the books of Posts/Telecommunications/Railways Departments.
[Authority: Principal Accounts Office, Min. of Urban Development, New Delhi's OM No. G25011/1/91-92/ Principal Accounts Office/ T&C/293 -98 dated 9th April, 92.]
8.20.2 The receipts and payments relating to civil estimates under the Major Heads ‘0059–Public Works’, ‘0075-Misc.General Services’, ‘0210-Medical and Public Health’; ‘0216-Housing’, ‘2052- Sectt. General Services’, ‘2059-Public Works’, ‘2216-Housing’, ‘4059-Capital Outlay on Public Works’ and ‘4216-Capital Outlay on Housing’ shall be adjusted to the final head in the books of
What This Means
This paragraph addresses a unique situation where UT Administrations (without legislature) need to draw funds against the Demand for Grants (DG) of Central Ministries/Departments for which no provision exists in the UT's own budget. Unlike States, these UTs do not receive loans or grants under head 3602. Instead, budget provision is made directly by the Central Ministry under its own functional Major Heads. The UT's departmental officers draw funds against these Central allocations through a prescribed procedure that involves the UT Administration's treasury and the PAO of the Central Ministry, with cash settlement to ensure the expenditure is properly accounted for in the Ministry's books.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
1Applies to UT Administrations without legislature drawing against Central DG
2No loans/grants under head 3602 for these UTs — provision is in Central Ministry's budget
3UT departmental officers draw funds through the UT treasury
4Cash settlement between UT treasury and Central Ministry's PAO
5Ensures expenditure is booked in the correct Central Ministry's accounts
Practical Example
The UT Administration of Lakshadweep needs to carry out a project under the Ministry of Environment, but there is no provision in the Lakshadweep UT budget for it. The Ministry of Environment has made the provision in its own DG. The UT's departmental officer draws from the Lakshadweep treasury against this Central allocation. The treasury debits the expenditure, and through cash settlement, the Central Ministry's PAO picks up the charge in its compiled accounts.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why can't UT Administrations simply receive grants like States?▼
UTs without legislature are directly administered by the Central Government. Their budgets are part of the Central budget. When a Central Ministry provides for UT expenditure, it does so in its own Demand for Grants rather than transferring funds as grants.
How does the cash settlement work?▼
The UT treasury makes the payment and reports the expenditure. The Central Ministry's PAO then picks up the debit through a cash settlement process, ensuring the expenditure appears in the Ministry's compiled accounts under the correct head.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
the Defence Department, without any monetary settlement with the concerned Civil accounting authority. The authority consolidating the accounts of these departments shall render a monthly statement of receipts and payments including progressive figures for the financial year to the Accounting Authority of the concerned Ministry. The same shall be sent to the Pr.Accounts Office of the Ministry/Department concerned along with the details of scheme/subject. While submitting the monthly accounts, the figures under the relevant minor/ sub-head will also be furnished to the CGA organization. Following are a few examples- the statements in respect of Corporation Tax and Income Tax recoveries are to be rendered to the Pr.CCA, CBDT, and receipts/payments under Government Employees' Insurance Scheme under Major Heads 0235 and 2235 or Loans to Government servants under Major Head 7610 will be rendered to CCA Ministry of Finance. The budget forecast for the receipt and expenditure based on actual figures will be furnished by Postal Board, Telecom Board and FA Defence, to the respective Civil Ministry/Department in connection with the preparation of Budget Estimates and Revised Estimates as well as for the administration/control of the relevant composite DG. The accounting authority in the Central Civil Ministry/Department is required to watch the receipt of such monthly/annual statements. He shall consider these reported figures for calculating the expenditure figures, and preparation and finalization of Appropriation Accounts for the relevant DG under his accounting control.
DETAILED INSTRUCTIONS IN REGARD TO THE PROCEDURAL ASPECTS OF ACTION IN THE MINISTRY/DEPARTMENT AND THEIR PRINCIPAL ACCOUNTS OFFICES AND AG OFFICES
A.- Payment of loans/grants to State Governments by the Central Government
(i) The Ministries/Departments of the Government of India should endorse copies of the sanctions for payment of loans and grants to the state Governments, to the Principal Accounts Office of the Ministry/Department. Finance Department of the State and the AG of the State Government concerned.
(ii) On receipt of the sanction, the Principal Accounts Office of the Ministry/Department concerned would directly advise the Central Accounts Section of the RBI, Nagpur immediately (in any case within two days at the most) for crediting the balance of the State Government by debit to the balance of the Central Government. Simultaneously the Principal Accounts Office will pass an entry in his books debiting the appropriate final head of Account e.g. Major Heads ‘3601’, ‘7601’ etc. and crediting "8658-Suspense Accounts-Central Accounts Office R.B. Suspense". Such advices may be sent by Fax followed by post copies through Speed Post on the same or next day of advice.
(iii) A copy of the advice at
(ii) above along with a copy of the sanction should be sent by the Principal Accounts Office of the Ministry/Department to the Deputy AG by name and the Finance Departments of the State Government concerned. Full particulars, i.e. the no. and date of the sanction, the scheme for which loan/grant etc. has been sanctioned, amount etc. should be indicated clearly in the advice.
(iv) On receipt of the advice from the Principal Accounts Office of the Ministry/Department in Central Accounts Section, Nagpur, the RBI will credit the balance of the concerned State Government and pass on the debit through the RBI Central Account to the office of the RBI maintaining the accounts of the Ministry/Department, giving reference to the no. and date of the advice. Copies of the clearance memorandum after making the adjustments should be sent by the CAS, RBI, Nagpur to the concerned State AG and to the Principal Accounts Office of the Ministry/Department concerned, giving particulars of the advice on the basis of which the adjustments have been carried out.
(v) On receipt of the clearance memorandum from the CAS,RBI, Nagpur the Suspense Head mentioned at
(ii) above will be cleared by the Principal Accounts Office of the Ministry/Department by minus credit by per contra credit to the head `8675 Deposits with Reserve Bank-Central-Civil-Reserve Bank-Central Accounts Office’.
(vi) The office of the RBI maintaining the accounts of the Ministry/Department, will include the debit advised by the Central Accounts Section of the RBI, Nagpur as a distinct item in the monthly statement sent to the Principal Accounts Office. The Principal Accounts Office should ensure that the amount debited in the monthly account sent by the RBI tallies with the amount of the advice sent by them to the CAS,RBI at Nagpur. CCA/CA should also review the Register of Advices maintained by Principal Accounts Office on 10th of each month. (Authority: -Ministry of Finance (Deptt. of Exp.) O.M. NO. F2(45)/76-SC dated 22-2-1977 on file No. T-14013/1/78/MFCGA/Codes).
Note: - "The procedure for release of ways and means advance by the Plan Finance Division of the Ministry of finance to the State Governments has been discontinued and from the financial year 1977-78 onwards the Ministries themselves will release funds to the State Governments directly for the centrally sponsored schemes and others administered by them and maintain all the necessary accounts. As the Ministries, themselves will be directly releasing the funds to the State Governments, their Principal Accounts Office would arrange to make the payment of loans and grants on this account also in accordance with the procedure prescribed in the Ministry of Finance, Deptt. of expenditure Special cell O.M. No. F.2(45)/76-Special Cell dated 22-2-77 reproduced as Para A above).
(Authority: - MOF (DE) O.M. No. 10 (1)-PFI/76 dated 22.1.1977 and G-26035/1/77-MF-CGA dated 17.5.1977 on file No. T-14013/6/78/MF-CGA/Codes).
B.- Repayment of Loans and payment of interest thereon by State Governments in respect of Loans from Central Government
(i) The AG of the concerned State Governments will as before arrange for such payments on the due dates by issuing advice to the Central Accounts Section of the RBI at Nagpur for crediting the balance of the Central Government by debit to the balance of the State Governments concerned.
(ii) The advices sent by the State AG to the RBI should clearly indicate the name of the Ministry and Department and the Principal Accounts Office, in whose books the amounts are creditable. Copies of the advices sent by the AG to the Central Accounts Section of the RBI should invariably be endorsed to the Principal Accounts Office of the Central Ministry/Department in whose accounts the amounts are adjustable, as indicated in the form given below together with a statement, giving the following information.
i. No. and date of the sanction for the original Loan
ii. Amount of the Loan. iii. Rate of interest applicable. iv. Repayment of Principal. a. Date on which due; b. Amount of repayment; c. Reasons for delay, if any.
v. Payment of interest.
(a) Date on which due;
(b) Amount paid and rate at which calculated;
(c) Reasons for delay, if any.
(iii)On receipt of the advice from the AG, the CAS of the RBI will debit the balance of the concerned State Government and pass on the credit to Central Government through the RBI Central Account to the Office of the RBI maintaining the account of the Ministry/Department concerned, supported by full particulars relating to the advice. A copy of the clearance memo after making the adjustment should also be sent to the Principal Accounts Office of the Ministry/Department concerned supported by full particulars relating to the advice.
(iv) On receipt of the copy of the advice from the AG referred to in para
(ii) above, the Principal Accounts Office will take credit under the appropriate loan/interest head by contra debit to Reserve Bank Suspense. On receipt of the clearance memo from the RBI the Principal Accounts Office should link it with the copy of the advice received from the AG and clear the suspense head by per contra debit to the head ‘8675-Deposits with Reserve Bank-Central-Civil- (CAS)’."
(v) The office of the RBI maintaining the accounts of the Ministries/Departments will include the credit passed on by the Central Accounts Section in the periodical statements of accounts rendered to the Principal Accounts Office. It should be ensured by the Principal Accounts Office that the relevant credits appear in these statements as early as possible after receipt of clearance memo from the Central Accounts Section.
(vi) Though the State AG will be initiating action as above for repayment of loans and advances and payment of interest, the Principal Accounts Office of respective lending Ministries/Departments, will be responsible for maintaining necessary loan ledgers and ensuring that the central loans and advances to the states are repaid in the manner prescribed on due dates and payment of instalments of interest are also made correctly and on due dates. The detailed accounts of the loans will be kept by the Principal Accounts Offices as required in para 8.15.5 of this chapter. Cases of default or delay in repayment of loans or payment of interest should be promptly taken up with the Governments concerned. The position should also be reported to the CGA, Ministry of Finance in such form and at such intervals as may be prescribed by him.
[Authority: - MOF (Department of Expenditure) O.M. No. F. 2(45)/76-Special Cell dated 11-1- 1979 on File No. T-14013/1/78-MF-CGA/Codes]
TABLE (See Part 'B' above)
Nature of Central Ministry/Department in whose accounts loan Repayments of Principal and interest are to be adjusted. A. In respect of loans as were outstanding at the end of 1978-79 (a)Consolidated Rehabilitation
(i) Department of Rehabilitation in respect of loans for relief Scholarship loans and rehabilitation of displaced persons, repatriates etc.
(ii) Ministry of Education and Social Welfare in respect off loans under National Loan Scholarship Scheme.
(iii) Department of Revenue and Banking (Revenue Wing) in respect of loans for relief of displaced gold smiths.
(b) Other Consolidated loans Ministry of Finance, Department of Economic Affairs.
(c) Loans against net collection Ministry of Finance, Department of Economic Affairs. of Small Savings collections
(d) Other Loans Ministry of Energy (Department of Power)
(i) Bhakra Nangal Project
(ii) Hira Kund Stage-I (Orissa) B. In respect of loans sanctioned in 1979-80 or thereafter
(e) Various categories of Ministry/Department which sanctioned the loans and loans and Ways and Means advances Advance