Appendix I — DFPR

APPENDIX-I (See Rule 10) No. F. 1 (22)-B (AC)/2022 Government of India Ministry of Finance Department of Economic Affairs (Budget Division)

In pursuance to the approval by the Public Accounts Committee, vide its One hundred third Report (Seventeenth Lok Sabha) (2023-24), on the proposal for revision of financial limits for determining the cases relating to ‘New Service’ (NS)/’New Instrument of Service’ (NIS) for re-appropriation of funds, the revised limits and guidelines are hereby conveyed in supersession of this Ministry’s Office Memorandum No. F.1(23)-B(AC)/2005 dated 25th May 2006. The extant guidelines are being revised to ensure systemic uniformity, consistency, administrative efficiency and financial discipline by the Ministries/Departments.

2. Definition of ‘New Service’(NS)/’New Instrument of Service’ (NIS):

(i) ‘New As in Article 115(1)

(a) of the Constitution of India, it refers to expenditure arising out of a new policy decision, not brought to the notice of Parliament earlier, including a new activity or a new form of investment.

(ii) ‘New Instrument of It refers to relatively large expenditure arising out of important expansion of an existing activity.

3. Applicability of ‘New service’/ ‘New Instrument of Service’:

(i) The revised financial limits are attached as Annexure ‘A’.

(ii) The limits shall be applicable to all ministries including Ministry of Railways, Ministry of Defence and Department of Post.

(iii) The nature of transactions under consideration for applicability of the finan cial limits have been aligned strictly with the ‘object head of account’. It is treated as Primary Unit of Appropriation.

OFFICE MEMORANDUM New Delhi, the 23rd February, 2024 Subject: Revised Guidelines on Financial Limits to be observed in determining cases relating to ‘New Service’/ ‘New instrument of Service’.

(iv) This means that the guidelines shall correspond to the original appropriation as available at the level of 15-digit numeric code in respect of civil ministries and/or final unit of appropriation as available in the Detailed Demand for Grants in respect of non-civil ministries, as the case may be.

(v) Definitions as indicated in Paragraph 2 above will be the guiding factor while making decision on the applicability of limits of New Service/New Instrument of Service.

4. While using these terms and applying the financial limits as indicated in the Annex, it needs to be noted that no expenditure can be incurred from the Consolidated Fund of India on a ‘New Service’/’New Instrument of Service’ without prior approval of Parliament through supplementary demands for grants.

5. Where in an emergent case of ‘New Service’/ ‘New Instrument of Service’ it is not possible to wait for prior approval of Parliament, the Contingency Fund of India can be drawn upon for meeting the expenditure pending its authorization by Parliament. Recourse to this arrangement should normally be taken only when Parliament is not in session. Such advances are required to be recouped to the Fund by obtaining a Supplementary Grant. However, when Parliament is in session, a Supplementary Grant should preferably be obtained before incurring any expenditure on a ‘New Service’/ ‘New Instrument of Service’. That is to say, recourse to Contingency Fund of India should be taken only in cases of extreme urgency. In such cases the following procedure recommended by the Sixth Lok Sabha Committee on Papers Laid on the Table in their 4th Report should be observed:

“As far as possible, before such withdrawal is made, the concerned Minister may make a statement on the floor of the Lok Sabha for information giving details of the amount and the scheme for which the money is needed. In emergent cases, however, where it is not possible to inform the Members in advance, the withdrawal may be made from the Contingency Fund and soon thereafter a statement may be laid on the Table of the Lok Sabha for the information of the Members”.

It has been suggested by the Rajya Sabha Secretariat that the above procedure may also be observed in Rajya Sabha. 6. Checks to be observed by the Ministries/Departments to ensure compliance of the provisions of this Office Memorandum are as under:

(i) By Integrated Finance Division/Budget Unit: A specific certificate should be recorded in each case Involving augmentation of sanctioned provision on receipt of related proposals, to the effect that the proposed augmentation attracts/does not attract financial limits of ‘New Service”/ ‘New Instrument of Service’;

(ii) By PAOs: Each expenditure sanction to be examined by PAOs from the ‘New Service’/ ‘New Instrument of Service’ angle keeping in view the financial limits indicated in the Annex;

(iii) Where any doubt arises about the application of financial limits of ‘New Service’/ ‘New Instrument of Service’, the PAO would seek decision from Financial Advisor of appropriate jurisdiction.

7. Circumstances for obtaining Supplementary grants for expenditure qualifying as ‘New Service’/ ‘New Instrument of Service’ and the reporting procedure thereof are as follows:

10. Doubtful cases: In case of disagreement between the Integrated Finance Wing and Pay and Accounts Office, the Ministry/ Department may send a self-contained communication to the Budget Division, Ministry of Finance, bringing out specific point

(s) of doubt incorporating their Financial Adviser’s views thereon. The decision taken by the Budget Division in the matter will be final.

(i) If sufficient savings are available within the same section of the relevant grants for meeting additional expenditure to the extent mentioned in column 2 of the Annex A, re-appropriation can be made, subject to report to Parliament;

(ii) Report to Parliament should ordinarily be made through the ensuing batch of Supplementary Demands for Grants, failing which by adding an Annex in the Detailed Demands of the Ministry/ Department for the ensuing year;

(iii) A suitable write-up of such cases where possible, may also be made in the Notes on Demands for Grants of the Ministry/Department;

(iv) Mere depiction of augmented provisions in the Revised Estimates included in the Demands for Grants will not be adequate to meet the requirement to incur expenditure. In cases where the financial limits of ‘New Service’/ ‘New Instrument of Service’ are attracted, approval of Parliament may be obtained for incurring such expenditure through Supplementary Demands for Grants;

(v) The provisions in the Vote on Account’ are not intended to be used for expenditure on any ‘New Service’. In cases of urgency, expenditure on a ‘New Service’ during Vote on Account period can, therefore, be incurred only by obtaining an advance from the Contingency Fund. Such advances will be resumed to the Contingency Fund on enactment of Appropriation Act in respect of expenditure for the whole year.

(i) Having regard to the volume and nature of Government transactions, it is not possible to list out all such cases which are not attracted by ‘New Service’/ ‘New Instrument of Service’ limits. Broadly, expenditure on normal activities of Government (such as normal administrative expenditure including those resulting from re-organization of Ministries/ Departments, holding of conferences, seminars, exhibitions, surveys, feasibility studies, etc., assistance to foreign Governments, contributions to international bodies, and fulfilment of Government guarantee on its invocation) may not attract limits of ‘New Service’/’New Instrument of Service’;

(ii) Transfers to State and Union Territory Governments are also exempt from these limits provided the scheme is not new;

(iii) Further, these limits are applicable only to expenditure which is subject to Vote of Parliament.

11. Conclusion: While agreeing to the revision of norms for re-appropriation of funds as annexed, the Public Accounts Committee in its One hundred and third Report (Seventeenth Lok Sabha) has concluded by stating as under:

‘The Committee also expect the Financial Advisors of all the Ministries/Departments to ensure that no violation occur in implementation of the revised limits for ‘New Service’/’New Instrument of Service’. It goes without saying that any slackness in complying with the same may be strictly dealt with.’

13. This issues with the approval of the Finance Secretary and Secretary Expenditure. 14. Hindi version will follow. (Vishnukanth P.B.) Director (Budget)

1. All Ministries/Departments of the Government of India. 2. Financial Commissioner (Railways), Financial Advisor (DS), Member Finance (Telecom) and all other Financial Advisors 3. Finance Secretaries of Union Territory Administration (Chandigarh, Andaman and Nicobar Islands, Dadra and Nagar Haveli and Lakshadweep) 4. Controller General of Accounts, Controller General of Defence Accounts and Chief Controller of Accounts of Ministries

Copy forwarded for information to: 1. Lok Sabha Secretariat (PAC) Branch/Rajya Sabha Secretariat 2. Comptroller and Auditor General of India and all Director of Audit/Accountant General 3. Finance Secretaries of all State and Union Territory Governments

*refers to the 15-digit numeric code in respect of civil Ministries or final unit of appropriation available in the Detailed Demand for Grants in respect of non-Civil Ministries.

New Instrument of Service (NIS) 3. The financial limits for the ‘New Instrument of Service’ shall be as under:

Object Heads Reporting Limit Prior Approval of Parliament 1 2 3 1. Machinery & Equipment; 2. ICT Equipment; 3. Building and Structure; 4. Infrastructural Assets; 5. Arms and Ammunitions; and 6. Land Above ` 50 crore but not exceeding ` 100 crore, subject to savings within same section of the Grant Above ` 100 crore, subject to savings within same section of the Grant

Object Heads Reporting Limit Prior Approval of Parliament 1 2 3 1. Investment; 2. Loans and advances; 3. Subsidies; 4. Machinery and equipment; 5. ICT Equipment; 6. Building and Structures; 7. Infrastructure assets; 8. Arms and ammunitions 9. Land; 10. GIA Capex; 11. GIA General; 12. GIA Salary upto 20% of the original appropriation* OR upto ` 100 crore whichever is higher [subject to savings within same section of the Grant] Above 20% of the original appropriation (15-digit line item) OR` Above ` 100 crore, whichever is higher [subject to savings within same section of the Grant] All other Object Heads Each case to be decided on merits (see para 2 & 3 of the OM No. 1(22)-B(AC)/2022 dated 23.02.2024)

New Service (NS) 1. All new services [except for the new ‘Works’ under Capital section] shall be considered as ‘New Service’ as defined in Article 115 of the Constitution and shall accordingly need prior approval of the Parliament; 2. In case of services falling under the category of new works under Capital section (currently classified as Land/Building/Machine in line with Rule 8 of the Delegation of Financial Powers as amended through Ministry of Finance Gazette Notification dated 16.12.2022), the financial limits for the ‘New Service’ shall be as under:

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 1 01 Salaries Exempted Exempted Falling within the concept of Normal Establishment Expenditure 2 02 Wages Exempted Exempted Falling within the concept of Normal Establishment Expenditure 3 05 Rewards Exempted Exempted Falling within the concept of Normal Establishment Expenditure 4 06 Medical Treatment Exempted Exempted Falling within the concept of Normal Establishment Expenditure 5 07 Allowances Exempted Exempted Falling within the concept of Normal Establishment Expenditure 6 08 Leave Travel Concession Exempted Exempted Falling within the concept of Normal Establishment Expenditure

‘B’ to the Ministry of Finance OM No. 1(22)-B(AC)/2022 dated 23.02.2024 Object Head-wise Matrix of the Financial Limits Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 7 09 Training Expenses Exempted Exempted Falling within the concept of Normal Establishment Expenditure 8 04 Pensionary Charges Exempted Exempted Falling within the concept of Normal Establishment Expenditure 9 11 Domestic Travel Expenses Exempted Exempted Falling within the concept of Normal Establishment Expenditure 10 12 Foreign Travel Expenses Exempted Exempted Falling within the concept of Normal Establishment Expenditure 11 13 Office Expenses Exempted Exempted Falling within the concept of Normal Establishment Expenditure 12 14 Rent, Rates and Taxes for Land and Buildings Exempted Exempted Falling within the concept of Normal Establishment Expenditure 13 15 Royalty All cases To be decided on merits 14 16 Printing and Publication All cases To be decided on merits

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 15 18 Rent for others All cases To be decided on merits 16 19 Digital Equipment All cases To be decided on merits 17 21 Materials and Supplies Exempted Exempted Falling within the concept of Normal Establishment Expenditure 18 22 Arms and Ammunitions All cases To be decided on merits 19 23 Cost of Ration Exempted Exempted Falling within the concept of Normal Establishment Expenditure 20 24 Fuels and Lubricants Exempted Exempted Falling within the concept of Normal Establishment Expenditure 21 26 Advertising and Publicity All cases To be decided on merits 22 27 Minor civil and electric works Exempted Exempted Falling within the concept of Normal Establishment Expenditure 23 28 Professional Services All cases To be decided on merits

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 24 29 Repair and Maintenance Exempted Exempted Falling within the concept of Normal Establishment Expenditure 25 39 Bank and Agency Charges Exempted Exempted Falling within the concept of Normal Establishment Expenditure 26 40 Awards and Prizes All cases To be decided on merits 27 31 Grants-in-aid – General All cases Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher,subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher,subject to savings within the same section of the grant 28 32 Contribution Exempted Exempted Falling under existing exemption

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 29 33 Subsidies All cases Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher,subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher,subject to savings within the same section of the grant 30 34 Scholarships All cases To be decided on merits 31 35 Grants for creation of Capital Assets All cases Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher,subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher,subject to savings within the same section of the grant

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 32 36 Grants-in-aid – Salaries All cases Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher,subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher,subject to savings within the same section of the grant 33 37 Aid Material and Equipment All cases To be decided on merits 34 41 Secret Service Expenditure All cases To be decided on merits 35 44 Loss in Exchange Exempted Exempted Falling within the concept of Normal Establishment Expenditure

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 36 45 Interest Payments Exempted Exempted Charged Expenditure 37 49 Other Revenue Expenditure Exempted Exempted Falling within the concept of Normal Establishment Expenditure 38 51 Motor Vehicles All cases To be decided on merits 39 52 Machinery and Equipment Above ` 50 crore but not exceeding ` 100 crore, subject to savings within the same section of the grant Above ` 100 crore subject to savings within the same section of the grant Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher,subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher,subject to savings within the same section of the grant

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 40 71 Information, Computer, Telecommunications (ICT) equipment Above ` 50 crore but not exceeding ` 100 crore, subject to savings within the same section of the grant Above ` 100 crore subject to savings within the same section of the grant Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher,subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher,subject to savings within the same section of the grant 41 72 Buildings and Structures Above ` 50 crore but not exceeding ` 100 crore, subject to savings within the same section of the grant Above ` 100 crore subject to savings within the same section of the grant Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher, subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher, subject to savings within the same section of the grant

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 42 73 Infrastructural Assets Above ` 50 crore but not exceeding ` 100 crore, subject to savings within the same section of the grant Above ` 100 crore subject to savings within the same section of the grant Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher, subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher, subject to savings within the same section of the grant 43 74 Furniture & Fixtures All cases To be decided on merits 44 75 Arms and Ammunitions (Capital) Above ` 50 crore but not exceeding ` 100 crore, subject to savings within the same section of the grant Above ` 100 crore subject to savings within the same section of the grant Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher, subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher, subject to savings within the same section of the grant

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 45 76 Upgradation Procurement of Heritage Assets and n.e.c. (not elsewhere classified All cases To be decided on merits 46 77 Other Fixed Assets All cases To be decided on merits 47 78 Land Above ` 50 crore but not exceeding ` 100 crore, subject to savings within the same section of the grant Above ` 100 crore subject to savings within the same section of the grant Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher, subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher, subject to savings within the same section of the grant 48 79 Nonproduced assets other than land All cases To be decided on merits

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 49 80 Intangible Assets All cases To be decided on merits 50 54 Investment All cases Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher, subject to savings within the same section of the grant Above 20% of original appropriation (15 digit line item) or Above Rs 100 crore, whichever is higher, subject to savings within the same section of the grant 51 55 Loans and Advances All cases Upto 20% of original appropriation (15 digit line item) or Upto Rs 100 crore, whichever is higher, subject to savings within the same section of the grant Above 20% of original appropriation (15-digit line item) or Above Rs 100 crore, whichever is higher, subject to savings within the same section of the grant

Category New Service New Instrument of Service Remarks Reporting Limit Prior Approval Limit Reporting Limit Prior Approval Limit Sl. No. Object Code Object Head [Voted] Category Category Category Category 52 56 Repayment of borrowings Exempted Exempted Charged Expenditure 53 57 Subscription All cases To be decided on merits 54 60 Other Capital expenditure All cases To be decided on merits 55 43 Suspense Not Applicable Not Applicable Accounting Adjustments head 56 61 Depreciation All cases To be decided on merits 57 62 Reserves All cases To be decided on merits 58 63 Inter Account Transfers All cases To be decided on merits 59 64 Writes Off of Losses All cases To be decided on merits 60 69 Deduct Receipts Not Applicable Not Applicable Accounting Adjustments head 61 70 Deduct Recoveries Not Applicable Not Applicable Accounting Adjustments head