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Rule 14 - Government Property Insurance | KartavyaDesk

DFPR 1978delegation

Original Rule Text

Rule 14: Insurance of Government property- Government property, both movable and immovable, shall not be insured and no Subordinate Authority shall undertake any liability or incur any expenditure in connection with the insurance of such property without the previous consent of the Finance Ministry, except in the cases where relaxation is provided by that Ministry from time to time.

What This Means

Rule 14 of the Delegation of Financial Powers Rules, 1978, essentially states that government property, whether it's movable like vehicles and equipment or immovable like buildings, generally cannot be insured. This means that government departments and subordinate authorities are prohibited from taking out insurance policies or spending money on insuring government assets without first getting permission from the Ministry of Finance. Think of it as a general 'no insurance' policy unless the Finance Ministry says otherwise.

The rule applies to all government departments, agencies, and subordinate authorities. It aims to centralize the decision-making process regarding insurance of government property within the Finance Ministry. This ensures a consistent and cost-effective approach to managing risk and potential losses related to government assets. The Finance Ministry may, from time to time, issue specific relaxations or guidelines allowing insurance in certain situations.

In essence, this rule is about fiscal prudence and central control. It prevents individual departments from independently deciding to insure assets, potentially leading to unnecessary expenditure or inconsistent practices. The Finance Ministry retains the authority to determine when insurance is truly necessary and cost-justified.

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

Key Points

  • •Government property (movable and immovable) generally cannot be insured.
  • •Subordinate authorities cannot incur expenses for insurance without Finance Ministry approval.
  • •The rule aims to centralize insurance decisions within the Finance Ministry.
  • •The Finance Ministry may provide relaxations to this rule from time to time.
  • •The rule promotes fiscal prudence and consistent risk management.

Practical Example

The Public Works Department (PWD) in Delhi wants to insure a newly constructed government hospital building worth ₹50 crore against fire and natural disasters. According to Rule 14, the PWD cannot directly approach an insurance company and purchase a policy. Instead, the PWD must first submit a proposal to the Ministry of Finance, justifying the need for insurance, outlining the potential risks, and providing a cost-benefit analysis. Only if the Finance Ministry grants its consent can the PWD proceed with insuring the hospital. If the PWD bypasses this process and insures the building without approval, the expenditure would be considered irregular and could lead to audit objections and disciplinary action against the responsible officers.

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

Frequently Asked Questions

What types of government property are covered under Rule 14?▼
Rule 14 covers both movable (e.g., vehicles, equipment, furniture) and immovable (e.g., buildings, land) government property.
Can a department head authorize insurance of government property in urgent situations?▼
No. Even in urgent situations, prior consent from the Finance Ministry is generally required, unless a specific relaxation has been issued by the Ministry covering such scenarios.
What happens if a department insures government property without Finance Ministry approval?▼
Such expenditure would be considered irregular and could lead to audit objections, recovery of funds, and disciplinary action against the responsible officers.
Does Rule 14 apply to autonomous bodies funded by the government?▼
The applicability to autonomous bodies depends on their specific financial regulations and the extent to which they are governed by the Delegation of Financial Powers Rules, 1978. Generally, if they receive substantial government funding and are subject to government financial rules, Rule 14 would likely apply.
Where can I find the relaxations issued by the Finance Ministry regarding insurance?▼
Relaxations are typically issued as office memoranda or circulars by the Department of Expenditure, Ministry of Finance. These are usually available on the Ministry's website or through official channels within your department.

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

Test Your Knowledge

Question 1 of 3

According to Rule 14 of the Delegation of Financial Powers Rules, 1978, which of the following statements is most accurate regarding the insurance of government property?

Related Rules

Annexure IIDFPR 2024 - Annexure IIAppendix IDFPR 2024 - Appendix IRule 20DFPR 2024 - Rule 20 - (Expenditure from or incidence of charges on contingency fund of India)Rule 10DFPR 2024 - Rule 10 - (Re-appropriation)Rule 18DFPR 2024 - Rule 18 - (Loans and advances)

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