Rule 22 — GAR
Original Rule Text
22. Currency in which Accounts are kept
The accounts of Government shall be maintained in Indian currency i.e. rupees. All transactions of the Central and State Governments taking place in other countries shall be passed on monthly by the Indian Embassies/Missions to India and brought to account finally in: the Indian books after they have been converted into rupees.
What This Means
Rule 22 lays down a simple but fundamental principle: all government accounts must be maintained in Indian rupees. This applies to both the Central Government and State Governments without exception.
When government officials or Indian Embassies and Missions abroad incur expenditure or receive receipts in foreign currencies, those transactions are not left in foreign currency. Each month, the Embassy or Mission sends a consolidated statement of all such foreign-currency transactions back to India. Once received, these amounts are converted into rupees and recorded in the Indian books of account.
This rule ensures a single, consistent unit of account across the entire government financial system. It prevents confusion, simplifies consolidation of national accounts, and makes the government's financial statements directly comparable year over year without needing to track multiple exchange rates across different ledgers.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1All government accounts — Central and State — must be maintained exclusively in Indian rupees (INR).
- 2Transactions originating abroad (at Indian Embassies and Missions) are initially recorded in foreign currency at the point of occurrence.
- 3These foreign-currency transactions are consolidated monthly and sent to India by each Embassy or Mission.
- 4On receipt in India, the amounts are converted to rupees and entered into the Indian books of account.
- 5The conversion to rupees brings the transactions to their 'final' accounting position — foreign-currency figures are interim only.
- 6The rule applies uniformly to both Central Government and State Government transactions occurring outside India.
Practical Example
Suppose the Indian Embassy in Washington, D.C. pays rent for its chancery building in US dollars and also collects visa fees in dollars during June. At the end of June, the Embassy compiles all dollar receipts and payments, converts them to Indian rupees using the applicable exchange rate, and sends the rupee-equivalent statement to the Ministry of External Affairs in New Delhi. The Ministry then books those amounts in rupees in the Central Government's accounts. The original dollar figures do not appear anywhere in the final government ledger — only the rupee equivalent does.
Similarly, if a State Government deputes an officer to attend an international conference and the officer incurs hotel and travel expenses in euros, those expenses are reimbursed through the Mission, converted to rupees monthly, and recorded in the State's books — not as a euro-denominated liability.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
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This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.