Rule 23 — GAR
Original Rule Text
23. Form of Accounts - Main Divisions of Accounts
Government accounts shall be kept: in the following three parts:-
<table><tr><td>Part 1 Consolidated Fund of India (including Union Territory Administration or of the State or Union Territory Government concerned. Part I Contingency Fund of India (including Union Territory Administration/Government) Part: III Public Account or of the: State concerned.</td></tr></table>
NOTE:- There being no separate Public Account in the case: of Union Territory Governments, the: transactions pertaining to this account shall be booked in the Public Account of the Central Government.
In part 1, namely Consolidated Fund, of the accounts, there shall be two main divisions, namely:-
() Revenue Consisting of: sections for Receipt heads (Revenue Account) and "Expenditure heads (Revenue Account). (I) Capital, Public Debt, Loans consisting of sections for Receipt heads (Capital Account), 'Expenditure heads (Capital Account), and' "Public Debt', Loans', and "Advances'.
The: first division shall comprise the section Receipt heads (Revenue Account) dealing with the proceeds of
taxation and other receipt classed as revenue, and: the Section Expenditure heads (Revenue Account) dealing with expenditure met therefrom.
The: second division shall comprise the following sections:-
(a) The Section Receipt heads (Capital Account) which deals with receipts of a Capital nature which cannot be applied as: a: set off to Capital Expenditure.
(b) The Section Expenditure heads (Capital. Account) which deals with expenditure met usually from borrowed funds with the object of increasing concrete assets of a material and permanent character. It also includes receipts of: a Capital nature intended to be applied as set off to Capital expenditure.
(c) The: Section "Public Debt Loans and. Advances, which comprise, of loans raised and: their repayments by Government such as, Internal Debt, External Debt of the Central Government, and loans and Advances made by Governments: and their recoveries; transactions relating to "Appropriation to Contingency Fund and' 'Inter-State Settlement";
In Part I1, namely Contingency Fund, of the accounts shall be recorded the transactions connected with the Contingency Fund set up by the Government of India or of a State or Union Territory Government under Article 267 of the Constitution/: Section 48 of the Union Territories Act, 1963.
What This Means
Rule 23 is one of the most fundamental rules in GAR 1990 — it defines the three-part structure of all government accounts and specifies the detailed divisions within each part. Every government receipt or payment must ultimately be classified under one of these three parts, and within the appropriate section of that part. Getting the part and section right is the bedrock of correct government accounting classification.
Part I — Consolidated Fund — contains all government revenues, borrowings, and capital expenditure. It is divided into two main divisions: (i) Revenue (with sections for revenue receipts and revenue expenditure), and (ii) Capital, Public Debt, Loans (with sections for capital receipts, capital expenditure, and Public Debt/Loans/Advances). Any expenditure or receipt from the Consolidated Fund requires Parliamentary authorization through the appropriation process.
Part II — Contingency Fund — records all transactions from the Contingency Fund established under Article 267. Part III — Public Account — covers debt, deposits, advances, remittances, and suspense accounts. Public Account transactions involve money for which the government has a liability (like provident fund deposits) or a claim to recover (like loans given), and do not require Parliamentary appropriation for each withdrawal — they are managed by the executive.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Government accounts have three parts: Consolidated Fund (Part I), Contingency Fund (Part II), and Public Account (Part III).
- 2Consolidated Fund has two divisions: Revenue (receipts and expenditure) and Capital/Public Debt/Loans.
- 3Revenue division covers current receipts (taxes, non-tax revenue) and current expenditure (met from revenue).
- 4Capital division covers capital receipts, capital expenditure (funded from borrowings for material assets), and Public Debt/Loans.
- 5Contingency Fund records only Contingency Fund transactions — one Major Head, used for emergency advance appropriations.
- 6Public Account records Debt, Deposits, Advances, Remittances, and Suspense — transactions where government is banker/trustee or has recovery claims.
- 7There is no separate Public Account for Union Territory Governments — their Public Account transactions go into the Central Public Account.
Practical Example
The Ministry of Finance receives Rs. 12,000 crore in income tax collections. This goes into Consolidated Fund of India (Part I), under the Revenue division, in the section 'Receipt heads (Revenue Account)', under the head '0020 - Corporation Tax' or '0021 - Taxes on Income other than Corporation Tax'. It is a revenue receipt.
When the Ministry of Finance releases Rs. 5,000 crore as a long-term loan to a State Government for infrastructure, this goes into Consolidated Fund of India (Part I), under the Capital/Public Debt/Loans division, in the section 'Public Debt, Loans and Advances', under the head '7601 - Loans and Advances to State Governments'. This is a capital loan, not revenue expenditure.
When a government employee's monthly GPF subscription of Rs. 10,000 is deducted, this goes into Part III — Public Account — under the head '8009 - State Provident Funds' or '8011 - Insurance and Pension Funds'. The government holds this as a trustee and will repay it on retirement — hence it is in the Public Account, not the Consolidated Fund.
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.