Rule 29 — GAR
Original Rule Text
# 29. Basis of classification
As a general rule, the classification of transactions in Government accounts, shall have closer reference to the function, programme and activity of the Government and the object of the revenue or expenditure, rather than the department in which the revenue or expenditure occurs. This principle is, however, subject to such exceptions as may be authorised specially in any individual case or class of cases e.g. receipts representing 'Interest' are shown under "0049- Interest Receipts" and expenditure on the maintenance and repairs of the non-Residential buildings under the: administrative control of the Public Works Department are shown under the major head "2059- Public Works" irrespective of the functions to which they relate. Important general orders governing classification of pay and allowances including travelling allowances) of Government servants, expenditure on civil works, contributions made by or to Government, refunds of revenue, shall be issued by: Government from time lo time.
What This Means
Rule 29 establishes the primary principle for deciding where a transaction should be classified in government accounts. The guiding question is: what is the government trying to achieve with this money, and what is the nature of the receipt or expenditure? Classification should follow the function, programme, and activity of the government and the object (nature) of the money — not the name or identity of the department that is handling it.
This is a significant departure from a purely departmental approach. If the same type of expenditure (say, the cost of maintaining non-residential buildings) is handled by several departments, it should still go under the same head (2059 — Public Works) regardless of which department's staff do the physical work. Similarly, all interest receipts regardless of their source go under '0049 — Interest Receipts'. This creates consistent, function-based accounts that allow meaningful comparison across years and across governments.
However, the rule acknowledges that exceptions are necessary in some cases. The specific examples given are interest receipts (always under 0049, regardless of which department earned them) and maintenance of non-residential buildings under PWD control (always under 2059, regardless of what function the building serves). Government also issues general orders from time to time covering other recurring classification questions — such as how to classify salaries, travelling allowances, civil works, contributions to or from government, and refunds of revenue. Accounts officers should follow these standing orders when classifying such transactions.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1The primary basis for classification is the function, programme, activity, and object of the transaction — not which department handles it.
- 2The same type of receipt or expenditure should go under the same head regardless of the department involved, enabling consistent accounts.
- 3Interest receipts always go under '0049 — Interest Receipts' irrespective of which department earns them.
- 4Maintenance/repairs of non-residential buildings under PWD administrative control always go under '2059 — Public Works' regardless of the function those buildings serve.
- 5Exceptions to the functional principle are authorised by special orders for individual cases or classes of cases.
- 6General orders issued by Government govern classification of salaries, TAs, civil works, contributions, refunds of revenue, and similar recurring items.
Practical Example
The Ministry of Railways collects interest on loans it has advanced to Railway employees for house construction. A junior accounts officer proposes booking these receipts under the Railways' own revenue head. However, the senior Divisional Accounts Officer applies Rule 29: interest receipts must always be classified under '0049 — Interest Receipts', not under the departmental receipts head of Railways. This is an authorised exception that overrides the functional principle — the nature of the receipt (interest) takes precedence over the identity of the recipient department.
In another case, the Central Public Works Department carries out maintenance of a building that houses offices of the Ministry of External Affairs. The PWD accounts clerk correctly books the entire maintenance cost under major head 2059 (Public Works), even though the building functions as an external affairs facility. This is exactly the exception Rule 29 envisages — the administrative control (PWD) determines the head, not the user function (external affairs).
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.