3. Articles of the Constitution etc. to be kept in view in devising the form of accounts
The: form of accounts of the Union, States and Union Territory Governments: shall be devised keeping in view the provisions of various articles of the Constitution and Sections of Union Territories Act, 1963, andi in particular, of those indicated andi reproduced in Appendix Ito these rules.
NOTE:- According to article 150 of the Constitution, the: form in which the accounts of the Union and of the states shall be kept is to be prescribed by the President on the advice of the Comptroller. and Auditor General of India. This function is exercised by the Controller General of Accounts, Ministry of Finance (Department of Expenditure) on behalf of the President of India. The duties assigned to the Controller General of Accounts are contained in Appendix 2 to these rules. The duties and powers of the Comptroller and. Auditor General of India are contained in the Comptroller and Auditor General's (Duties, Powers and Conditions of: Service) Act of 1971 (No. 56 of 1971) Sections 10, 11 and: 22 of the Act (as amended from time to time) have: been reproduced in Appendix 31 to these rules. The orders issued by the President of India in exercise of the powers conferred by the first proviso to sub-section (1) of section 10 and first proviso to section 11 of the said Act after consultation with the Comptroller and Auditor General of India: are: also included in. Appendix 3 to these rules.
3. Consolidation of monthly Civil Accounts of the Union Government from the monthly accounts submitted to him by various Ministries and Departments has also been entrusted to him with effect from 1st April, 1977. Further, the responsibility for preparation of annual accounts including Summary Civil Appropriation Accounts showing under: the respective heads, the annual receipts and disbursements for the purpose of the Union Government has been entrusted to him, relieving the Comptroller: and. Auditor General of India of the responsibility in consultation with him under Section 11 of Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971, vide Ministry of Finance order No. 1 (12)-B (AC)/78 dated the 20th June. 1978.
ANNEXURE 'A' NOTIFICATION NO. CD-896/80
# DEPARTMENT OF EXPENDITURE (VYAYA VIBHAG)-
(a) entry 5 shall be omitted;
(b) for entry 7A, the following entry: shall be substituted namely: "7A. Organisation of the Controller General of. Accounts dealing with
( General principles of Government accounting relating to Union or State Governments and form of accounts, and to frame or revise rules and manuals relating thereto;
What This Means
Rule 3 establishes the constitutional foundation for government accounting. It mandates that the form of accounts for the Union, States, and Union Territory Governments must be designed keeping in view specific provisions of the Constitution of India and the Union Territories Act, 1963. These constitutional provisions — particularly Article 266, 267, and 283 — define the three constitutional funds and lay down how government money must be managed.
The rule's note clarifies the institutional arrangement: under Article 150 of the Constitution, the President prescribes the form of accounts on the advice of the CAG. In practice, this power is exercised by the CGA on behalf of the President. Appendix 1 to GAR 1990 reproduces the relevant constitutional articles, while Appendix 2 details the CGA's duties and Appendix 3 covers the CAG's statutory powers under the CAG (DPC) Act 1971.
This rule is foundational — it means no ministry or department can unilaterally decide how to structure its accounts. All accounting forms must conform to constitutional requirements as interpreted and prescribed by the CGA on the advice of the CAG. Any deviation requires formal authorization at the highest level.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
1The form of government accounts must conform to constitutional provisions, particularly Articles 150, 266, 267, and 283.
2Under Article 150, the President prescribes the form of accounts on CAG's advice. In practice, this is done by the CGA.
3The CGA exercises the President's function of prescribing account forms on behalf of the President.
4Appendices 1, 2, and 3 to GAR 1990 contain the relevant constitutional articles, CGA's duties, and CAG's statutory powers respectively.
5The CAG's responsibilities for compiling accounts can be transferred to departmental accounting authorities by Presidential order under Section 10 of the CAG (DPC) Act 1971.
6Monthly Civil Accounts of the Union Government are consolidated by the CGA.
7Annual accounts preparation (including Summary Civil Appropriation Accounts) is the responsibility of the CGA for Union Government.
Practical Example
When the Ministry of Jal Shakti wants to introduce a new sub-head of account for 'Water Meter Subsidies under PM-KUSUM', the proposal must flow through the CGA's office. The CGA, acting on behalf of the President and in consultation with the CAG, either approves the new account head or asks for modification to ensure it fits the constitutional framework. The ministry cannot simply create this head on its own.
In a State like Maharashtra, the Accountant General's office prepares the annual accounts and appropriation accounts for submission to the Governor. This process is governed by Section 11 of the CAG (DPC) Act 1971, which is reproduced in Appendix 3 to GAR 1990. The Accountant General cannot deviate from the prescribed forms even if the State Finance Department requests a different presentation.
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.
(i) Reconciliation of cash balances of Union Government with Reserve Bank in general and, in particular, of Reserve Bank Deposits pertaining to Civil Ministries or Departments;
(ii) Overseeing the maintenance of adequate standards of accounting by Central Civil Accounts Offices;
(iv) Consolidation of monthly accounts, preparation of review of trends of revenue realisation and significant features of expenditure etc. and preparation of annual accounts (including Summary Civil Appropriation Accounts) showing under the respective heads, the: annual receipts and disbursements for: the purpose of the Union Government;
(v) Administration of Central Treasury Rules;
(vi) Co-ordination and assistance in the introduction of management accounting system in Civil Ministries or Departments;
(vil) Cadre: Management of Group 'A' (Indian Civil Accounts Service) and Group 'B' Officers of the Central Accounts Offices; and
(vill) Organising of training and examination for the Central Civil Accounts Staff belonging to Group "C and "D'
# APPENDIX 3
(See
Note under rule3))
Sections 10, 11 and 22 of the C&AG's (Duties, Powers and Conditions of Service) Act, 1971, and orders issued by the President in exercise of the powers conferred by: sub-section 1 of section 10: and first proviso to section 11 thereof
Section 10.- - Comptroller and Auditor General to compile accounts of Union and States.
(1) The Comptroller and. Auditor General shall be responsible-
(a) for compiling the accounts of the Union and of each State from the initial and subsidiary accounts rendered to the: audit and accounts offices under his control by treasuries, offices or departments responsible fort the keeping of such: accounts; and
(b) for keeping such accounts in relation to any of the matters specified in clause
(a) as may be necessary;
Provided that the President may, after consultation with the Comptroller and. Auditor General, by order, relieve him from the responsibility: for compiling-
0 the said accounts of the Union (either at once or gradually by the issue of: several orders); or
(i) the: accounts of any particular services or departments of the Union;
Provided: further that the Governor of: a State with the previous approval of the President and after consultation with Comptroller and. Auditor General, by order, relieve him from the responsibility for compiling-
0 the: said accounts of the State (either at once: or gradually by the issue of several orders); or
(i) the: accounts of any particular services or departments of the State;
Provided also that the President may, after consultation with the Comptroller and. Auditor General, by order, relieve him from the responsibility for keeping the accounts of any particular class or character.
(2) Where, under: any arrangement, a person other than the Comptroller and: Auditor General has, before the commencement of this Act, been responsible-
( for compiling the accounts of any: particular service or department of the Union or of a State, or
(i) for keeping the accounts of any particular class or character, such arrangement shall, notwithstanding anything contained in subsection (1), continue to be in force unless, after consultation with the Comptroller: and. Auditor General, it is revoked in the case referred to in clause (), by: an order of the President or the Governor of the State, as the case may: be, and in the case referred to in clause
(i) by: an order of the President.
Section 11-Comptroller and Auditor General to prepare and submit accounts to the President, Governors of State and Administrators of Union Territories having Legislative Assemblies
The Comptroller and Auditor General shall, from: the accounts compiled by him or by the Government or any other person responsible in that behalf prepare in each year accounts (including, in the case of accounts compiled by him, appropriation accounts) showing under the respective heads the annual receipts and disbursements fort the purpose of the Union, of each State and of each Union territory having a Legislative Assembly, and shall submit those accounts to the President or the Governor of a State or Administrators of the Union Territory having a Legislative Assembly, as the case may be, on or before such dates, as he may, with the concurrence of the Government concerned, determine:
Provided that the President may, after consultation with the Comptroller and Auditor General, by order, relieve him from the responsibility for the preparation and submission of the accounts relating to annual receipts and disbursements fort the purpose of the Union or of a Union Territory having a Legislative Assembly:
Provided: further that the Governor of: a: State may. with the previous approval of the President: and after consultation with the Comptroller and Auditor General, by order relieve him from the responsibility for the preparation and: submission of the accounts relating to annual receipts and disbursements for the purpose of the: State.
Section 22- Power to make rules
(1) The Central Government may, after consultation with the Comptroller and Auditor General, by notification in the Official Gazette, make rules for carrying out the provisions of this Act in so far: as they relate to the maintenance of accounts.
(2) In particular, and without prejudice to: the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:-
(a) the manner in which initial and subsidiary accounts shall be kept by the treasuries, offices and departments rendering accounts to audit and accounts offices;
(b) the manner in which the accounts of the Union or of: a State or of any particular service or department or of any particular class or character, in respect of which the Comptroller: and Auditor General has been relieved from the responsibility of compiling or keeping the accounts, shall be compiled or kept;
(c) the manner in which the: accounts of: stores and stock shall be kept in any: office or department of the Union or of a: State, as the case may: be;
(d) any: other matter which is required to be, or may be, prescribed by rules.
(3) Every rule made under this section shall be laid, as soon as may be after it is made, before each House of Parliament, while tt is in session, for: a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the: session immediately following the session or the successive sessions aforesaid both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect onlyi in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of: anything previously done under that rule.
Orders issued by the PRESIDENT of India in exercise of the powers conferred by the first proviso to sub-section (1) of Section 10 and first proviso to section 11 of the C.A.G.'s (Duties, Powers and Conditions of Service) Act, 1971.
I. Copy of Order No. F. ! (15)-B (A/cs) /76 dated 6th March, 1976 Issued by the Government of India, Ministry of Finance (Department of Economic Affairs).
In exercise of the powers conferred by the first proviso to subsection (1) of: section 10 of the Comptroller and
Auditor General's (Duties, Powers and Conditions of Service) Act, 1971 (56 of 1971), the President, after consultation with the Comptroller and. Auditor General, hereby relieves the Comptroller and Auditor General from the responsibility for compiling the accounts of the Ministry of Industry, and Civil Supplies, the Ministry of Tourism and Civil Aviation and the Ministry of Communications, other than the Directorate of Posts and Telegraphs.
3. Approval for the plan outlay under various schemes and also sanctions issued by the Central Ministiis/DDearrmeett releasing grants-in-aid and/or loans, will indicate the budget head/head of the: account upto minor head designed as above and: also sub-detailed heads to which the expenditure is debitable in central books. The nomenclature of the minor head mentioned in the sanctions etc. would automatically provide necessary clue in regard to the major/sub-major and minor heads under which corresponding provisions should be budgeted for: and expenditure accounted for in State/Union Territory Government books, and the sub/detailed heads mentioned in such sanctions would provide clue to similar heads to be opened in State/Union Territory Government books.
3. The following rule govern thei incidence of the cost of troops lent to civil departments of the Central Government and to State Government. The words' Military and Troops' are used to include Indian Navy and Air-Force as well as Army.
(1) When troops are required on duties of a Military' nature (e.g.) Ceremonial purpose and provision of escort on guards of honour in circumstances not covered byi instruction No. 755 of the Regulations for the Army in India (1962 Edition) and flag marches when they fall into the category of cases involving duties of military nature and when they are not connected with the maintenance of law: and order, the extra cost, if any of supplying the: services required (e.g. in the way of transport, equipment etc.) will be met by a contribution from the State or the Civil Department concerned of the Central Government, to the Defence Services Estimates.
Note. - The: cases in which flag marches come within the scope of this rule will be decided by the Central Government.
(2)(1) The types of duties that. Armed Forces may be called upon to perform in aid of Civil Authorities are: as follows:-
(a) Maintenance of law: and order.
(b) Maintenance of essential Services.
(c) Assistance during natural and other calamities such as earthquakes, floods, fire and famine.
(d). Assistance required in the execution of development projects.
(e). Any other types of assistance which may be needed by the Civil authorities and which the Armed Forces are in a position to render.
(2) For: maintenance of law. and order vide
(a) in rule: 2 (1) above, all expenditure will be borne by the Central Government but the State Government may contribute towards the cost, if they wish to do: so.
(3) For maintenance of essential services, for assistance during natural calamities and assistance in the execution of development projects, vide
(b) to
(d) in rule: 2 (1) above, no recoveries will be made from the State Governmen//Union Territory. Administration on account of:-
(a) Normal pay: and allowances and rations for: service personnel of the Unit which may be made available from: within the Order of Battle. However, in cases where additional units are maintained by retaining the Units due for disbandment or by raising new Units specifically to meet the requirements of state Governments/Union Territories, the entire cost of these units will be charged.
(b). All other expenditure like the cost of payment for consumable stores including pay: and allowances will be charged.
(c) For non-consumable stores and equipment:
0 Depreciation assessed on the replacement cost on account of wear and tear. For. Aircraft, depreciation will be calculated on the original cost.
(i)) Cost of repairs and maintenance.
(ii Cost of replacement of equipment rendered unserviceable. assessed on its condition before use. In the case of aircraft, normal strike off wastage element will be charged.
(d) Incidental expenditure, e.g. cost of move of Units, Personnel and equipment to and from the site of work andi extra allowances, rations, clothing and amenities will be charged where provided.
(e) Hospitalisation and treatment of the: service personnel injured whilst employed in rendering aid will be charged.
(0) Pensionary liability in respect of any: troops while employed in aid of civil authorities will be that of Government of India. Damages to crops or compensation payable to civilians would be the responsibility of the State Government.
(g). Assistance rendered by Armed Force for extinguishing fire will be governed by the principles laid down in the Ministry of Defence letter No. F. 256/51/D (15) dated 18th April, '55 as amplified letter dated 18th May, 1959.
(h) Non-consumable stores and equipment issued in the circumstances detailed in para 2 (3) above, the depreciation rate will be calculated by dividing the Price Vocabulary rates plus 25% by the life of the item in use. Additional packing and Transportation charges, cost of repairs and maintenance charges, cost of stores issued: for repair will be paid by Civil authorities.
( Cost of replacing items of personal kit/clothing rendered unserviceable or lost accidentally due to no fault of an individual while employed in aid during natural calamities will be met by the State Government if classified by the Survey Board on termination of aid.
( In the case of Indents for equipment on loan: for a period of over: six months, the issue will be only on payment and not on loan.
(k) No departmental charges will be levied over and above the cost of replacement of Equipment and stores rendered unserviceable during rendition of aid during flood, relief operations and other natural calamities.
()) Recoveries of hire charges in respect of stores other than ordnance stores will be made as follows:-
( Tools & Plant. Engineering Stores
Hire charges will bei based on para 943 of M E S Regulations. For items not covered by: above para, the charges will be fixed in consultation with the Ministry of Defence (Finance.)
(i) MT Vehicles
Recovery will be made at normal rates in accordance with Army Instruction No. 928 of 1945: as amended from: time to time. In the case of items not covered by this, the hire charges will be fixed in consultation with the Ministry of Defence (Finance).
(4) For any other type of Assistance, vide item
(e) in rule 2 (1) above
(a) The: complete cost of Armed Forces including ordinary pay and allowances, cost of transport of equipment including loss, repair etc. and extra-ordinary charges in the shape of special pay: or transportation of stores will be recovered.
(b) The recoveries in respect of stores equipment or vehicles issued in connection with aid to civil authorities will include hire charges for: stores, equipment or vehicles assessed as per
normal rules and expenditure incurred on transportation handling etc. charges.
(c) The depreciation charges in case of ordnance stores will be calculated on the basis of Price Vocabulary rates plus 50% divided by life of the items in use, expressed in months.
(d) The recoveries of hire charges in respect of stores other than ordnance stores will be made on the lines laid down in rule 2 (3) (1) above.
(e) In the case of assistance rendered by Indian Navy: to civil Ministries etc. or the loan on hire of Naval Yard Craft, equipment, tools etc. the depreciation charges will be calculated as under:-
0 In: terms of para 1
(b) of the Ministry of Defence letter No. Dy/0201/IHO/S- 11/3152/D (N-I) dated 21-11-1959 and 3620/D (N-I) dated 17th September 77: as amended from time to time for loan on hire of Naval Yard Craft, equipment tools etc; and
(i) for: assistance rendered by Indian Navy Ship, in terms of Ministry of Defence letter No.. AC/3977/8 (2) NHQ/1951/ DO IIVDL. II dated: 26th December 80 as amended from time to time.
(I) In the event of difference of opinion as to: the: actual method of calculating the charges payable by State Government, the decision of the Government of India will be final.