Rule 5 — GAR
Original Rule Text
5. There may be: some schemes/programmes in which constitution of a fund in the public account may also be involved. If the relevant sanction of the Ministry releasing fund relating to such a: scheme does not indicate the head
(s) of account to be operated upon in the public account portion etc. of the State/Union Territory Government, the Controller General of Accounts, Ministry of Finance (Department of Expenditure) may be approached for the purpose of indicating necessary major/minor head: of account in the interest of uniformity of classification.
<table><tr><td>Headi in Central Govt. BudgetiSanction letter Corresponding heads in: State Govt. books from which expenditure is tot be incurred SI Major Sub-major Minor head Purpose Sub-head Major head Sub-major Minor head Sub-head No. Head head head 2 3 4 5 6 7 B 9 10</td></tr></table>
<table><tr><td>- 7601- 03-Loans Housing- Grants-in aid to Construction of 2216- Housing General Assistance to Grants for Loans & for Central General- Housing residential Housing Construction of Advances Plan Assistance to Boards, Buildngs. Boards, affiiated to: State Schemes. Housing Corporations Corporation, Colleges Govt. Boards, etc. Corporations, etc. 2. Do. Do. Capital outlay Meantf for Do. 4216- Capital 03-Rural Subsidised (Place name to on other direct Outlay on Housing Housing beg given) Housing investment by Housing Schemes. Scheme for Schemes the: State Govt. Plantation Subsidised, workers. Housing Scheme for Plantation workers. 3. 7601- 03-Loans Loans for Meant for Loans to 6216-Loans Loans to Loans to Loans & for Central Housing-Loans relending by Name oft the for Housing. Housing (aam oft the Advances Plan to Housing State Govt. to board tot be Boards. to tos State Schemes. Boards, Housing indicated) Housing bei indicated.) board Govt. Corporations, Society. etc. 4 Do. Do. University a Forr release of Construction of 2202- General University Assistance to Grants for Other Higher grant-i aid to Hostels of Education. & Other Non-Govt. construction of Education- non-Govt affilited Higher Coleges & affiiated Assistance To Colegee as Colleges Educatio. institutes Colleges Non-Govt Revenue Colleges. Expendiurre by State Govt. 5. Do. Do. Capital Outlay Investment Construction of 4202-Capital Nil University & Buildings on Education hostels of Outlay 1on Higher Equipments. Sports Arta and affilited Education, Education. Culture Colleges Sports: and University & Cuiture Higher Education. 6. 7601- 03-Loans Loans for Forr relending Loans for 6202-Loans Ni University & Loans for Loans & for Central Education State Govt. Construction of for Education, Higher Construction of Advances Plan Sports, Art: and Ey Non-Govt. hostels of Sports Arts Education. hostels of lo State Schemes. Culture Colegges affilited Cuturr. affiiiatdd Govts. University & Colleges Coleege Name Higher ofs the loan Education. College. 7. Do. Do. Cooperation- Grants in aid by Grants for Credit 2425-Co Assistance to Grants for Credit Assistances o State Govts. to Co-operative operation. Credit Co cooperative Credit Credt coop. Institutions in operatives. Institutions in Cooperatives. underdeveloped underdeveloped States States. B. 7601- 03- Loans Loans for Forr relending Loans to Credit 6425-Loans Loans to Loans for Credit Loans & for Central Cooperation- Cooperatives for Co- Credit Co-operative Advances Plan Credit Co- Institutions in operatves, Cooperatives- Institutions for to: State Scheme operatives. underdeveloped under developed Govts, States States. 9. Do. Do. Capital Outlay Investmenti in Investmenti in 4425-Capital Investmenti in Investment in- - and Credt Co- outlay on Co- Credit Co Cooperation in operatives by operation operatives. Credit Co- States. operatives. 10 Do. 04-Loans Vilages & Small Grant-i--id to Management 2851-Village & NiI Management for Industries meet working Operation & Smal Operation & Centrally Separate minor expenses of maintenance. industries. Maintenance. Sponsored head for each Departmental Plan departmental Commercial Schemes. Commercial Undertakings Under-taking) relating to SSI 11. 7601- 04-Loans Capital Outlay Capital Integrated 4851-Capital Small Scale Integrated Loans & for oon Village & Expendiurre by Training Centres. Outlay on Industries. Training Centres. Advances Centralyy Smail Industries State Govt. Vilage & to State Sponsored Smail Scale Smai Govts. Ptan industries. Industries. Schemes.</td></tr></table>
What This Means
Rule 5 addresses the classification of Central Government grants and loans in State or Union Territory Government books. When the Central Government releases funds to a State — whether as a grant-in-aid, capital outlay, or loan — the State must record these in its own accounts using the correct corresponding account head. This ensures that both the Central books (where expenditure is debited) and State books (where receipt is credited) use consistent classification.
The rule recognizes that some Central schemes involve a Public Account component in the State's books (for example, a fund established alongside the grant). If the Central sanction order does not specify which head to use in the Public Account portion, the State or UT Government can approach the CGA for guidance to ensure uniformity of classification across States.
This rule is accompanied by an illustrative Annexure that gives 15 examples showing how various Central heads (Housing, Education, Cooperation, Dairy Development, etc.) map to corresponding State heads. This guidance is essential for DDOs and accounts officers who receive Central funds and must correctly classify them in their books.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1States and UTs must record Central grants and loans under corresponding account heads in their own books.
- 2The Central sanction letter should ideally specify the account heads to be used in both Central and State books.
- 3If a sanction involves a Public Account component in State books and the head is not specified, the CGA should be approached for guidance.
- 4Uniformity of classification across all States receiving similar Central funds is important for meaningful consolidated accounts.
- 5The Annexure to Rule 5 provides 15 worked examples covering Housing, Education, Cooperation, Dairy Development, and other sectors.
- 6Grant-in-aid, capital outlay, and loans each have different corresponding heads in State books.
Practical Example
The Ministry of Rural Development releases Rs. 500 crore to the Government of Rajasthan under the Pradhan Mantri Awaas Yojana as a grant-in-aid. In the Central books, this is booked under Major Head 2216 - Housing - Grants. In the Rajasthan Government's books, the receipt should be booked under the corresponding grant head for housing under the State's budget. The accounts officer in Rajasthan must match the head to the one specified in the Ministry's sanction letter.
If the sanction involves both a grant component and a revolving fund in the Public Account of Rajasthan, but the sanction letter only mentions the grant head, the State Finance Department should write to the CGA to clarify the correct head for the Public Account portion. This prevents Rajasthan from using a different head than, say, Madhya Pradesh receiving the same scheme funds, which would make Central consolidation of accounts difficult.
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.