Rule 115 — GFR

Rule 115 The following principles shall be generally observed in dealing with claims preferred by State Governments under Clause (3) of Article 258 of the Constitution: —

(i) If the agency work involves the employment of a State Commercial Department, it would be open to that department to charge its normal commercial costs.

(ii) Public Works Department agency costs shall be represented by such percentage charges on the cost of Central Works executed by the State as may be agreed between the Central and the State Government concerned, works outlay being treated as an amount placed at the disposal of the State Government for actual expenditure on the execution of the work.

(iii) The cost of regular joint establishment shall be shared as far as practicable on the basis of fixed annual sums settled in agreement with the State Government concerned.

(iv) In other cases, the following procedure shall be adopted unless there are special orders to the contrary: -

(a) Details of claims preferred by State Governments shall be ascertained.

(b) If the work has been performed by the State Government in the past, the charges shall be compared with those charged in the past but it is not necessary to be meticulous in the matter.

(c) If the charges are found to be reasonable and do not exceed Rupees Fifty thousand per annum for any individual item (or connected group of items), a five years contract shall be offered to the State Government during which the Central Government would pay the fixed sum per annum for the work. The amount will be subjected to review at the end of each period of five years.

(d) If the amount agreed upon exceeds Rupees Fifty thousand, it shall be necessary to have an annual statement of proposed charges from the State Government at the time of preparation of the Budget. However, if in any individual case, the charges are obviously static, then the contract system may be adopted in these cases also.

(v) In exceptional cases in which arbitration has to be resorted to, the Ministry of Finance will make the requisite arrangement in the matter.

(vi) The Ministry of Finance shall be consulted on all matters arising under Article 258 (3) of the Constitution.