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Rule 2 - Definitions | KartavyaDesk

GFR 2017

Original Rule Text

Government to administer a local fund; (xx) “Local Fund” means a local fund as defined in Rule 652 of the Treasury Rules; (xxi) “Non-recurring expenditure” means expenditure other than recurring expenditure; (xxii) “President” means the President of India; (xxiii) “Primary unit of appropriation” means a primary unit of appropriation referred to in Rule 8 of the Delegation of Financial Powers Rules; (xxiv) “Public Account” means the Public Account of India referred to in Article 266 (2) of the Constitution; (xxv) “Public Works” means civil/ electrical works including public buildings, public services, transport infrastructure etc., both original and repair works and any other project, including infrastructure which is for the use of general public; (xxvi) “Re-appropriation” means the transfer of funds from one primary unit of appropriation to another such unit; (xxvii) “Recurring expenditure” means the expenditure which is incurred at periodical intervals for the same purpose. Expenditures other than recurring expenditure are non-recurring expenditure; (xxviii) “Reserve Bank” means the Reserve Bank of India or any office or agency of the Reserve Bank of India and includes any Bank acting as the agent of the Reserve Bank of India in accordance with the provisions of the Reserve Bank of India Act, 1934 (Act II of 1934); (xxix) “Subordinate authority” means a Department of the Central Government or any authority subordinate to the President; (xxx) “Treasury Rules” means the Treasury Rules of the Central Government; (xxxi) CAPEX model: In the CAPEX Model, Capital expenditures is used by the buyer to straightway purchase goods followed by procurement of consumables, arranging comprehensive maintenance contract after warranty period and finally disposing the product after useful Rule 3 Rule 4 Rule 5 Rule 6

What This Means

Rule 2 of the General Financial Rules (GFR) 2017 is essentially a glossary. It defines various terms used throughout the GFR, ensuring everyone understands them the same way. Think of it as a dictionary specifically for government financial matters. Understanding these definitions is crucial because they dictate how financial rules are interpreted and applied in government departments. For example, knowing what constitutes 'recurring expenditure' versus 'non-recurring expenditure' directly impacts budgeting and accounting practices.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •Defines key terms used throughout the General Financial Rules (GFR) 2017.
  • •Ensures consistent interpretation and application of financial rules.
  • •Covers terms like 'Local Fund', 'Recurring Expenditure', 'Public Works', 'Re-appropriation', and 'CAPEX model'.
  • •Includes definitions referencing other important documents like the Treasury Rules and the Constitution of India.
  • •Provides clarity on the roles of the President and the Reserve Bank of India in financial matters.

Practical Example

The Ministry of Rural Development is planning to build a new rural road. According to Rule 2, this falls under the definition of 'Public Works' as it's transport infrastructure for the use of the general public. The initial construction cost of ₹5 crore is considered 'Non-recurring expenditure'. However, the annual maintenance of the road, estimated at ₹50 lakhs per year, is classified as 'Recurring expenditure'. Understanding these classifications is vital for proper budgeting and allocation of funds. If the Ministry needs to transfer ₹10 lakhs from the 'Training' budget to the 'Maintenance' budget, this is considered 'Re-appropriation' and must follow the procedures outlined in the Delegation of Financial Powers Rules.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What is the significance of defining 'Local Fund' in Rule 2?▼
The definition of 'Local Fund' is important because it determines which financial rules apply to funds managed by local bodies or authorities. This ensures accountability and proper management of public money at the local level.
Why is it important to differentiate between 'Recurring' and 'Non-recurring' expenditure?▼
This distinction is crucial for budgeting and financial planning. Recurring expenditure is predictable and needs to be budgeted for regularly, while non-recurring expenditure is a one-time expense and requires separate consideration.
What does 'Re-appropriation' mean in the context of government finances?▼
'Re-appropriation' refers to the transfer of funds from one budget head to another. This is allowed under certain circumstances but requires proper authorization and documentation to ensure transparency and accountability.
How does the definition of 'Public Works' impact project planning?▼
The definition of 'Public Works' clarifies which projects fall under this category, ensuring that they are subject to the relevant financial rules and guidelines for construction, maintenance, and procurement.
What is the CAPEX model mentioned in Rule 2?▼
The CAPEX (Capital Expenditure) model refers to a procurement approach where the government directly purchases goods, manages consumables, arranges maintenance, and handles disposal. This model contrasts with other models like OPEX (Operational Expenditure) where services are leased or rented.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Test Your Knowledge

Question 1 of 3

According to Rule 2 of the General Financial Rules, 2017, what does 'Re-appropriation' refer to?

Related Rules

Rule 271General Financial Rules 2017 (amended July 2024) - Rule 271 - Chapter 10Rule 109General Financial Rules 2017 (amended July 2024) - Rule 109Rule 146General Financial Rules 2017 (amended July 2024) - Rule 146 - Chapter 6Rule 169General Financial Rules 2017 (amended July 2024) - Rule 169 - Chapter 6Rule 215General Financial Rules 2017 (amended July 2024) - Rule 215 - Chapter 6

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