Rule 21 - Financial Prudence
Original Rule Text
Rule 21 (2) Every authority having the power to refund fines shall ensure that the refunds are checked and no double refunds of amounts of fines collected or refunds of fines not actually paid into a treasury or bank as the case may be, are made GENERAL PRINCIPLES RELATING TO EXPENDITURE AND PAYMENT OF MONEY Standards of financial propriety. Every officer incurring or authorizing expenditure from public moneys should be guided by high standards of financial propriety. Every officer should also enforce financial order and strict Miscellaneous Demands. Accounts Officers shall watch the realization of miscellaneous demands of Government, not falling under the ordinary revenue administration, such as contributions from State Governments, Local Funds, contractors and others towards establishment charges. Remission of Revenue. A claim to revenue shall not be remitted or abandoned save with the sanction of the competent authority. (1) Subject to any general or special orders issued by the Government Departments of the Central Government, Administrators and Heads of Departments, other than those in the Department of Posts, shall submit annually on the 1st of June to the Audit Officer and the Accounts Officer concerned, statements showing the remissions of revenue and abandonment of claims to revenue sanctioned during the preceding year by competent authorities in exercise of the discretionary powers vested in them otherwise than by law or rule having the force of law, provided that individual remissions below Rupees one thousand need not be included in the statements. (2)For inclusion in the statements referred to in Rule 19 (1) above, remissions and abandonments should be classified broadly with reference to the grounds on which they were sanctioned and a total figure should be given for each class. A brief explanation of the circumstances leading to the remission should be added in the case of each class. Departments of the Central Government and Administrators may make rules defining remissions and abandonments of revenue for the purpose of Rule 19 above. economy and see that all relevant financial rules and regulations are observed, by his own office and by subordinate disbursing officers. Among the principles on which emphasis is generally laid are the following:-
(i) Every officer is expected to exercise the same vigilance in respect of expenditure incurred from public moneys as a person of ordinary prudence would exercise in respect of expenditure of his own money.
(ii) The expenditure should not be prima facie more than the occasion demands.
(iii) No authority should exercise its powers of sanctioning expenditure to pass an order which will be directly or indirectly to its own advantage.
(iv) Expenditure from public moneys should not be incurred for the benefit of a particular person or a section of the people, unless –
(a) a claim for the amount could be enforced in a Court of Law, or
(b) the expenditure is in pursuance of a recognized policy or custom.
What This Means
Rule 21 of the General Financial Rules (GFR), 2017, emphasizes the importance of financial prudence and accountability for every government officer. It essentially states that each officer is responsible for ensuring that public funds are spent wisely and in accordance with established rules and regulations. This responsibility extends not only to their own actions but also to the actions of subordinate officers who are disbursing funds. Think of it as spending taxpayer money as carefully as you would spend your own.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Every officer must exercise the same vigilance in spending public money as they would their own.
- 2Expenditure should be reasonable and proportionate to the need.
- 3No officer should use their sanctioning power for personal gain.
- 4Public funds should not be used for the benefit of specific individuals or groups unless legally required or part of a recognized policy.
- 5Financial rules and regulations must be strictly observed.
Practical Example
Mr. Sharma, a Section Officer in the Ministry of Culture, is responsible for approving travel expenses for artists participating in a government-sponsored festival. He receives a bill for ₹50,000 for a single artist's airfare, which seems unusually high. Applying Rule 21, Mr. Sharma investigates further and discovers that the artist booked a first-class ticket when economy class was sufficient and permissible under the rules. He rejects the inflated bill and approves only the amount equivalent to an economy class ticket, ensuring that public funds are used responsibly and in accordance with the rules. If he had approved the first class ticket without question, he would have violated Rule 21.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Cross References
Frequently Asked Questions
What does 'vigilance' mean in the context of Rule 21?▼
What happens if I violate Rule 21?▼
Does Rule 21 apply only to senior officers?▼
If a policy allows for certain expenditure, does that automatically mean it's compliant with Rule 21?▼
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 21 of GFR 2017, what level of vigilance should a government officer exercise when spending public money?