Rule 229 — GFR

Rule 229 General Principles for setting up of Autonomous Organisations referred to under Rule 228(a): -

(i) No new autonomous institutions should be created by Ministries or Departments without the approval of the Cabinet.

(ii) No new autonomous institution should be created by an Autonomous Body itself, the appraisal/approval process for creation of new autonomous bodies would apply in such cases too. However, Regional Centres/Offices/Sub-Stations of any autonomous body can be created with prior approval of the administrative ministry in consultation with Ministry of Finance.

(iii) Stringent criteria should be followed for setting up of new autonomous organisations and the type of activities to be undertaken by them. The Ministry or Department should examine in detail:

(a) whether the activities proposed to be taken up are necessary at all;

(b) whether these activities, if necessary, need to be undertaken by setting up an autonomous organisation only or whether these could be performed by the concerned Government agency or any other organisation already existing.

(iv) All autonomous organisations, new or already in existence should be encouraged to maximise generation of internal resources and eventually attain self-sufficiency.

(v) The Ministry or Department may consider creating a Corpus Fund for an Autonomous Body only with prior concurrence of Ministry of Finance if the corpus is created out of budgetary allocation. If the corpus is created out of internal accruals of the body, approval of the administrative Ministry must be obtained.

(vi) User Charges: Governing Body of the Autonomous Body shall review user charges/ sources of internal revenue generation at least once a year and inform the administrative Ministry. This exercise should preferably be completed before the formulation of Union Annual Budget.

(vii) All Autonomous Bodies should maintain database relating to grants, income, expenditure, investment assets and employee strength in the format prescribed by the Department of Expenditure, Ministry of Finance.

(viii) Financial advice for Autonomous Bodies: Every autonomous organisation should designate an officer at appropriate level to render financial advice whose concurrence should be obtained for sanction and incurring of expenditure. The financial limits up to which such concurrence is mandatory may be drawn up by each organisation. The Chief Executive Officer of the Autonomous body will be responsible for overall financial management of the autonomous bodies.

(ix) Peer review of autonomous organisations: Ministry shall put in place a system of external or internal peer review of autonomous organisations every three or five years depending on the size and nature of activity. Such a review should be the responsibility of the concerned administrative division of the Ministry/Department and should focus, inter alia, on;

(a) the objective for which the autonomous organisation was set up and whether these objectives have been or are being achieved;

(b) whether the activities should be continued at all, either because they are no longer relevant or have been completed or if there has been a substantial failure in achievement of objectives.

(c) whether the nature of the activities is such that these need to be performed only by an autonomous organisation.

(d) whether similar functions are also being undertaken by other organisations, be it in the Central Government or State Governments or the Private Sector, and if so, whether there is scope for merging or winding up the organisations under review.

(e) whether the total staff complement, particularly at the support level, is kept at a minimum: whether the enormous strides in information technology and communication facilities as also facilities for outsourcing of work on a contract basis, have been taken into account in determining staff strength; and whether scientific or technical personnel are being deployed on functions which could well be carried out by non-scientific or non- technical personnel etc.

(f) whether user charges including overhead/ institutional charges / management fee in respect of sponsored projects, wherever the output or benefit of services are utilised by others, are levied at appropriate rates

(g) the scope for maximizing internal resources generation in the organization so that the dependence upon Government budgetary support is minimised.

(x) An organisation whose performance is found to be outstanding and internationally acclaimed as a result of the review envisaged under Para

(ix) above should be granted greater autonomy and increased flexibility in matters of recruitment and financial rules thereby enabling it to devise and adopt staff structures, procedures and rules suited to improving their productivity.

(xi) Autonomous organisations as also others with a budgetary support of more than Rupees five crores per annum, should be required to enter in to a Memorandum of Understanding with the Administrative Ministry or Department, spelling out clearly performance parameters, output targets in terms of details of programme of work and qualitative improvement in output, along with commensurate input requirements. The output targets, given in measurable units of performance, should form the basis of budgetary support extended to these organisations. The roadmap for improved performance with clear milestones should form part of the MoU.

(xii) Findings of the peer review should be examined and put up for appropriate decision to the Secretary by the concerned programme division of the Administrative Department. Further releases of Grant (after three or five years, as the case may be), should be made conditional on conduct and decisions on the findings of such peer review.