Rule 231 - Grant Bonds | KartavyaDesk
Original Rule Text
consultation with Internal Finance Wing. Rule 231 (2) Before a Grant is released, the members of the Executive Committee of the Grantee should be asked to Execute Bonds in a prescribed format binding themselves jointly and severally to:- (i) abide by the conditions of the Grants- in-aid by the target dates, if any, specified therein; and (ii) not to divert the Grants or entrust execution of the scheme or work concerned to another Institution(s) or Organization(s); and (iii) abide by any other conditions specified in the agreement governing the Grants-in-aid. (iv) In the event of the Grantee failing to comply with the conditions or committing breach of the conditions of the Bond, the signatories to the Bond shall be jointly and severally liable to refund to the President of India, the whole or a part amount of the Grant with interest at ten percent per annum thereon or the sum specified under the Bond. The stamp duty for this Bond shall be borne by the Government. Rule 231 (3) Execution of Bond will not apply to Quasi - Government Institutions, Central Autonomous Organisations and Institutions whose budget is approved by the Government Rule 232 General Principles for award of Grants-in-aid for Centrally Sponsored Schemes. The following principles should be kept in view by Ministries/Departments of the Central Government at the time of designing Centrally Sponsored Schemes for implementation in State Governments or Union Territories and approving and releasing assistance to State Governments or Union Territories for such schemes: - (i) Every Centrally Sponsored Scheme should haveatimebound quantifiable and measurable outcome targets with provisions for periodic monitoring, mid-term evaluation and detailed impact studies. (ii) The scheme should be designed in consultation with States and Union Territories. States should be delegated adequate powers to change the details of the schemes to suit local conditions, subject to reporting such
What This Means
Rule 231 of the General Financial Rules (GFR) 2017 focuses on ensuring accountability when government grants are given to non-governmental organizations. Specifically, it requires members of the Executive Committee of the organization receiving the grant to sign a bond before the grant money is released. This bond essentially makes them personally responsible for using the grant money correctly and adhering to the terms and conditions attached to the grant. This rule aims to protect public funds and ensure that grants are used for their intended purpose. It doesn't apply to all organizations; quasi-government institutions, central autonomous organizations, and institutions whose budgets are government-approved are exempt. This is because these types of organizations already have sufficient oversight mechanisms in place.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Executive Committee members of grant recipients must execute a bond.
- •The bond holds members jointly and severally liable for grant misuse.
- •The bond ensures adherence to grant conditions and prevents diversion of funds.
- •Failure to comply with conditions leads to refund of the grant with 10% interest.
- •Quasi-Government Institutions, Central Autonomous Organisations and Institutions whose budget is approved by the Government are exempt from this rule.
Practical Example
The Ministry of Culture approves a grant of ₹50,00,000 to 'Kalakriti Foundation', a non-profit organization, for promoting traditional Indian art forms. Before releasing the funds, the Ministry requires the five members of Kalakriti Foundation's Executive Committee (Mr. Sharma, Ms. Verma, Mr. Patel, Ms. Singh, and Mr. Kumar) to sign a bond. The bond states that they are jointly and severally responsible for ensuring the grant is used solely for the intended purpose, which is conducting workshops and exhibitions. If, later, an audit reveals that ₹10,00,000 was diverted to renovate Mr. Sharma's personal residence, all five members are liable to refund the diverted amount plus interest to the government.
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 purpose of the bond required under Rule 231?▼
What happens if the grant recipient violates the terms of the bond?▼
Does Rule 231 apply to all organizations receiving grants?▼
Who bears the cost of the stamp duty for the bond?▼
What is the prescribed format for the bond?▼
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 231 of GFR 2017, what is the interest rate applicable on the amount of the grant to be refunded if the Grantee fails to comply with the conditions of the bond?
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