Rule 267 - Foreign Aid Accounting | KartavyaDesk
Original Rule Text
the payment made. Office of Controller of Aid Accounts and Audit shall work out the rupee equivalent of the foreign currency payment. This rupee equivalent shall be recovered by office of Controller of Aid Accounts and Audit from the Project Implementing Agencies or State Governments which have availed of the Direct Payment Procedure. Note: In the case of Central Projects, Centrally Sponsored Projects and Public Sector or Financial Institutions, the concerned administrative Ministry or Department shall release the fund to the Project Implementing Agency with the instruction to deposit rupee equivalent of the foreign currency that have been availed of under Direct Payment Procedure by them to the account of Controller of Aid Accounts and Audit at Reserve Bank of India, New Delhi or Branch of SBI so authorised. Rule 268 (1) Fund Flow for State Projects financed from external aid source. The respective Departments of the State Government shall provide in the Budget such expenditure proposed to be incurred under Plan Schemes during the financial year by the Project Implementing Agencies. These shall be in respect of State projects to be financed from external aid sources both under loan or credit and grants and eligible for disbursement from Funding Agency under Reimbursement or Direct Payment Procedure. Rule268 (2) Fund flow for State Projects under Reimbursement Procedure. The disbursements under the “Reimbursement through Special Account” and “Reimbursement outside Special Account”, referred to in Rule 267(i), shall be consolidated at periodical intervals under each loan or credit Statewise by the office of the Controller of Aid Accounts and Audit. The details of the same shall be sent to Plan Finance Division of the Department of Expenditure in the Ministry of Finance for release of funds to the respective State Governments. The Plan Finance division of Department of Expenditure in the Ministry of Finance shall issue sanctions for actual release of the disbursement for each State. A copy of such sanction shall be endorsed to the Finance Department of the concerned State Government for information. The office of the Chief Controller of Accounts, Ministry of Finance shall issue the Inter-Government (IG) Advice to Reserve Bank of India, Central Accounts Section, Nagpur, for
What This Means
Rule 267 of the General Financial Rules (GFR) 2017 deals with how foreign aid money is managed, specifically when it's directly paid out in a foreign currency. Imagine India receives aid from another country, and that aid is used to directly pay a foreign company for goods or services related to a project. The Controller of Aid Accounts and Audit (CAA&A) steps in to figure out the rupee equivalent of that foreign currency payment. This is important because the project implementing agency (like a state government department) ultimately needs to reimburse the CAA&A in Indian rupees.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- •Deals with foreign aid payments made directly in foreign currency.
- •The Controller of Aid Accounts and Audit (CAA&A) calculates the rupee equivalent of the foreign currency payment.
- •Project Implementing Agencies (PIAs) or State Governments reimburse the CAA&A for the rupee equivalent.
- •For Central projects, the concerned Ministry/Department instructs the PIA to deposit the rupee equivalent with the CAA&A's account at the RBI or SBI.
- •Rule 268 outlines the fund flow for state projects financed by external aid sources.
Practical Example
The Ministry of Jal Shakti receives foreign aid from the World Bank for the 'Namami Gange' project. As part of this project, a German company, 'AquaTech GmbH,' is directly paid €500,000 for specialized water treatment equipment. The Office of CAA&A determines that the rupee equivalent of €500,000 is ₹4,50,00,000 (assuming an exchange rate of ₹90 per Euro). The Ministry of Jal Shakti then instructs the National Mission for Clean Ganga (NMCG), the Project Implementing Agency, to deposit ₹4,50,00,000 into the CAA&A's account at the Reserve Bank of India. This ensures that the Indian government accounts for the foreign aid received and spent in its own currency.
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 role of the Controller of Aid Accounts and Audit (CAA&A)?▼
What happens if the exchange rate fluctuates between the time of payment and the time of reimbursement?▼
Does this rule apply to all types of foreign aid?▼
What is the difference between Reimbursement through Special Account and Reimbursement outside Special Account?▼
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 267 of GFR 2017, which entity is responsible for determining the rupee equivalent of a foreign currency payment made under the Direct Payment Procedure?
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