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Rule 274 - Foreign Aid Accounting | KartavyaDesk

GFR 2017

Original Rule Text

Rule 274 Aid in form of materials and equipment. In cases where materials, equipment and other commodities, without involving any cash inflow, are received as aid from foreign countries, the Funding Agency issues an advice to the concerned Ministry or Department giving details of materials supplied along with the value thereof. The Ministry or Department concerned in turn shall intimate the details to the office of the Controller of Aid Accounts and Audit, Department of Economic Affairs for making the budget provision in regard to aid material or equipment.

What This Means

Rule 274 of the General Financial Rules (GFR) 2017 deals with how the Indian government accounts for aid received from foreign countries in the form of materials and equipment, rather than cash. Imagine a foreign government donates medical equipment or computers to a government hospital or school. This rule outlines the process for recording the value of these donations in the government's budget. It ensures transparency and proper accounting for non-cash aid.

When a foreign agency provides such aid, they inform the relevant Indian Ministry or Department about the specifics of the materials, including their estimated value. This Ministry or Department then communicates these details to the Controller of Aid Accounts and Audit, which is part of the Department of Economic Affairs. This communication is crucial so that the Controller can make the necessary budget provisions to reflect the value of the received aid. This helps in tracking the total value of aid received and ensures it's properly accounted for in government finances.

In essence, Rule 274 is about ensuring that even non-monetary aid is properly recorded and accounted for within the government's financial system. It affects all Ministries and Departments that receive such aid and the Department of Economic Affairs, which is responsible for managing and auditing aid accounts.

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

Key Points

  • •Applies to aid received as materials, equipment, or other commodities (non-cash).
  • •The Funding Agency informs the concerned Ministry/Department about the details and value of the aid.
  • •The Ministry/Department then informs the Controller of Aid Accounts and Audit (Department of Economic Affairs).
  • •The Controller of Aid Accounts and Audit makes budget provisions to account for the aid.
  • •Ensures transparency and proper accounting of non-monetary foreign aid.

Practical Example

The Japanese International Cooperation Agency (JICA) donates medical equipment worth ₹50,00,000 to the All India Institute of Medical Sciences (AIIMS), Delhi, as part of a healthcare assistance program. JICA sends an official communication to the Ministry of Health and Family Welfare, detailing the equipment and its value.

The Ministry of Health and Family Welfare, upon receiving this information, promptly informs the office of the Controller of Aid Accounts and Audit, Department of Economic Affairs. The Controller then makes the necessary adjustments in the budget to reflect the ₹50,00,000 worth of medical equipment received as aid. This ensures that the aid is properly accounted for and tracked within the government's financial records.

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

Frequently Asked Questions

What happens if the value of the aid is not clearly stated by the Funding Agency?▼
The concerned Ministry/Department would need to assess the fair market value of the materials/equipment received and communicate that value to the Controller of Aid Accounts and Audit.
Does this rule apply to aid received from NGOs?▼
Rule 274 specifically addresses aid received from foreign countries. Aid from NGOs, whether domestic or international, is governed by other relevant rules and regulations.
Who is responsible for ensuring the aid is used for its intended purpose?▼
The concerned Ministry/Department receiving the aid is responsible for ensuring that the materials and equipment are used for the purpose for which they were provided. This is separate from the accounting aspect covered by Rule 274.
What documentation is required when reporting the aid to the Controller of Aid Accounts and Audit?▼
The documentation typically includes the communication from the Funding Agency detailing the aid, a description of the materials/equipment received, their estimated value, and any relevant agreements or memoranda of understanding.
Is there a specific format for reporting the aid details to the Controller of Aid Accounts and Audit?▼
While there might not be a rigidly prescribed format, the reporting should be clear, comprehensive, and include all essential details as outlined in the rule and any related circulars or guidelines issued by the Department of Economic Affairs.

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 274 of GFR 2017, when a foreign country provides aid in the form of equipment, which entity is primarily responsible for informing the Controller of Aid Accounts and Audit?

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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