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Rule 47 - Dividend Payments | KartavyaDesk

GFR 2017

Original Rule Text

not be delayed and must be paid within an appropriate time frame immediately after the decision on dividend is taken in the AGM. Ministries or Departments shall monitor timely payments of dividends and profits. The dividend shall be payable as per the guidelines issued by DIPAM in this regard. Rule 49 Receipts Portal. The Government has provided a public portal for online collection of various non-tax revenues including various fees and user charges through e- Receipts. All Ministries/Departments, shall take prompt measures for migration to eReceipts, to ensure customer convenience and immediate credit of receipts to the Government account. Rule 50 (1) Expenditure estimates. The expenditure estimates shall show separately the sums required to meet the expenditure Charged on the Consolidated Fund under Article 112 (3) of the Constitution and sums required to meet other expenditure for which a vote of the Lok Sabha is required under Article 113(2) of the Constitution. Rule 50 (2) The estimates shall also distinguish provisions for expenditure on revenue account from capital account, including on loans by the Government and for repayment of loans, treasury bills, cash management bills and ways and means advances. Rule 50 (3) The detailed estimates of expenditure shall be prepared by the estimating authorities up to the final unit of appropriation (Object head) under the prescribed Major and Minor Heads of Accounts for both Revenue and Capital expenditure. Estimates shall include suitable provision for liabilities of the previous years that is to be discharged during the year. Rule50 (4) The estimates of scheme related and other expenditures shall be processed in consultation with the Budget Division, Ministry of Finance in accordance with the instructions issued by it. Rule 50 (5) The Revised and Budget Estimates of both Revenue and Capital expenditure after being scrutinized by the Financial Advisers and approved by the Secretary of the Administrative Ministry or Department concerned shall be forwarded to the Budget Division in the Ministry of Finance in such manner and forms as may be prescribed by it from time to time. Rule 51 (1) Demands for Grants. The estimates for expenditure for which vote of Lok Sabha is required shall be in the form of

What This Means

Rule 47 of the General Financial Rules (GFR) 2017 focuses on the timely payment of dividends and profits by government-owned or controlled entities. Essentially, it states that once a decision to distribute dividends is made at the Annual General Meeting (AGM), the payment should not be delayed and must be made promptly. This rule applies to all Ministries and Departments that oversee Public Sector Undertakings (PSUs) or other entities generating profits that are to be shared with the government. The Department of Investment and Public Asset Management (DIPAM) provides specific guidelines on how these dividend payments should be handled.

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

Key Points

  • •Dividends must be paid promptly after the AGM decision.
  • •Ministries/Departments are responsible for monitoring timely dividend payments.
  • •Dividend payments must adhere to DIPAM guidelines.
  • •The rule aims to ensure efficient transfer of profits to the government.
  • •Applies to all Ministries/Departments overseeing profit-generating government entities.

Practical Example

The Ministry of Steel oversees SteelCorp, a PSU that had a profitable year. At SteelCorp's AGM in June 2024, a dividend of ₹500 crore was approved to be paid to the government. According to Rule 47, the Ministry of Steel must ensure that SteelCorp transfers this ₹500 crore dividend to the government account without undue delay. The Ministry's Finance Division will monitor SteelCorp's payment schedule and ensure it aligns with DIPAM guidelines, preventing any unnecessary delays and ensuring the funds are promptly credited 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 happens if a PSU delays dividend payment?▼
Delays in dividend payments are a violation of Rule 47. The concerned Ministry/Department is responsible for investigating the reason for the delay and taking corrective action to ensure timely payment. This might involve escalating the issue to higher authorities or imposing penalties as per DIPAM guidelines.
Where can I find the specific DIPAM guidelines mentioned in Rule 47?▼
The DIPAM guidelines regarding dividend payments are available on the DIPAM website (dipam.gov.in). You should refer to the latest circulars and notifications issued by DIPAM for the most up-to-date information.
Does Rule 47 apply to all government-owned companies?▼
Yes, Rule 47 applies to all government-owned or controlled entities that are generating profits and declaring dividends. The specific procedures for dividend payment may vary depending on the nature of the entity and the relevant DIPAM guidelines, but the core principle of timely payment remains the same.
What is the role of the Financial Advisor in the Ministry/Department regarding Rule 47?▼
The Financial Advisor plays a crucial role in ensuring compliance with Rule 47. They are responsible for scrutinizing the dividend payment proposals from PSUs, verifying that they align with DIPAM guidelines, and monitoring the timely transfer of funds to the government account. They also advise the Secretary of the Ministry/Department on any issues related to dividend payments.
What is the consequence of not following Rule 47?▼
Failure to comply with Rule 47 can lead to scrutiny from higher authorities, including the Ministry of Finance and the Comptroller and Auditor General of India (CAG). It can also result in reputational damage for the concerned Ministry/Department and the PSU involved. Corrective actions and penalties may be imposed to ensure compliance.

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 47 of the General Financial Rules, 2017, what is the required timeframe for paying dividends after the decision is taken in the Annual General Meeting (AGM)?

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