Rule 54 — General Financial Rules 2017 (amended July 2024) - Rule 54
Original Rule Text
Rule 54
Outcome Budget. After finalization of
the estimates for budgetary allocations,
the
Department
of
Expenditure
in
consultation with NITI Aayog and the
concerned Ministries shall prepare an
Outcome
Budget
statement
linking
outlays against each scheme/project with
the outputs/deliverables and medium-
term outcomes. The outputs/deliverables
shall
be
mandatorily
given
in
measurable/quantitative terms on the
basis of parameters and deliverables
decided in advance, on the basis of
projections made in the Medium-Term
Expenditure
Framework
(MTEF)
Statement.
Allocations
for
each
scheme/project shall be against a firm set
of deliverables which shall be adhered to.
The
performance
against
specified
outcomes would form the basis of
deciding on the continuation of the
scheme and the quantum of budget
allocation.
What This Means
This rule is about ensuring that government spending leads to actual results and impacts, not just about how much money is spent. It requires the creation of an 'Outcome Budget' statement after the annual budget allocations are finalized. This statement clearly links the money allocated to each government scheme or project with the specific things it is expected to produce (outputs/deliverables) and the broader impact it aims to achieve (medium-term outcomes).
The Department of Expenditure is responsible for preparing this Outcome Budget, working closely with NITI Aayog and the specific Ministries that manage these schemes. For every scheme, the expected outputs and deliverables must be described in clear, measurable terms – meaning they should be quantifiable, like 'number of schools built' or 'percentage increase in literacy.' These measurable targets are decided in advance, often based on projections from a document called the Medium-Term Expenditure Framework.
Crucially, the money allocated to a scheme is tied to these specific, agreed-upon results. Government officers involved in implementing these schemes must ensure these deliverables are met. The performance of a scheme against its promised outcomes will directly influence whether it continues to receive funding in the future and how much budget it gets. If a scheme consistently fails to deliver its intended results, its funding might be reduced or even stopped.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1The Outcome Budget connects financial allocations for schemes with their expected outputs, deliverables, and medium-term outcomes.
- 2The Department of Expenditure, in consultation with NITI Aayog and concerned Ministries, is responsible for preparing the Outcome Budget.
- 3All outputs and deliverables must be defined in clear, measurable, and quantitative terms.
- 4These measurable targets are decided in advance, often based on projections from the Medium-Term Expenditure Framework (MTEF).
- 5Budget allocations for schemes are contingent upon a firm set of deliverables that must be adhered to.
- 6A scheme's performance against its specified outcomes directly determines its continuation and future budget allocation.
Practical Example
Imagine the Ministry of Rural Development launches a new scheme called 'Village Water Security' with an allocation of ₹750 crores for the financial year. According to Rule 54, after this budget is approved, the Department of Expenditure, in collaboration with NITI Aayog and the Ministry of Rural Development, will prepare an Outcome Budget statement for this specific scheme.
This statement will clearly define the measurable outputs and outcomes. For instance, it might specify: 'Installation of 1,500 new community water purification units in identified villages by March 31st' (an output/deliverable) and 'Reduction in waterborne diseases by 20% in target areas over the next three years' (a medium-term outcome). The ₹750 crore allocation is now firmly linked to achieving these specific targets. Officers in the Ministry responsible for implementing 'Village Water Security' must continuously monitor progress against these metrics. If, by the end of the year, only 500 units are installed, the Ministry will need to account for the shortfall, and this underperformance could lead to a reduced budget for the scheme in the following year or even a re-evaluation of its effectiveness and future.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
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This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.