Rule 62 - Budget Savings & Spending
Original Rule Text
Rule 62. Rule 60 Control of expenditure against grant/appropriation and ultimate responsibility of the authority administering it. The Accounts Officer shall report to the Head of the Department concerned immediately on the first appearance of any disproportionate expenditure, particularly in respect of recurring items of expenditure under any grant or appropriation or a primary unit of appropriation thereof. However, the authority administering a grant/ appropriation is ultimately responsible for the control of expenditure against the grant/appropriation and not the Accounts Officer. Rule 61 Excess Expenditure. 1. The Accounts Officer shall not allow any payment against sanctions in excess of the Budget provisions unless there is specific approval of the Chief Accounting Authority. 2. The Financial Advisers and Chief Accounting Authority, before according concurrence for excess under any Head, shall ensure availability of funds through Re-appropriation/ Supplementary Demands for Grants. (Refer Appendix 10) Rule 62 (1) Surrender of savings. Departments of the Central Government shall surrender to the Finance Ministry, by the dates prescribed by that Ministry before the close of the financial year, all the anticipated savings noticed in the Grants or Appropriations controlled by them. The Finance Ministry shall communicate the acceptance of such surrenders as are accepted by it to the Accounts Officer, before the close of the year. The funds provided during the financial year and not utilized before the close of that financial year shall stand lapsed at the close of the financial year. Rule 62 (2) The savings as well as provisions that cannot be profitably utilised shall be surrendered to Government immediately, they are foreseen without waiting till the end of the year. No savings shall be held in reserve for possible future excesses. Rule 62 (3) Rush of expenditure, particularly in the closing months of the Financial Year, shall be regarded as a breach of financial propriety and shall be avoided. The Financial Advisers of the Ministries/Departments shall ensure adherence to the stipulated Monthly Expenditure Plan and the guidelines issued in this regard by the Budget Division, Department of Economic Affairs, from time to time. Rule 62 (4) The Financial Advisers of the Ministries/ Departments shall ensure adherence to the stipulated Quarterly Expenditure Plan and the guidelines issued in this regard by Ministry of Finance from time to time.
What This Means
GFR Rule 62 is all about responsible spending and budget management within the government. It emphasizes the importance of not hoarding funds and promptly returning any savings or unutilized provisions to the government. This means if a department realizes it won't need all the money allocated for a specific project, it should surrender those funds immediately, rather than holding onto them 'just in case.' The rule also strictly discourages a last-minute rush of spending at the end of the financial year, as this often leads to inefficient and potentially wasteful expenditures. Financial Advisors play a crucial role in ensuring that departments stick to their planned spending schedules.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Savings and unutilized provisions must be surrendered immediately to the government.
- 2Holding savings for potential future excesses is prohibited.
- 3A rush of expenditure at the end of the financial year is a breach of financial propriety.
- 4Financial Advisors are responsible for ensuring adherence to Monthly and Quarterly Expenditure Plans.
- 5Expenditure should align with the approved budget and spending plans.
Practical Example
The Ministry of Agriculture received an allocation of ₹5 crore for a farmer training program. By September, after streamlining the program, the project director, Mr. Sharma, realizes that only ₹4 crore will be needed. According to GFR Rule 62, Mr. Sharma must immediately surrender the remaining ₹1 crore to the government. He cannot hold onto the funds hoping to use them for another, unplanned initiative later in the year. Furthermore, the Financial Advisor of the Ministry, Ms. Verma, monitors the expenditure plan to prevent a sudden surge in spending in March to exhaust the budget, ensuring the funds are used efficiently throughout the year.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Cross References
Frequently Asked Questions
What happens if we realize we need more money than allocated?▼
What is considered a 'rush of expenditure' and why is it bad?▼
Who is responsible for ensuring compliance with Rule 62?▼
What is the purpose of surrendering savings immediately?▼
Does this rule apply to all types of government spending?▼
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 GFR Rule 62, what action should a government department take when it foresees that certain allocated funds will not be profitably utilized?