Rule 63 — GFR 2017
Original Rule Text
Rule 63
Expenditure on New Service. No
expenditure shall be incurred during a
financial year on a “New Service” not
contemplated in the Annual Budget for
the year except after obtaining a
supplementary grant or appropriation or
an advance from the Contingency Fund
during that year. The guidelines to
determine cases of “New Service”/ “New
Instrument of Service” are contained in
Annexure-1 to Appendix -3.
What This Means
This rule is about ensuring that government spending stays strictly within what was planned and approved in the annual budget. It states that you cannot spend money on any "New Service" – which means a new project, scheme, or activity that wasn't included or thought of when the yearly budget was prepared for the current financial year.
If your department identifies a critical need for a "New Service" during the financial year that wasn't in the budget, you cannot simply start spending. You must first get proper authorization. This typically involves either obtaining a "supplementary grant" or "appropriation" from Parliament or the State Legislature, which means getting additional funds specifically approved for this new purpose. Alternatively, in urgent cases, you might get an "advance from the Contingency Fund," which is a special fund for unforeseen and urgent expenses, but this advance must be repaid later once regular approval is obtained.
The rule also points out that there are specific guidelines in Annexure-1 to Appendix-3 that help determine exactly what constitutes a "New Service" or "New Instrument of Service." This ensures clarity on whether a particular expenditure falls under this rule and requires special approval.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Government departments are prohibited from spending on any new service or activity not originally planned and approved in the annual budget.
- 2To incur expenditure on a "New Service," specific prior approval is mandatory during the same financial year.
- 3The required approvals include obtaining a supplementary grant, a supplementary appropriation, or an advance from the Contingency Fund.
- 4The detailed criteria for identifying what constitutes a "New Service" are provided in Annexure-1 to Appendix-3 of the General Financial Rules, 2017.
Practical Example
The Department of Rural Development, led by Director Ms. Priya Sharma, identifies a pressing need in October 2023 to launch a new "Digital Literacy for Remote Villages" program. This program, estimated to cost ₹50 lakhs, was not included in their Annual Budget for the 2023-24 financial year, which was approved in March 2023. Ms. Sharma understands that she cannot simply reallocate funds from existing schemes or start spending from her department's general budget.
To comply with Rule 63, Ms. Sharma's team must prepare a detailed proposal for the new program, justifying its necessity and cost. They would then need to submit this proposal through the proper channels to seek either a supplementary grant from the Parliament (if it's a central scheme) or a supplementary appropriation. If the need is extremely urgent and cannot wait for the supplementary budget process, they might apply for an advance from the Contingency Fund, explaining the urgency. Only after receiving one of these specific approvals can the Department of Rural Development legally begin incurring expenditure on the "Digital Literacy for Remote Villages" program.
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.