Rule 78 — General Financial Rules 2017 (amended July 2024) - Rule 78

GFR 2017

Rule 78 Classification of transactions in Government Accounts. As a general rule, classification of transactions in Government Accounts, shall have closer reference to functions, programmes and activities of the Government and the object of revenue or expenditure, rather than the department in which the revenue or expenditure occurs. Major Heads (comprising Sub-Major Heads wherever necessary) are divided into Minor Heads. Minor Heads may have a number of subordinate heads, generally known as Sub Heads. The Sub Heads are further divided into Detailed Heads followed by Object Heads. The Major Heads of account, falling within the sectors for expenditure heads, generally correspond to functions of Government, while the Minor Heads identify the programmes undertaken to achieve the objectives of the functions represented by the Major Head. The Sub Head represents schemes, the Detailed Head denotes sub scheme and Object Head represent the primary unit of appropriation showing the economic nature of expenditure such as salaries and wages, office expenses, travel expenses, professional services, grants- in-aid, etc. The above six tiers are represented by a unique 15-digit numeric code.

What This Means

This rule explains how all financial transactions, both money coming in (revenue) and money going out (expenditure), must be recorded in government accounts. The main idea is to categorize these transactions based on *what* the money is for – specifically, the government's functions, programs, and activities, and the actual purpose of the revenue or expenditure (e.g., salaries, office supplies). It's less about *which department* is handling the money and more about the *purpose* behind the financial movement.

This rule applies to all government officers involved in managing or recording financial transactions. When you process any financial transaction, you must ensure it is classified correctly using a detailed, structured system. This system uses a hierarchy of categories, starting with broad 'Major Heads' (representing government functions) and narrowing down to 'Minor Heads' (for specific programs), 'Sub Heads' (for schemes), 'Detailed Heads' (for sub-schemes), and finally 'Object Heads' (which describe the actual type of expense, like salaries or travel).

Each level of this classification helps create a clear and consistent picture of where government money is coming from and going to. This entire classification for a transaction is represented by a unique 15-digit numeric code, ensuring accuracy and transparency in financial reporting.