Para 2.2.19 — MSO

2.2.19 Under Articles 115 and 205 of the Constitution and under Section 30 of the Government of Union Territories Act, 1963, when a need arises during a financial year for supplementary or additional expenditure upon some new service not contemplated in the annual financial statement for that year, funds will have to be got authorised by the appropriate Legislature before incurring that expenditure from the Consolidated Fund. The term 'New Service' has not been defined in any precise form in the legislations. A new service may be either a 'new form of service' involving the adoption of a new policy or the provision of a new facility, or a 'new instrument of service' which includes an important extension of a previous specific commitment or facility. A new form of service is an altogether new service and irrespective of its financial implications, if it was not contemplated in the annual financial statement, provision of funds by the legislature is necessary before incurring expenditure from the Consolidated Fund. A new instrument of service has also to be treated in the same way as a new form of service, if the expenditure involved is relatively large. The Central Government and the various State and Union Territory Governments have from time to time issued, mainly on the basis of the recommendations of the Public Accounts Committees, instructions laying down the criteria for treating certain categories of expenditure as on a new service. These instructions should be referred to while examining expenditure not contemplated in the annual financial statement. Even in cases where expenditure on a new service can be met by savings within the Grant or Appropriation, the expenditure cannot be incurred without obtaining a token Supplementary Grant or Appropriation from the Legislature.

Note: The financial limits fixed by the Central Government for different categories of expenditure beyond which they constitute expenditure on a “New Service/New Instrument of Service” are contained in the Government of India Decision (1) below Rule 10 of the Delegation of Financial Power Rules.