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Rule 25 - External Funding | KartavyaDesk

RPR

Original Rule Text

(7) The Department of Economic Affairs, Ministry of Finance shall execute the agreement for loan or grant from external funding agencies and a copy of such agreement shall be sent to office of the Controller of Aid Accounts and Audit, Department of Economic Affairs which is responsible for receipt, payment and accounting in accordance with the procedure prescribed in Chapter 10 of General Financial Rules, 2017.

What This Means

Rule 25 of the Receipt and Payment Rules outlines the process for handling agreements related to loans or grants received from external funding agencies. Essentially, when India receives financial assistance from international organizations like the World Bank or the Asian Development Bank, the Department of Economic Affairs (DEA) within the Ministry of Finance is responsible for formally signing the agreement. This agreement is the official document outlining the terms and conditions of the loan or grant.

After the agreement is signed, a copy must be sent to the Controller of Aid Accounts and Audit (CAA&A), which also sits within the DEA. The CAA&A is then responsible for managing the receipt, payment, and accounting of these funds. This ensures that the money is used according to the agreement and that proper records are maintained. The CAA&A follows the procedures outlined in Chapter 10 of the General Financial Rules (GFR), 2017, which provides detailed guidelines on how to manage external aid.

This rule affects all government departments and agencies that receive funding from external sources. It ensures transparency and accountability in the management of foreign aid, and it's crucial for maintaining good relationships with international funding partners.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

  • •The Department of Economic Affairs (DEA) executes loan/grant agreements with external funding agencies.
  • •A copy of the agreement must be sent to the Controller of Aid Accounts and Audit (CAA&A).
  • •CAA&A is responsible for the receipt, payment, and accounting of funds from these agreements.
  • •CAA&A follows the procedures outlined in Chapter 10 of the General Financial Rules (GFR), 2017.
  • •This rule ensures proper management and accountability of external funding.

Practical Example

The Ministry of Urban Development secures a loan of $500 million from the Asian Infrastructure Investment Bank (AIIB) for a metro rail project in Jaipur. The Department of Economic Affairs (DEA), represented by Joint Secretary Sharma, signs the loan agreement with AIIB. A copy of this signed agreement is immediately forwarded to the Controller of Aid Accounts and Audit (CAA&A), headed by Director Verma.

Director Verma and her team at CAA&A then establish the necessary accounting procedures, ensuring that all funds received from AIIB are properly recorded and disbursed according to the terms outlined in the agreement and following the guidelines in Chapter 10 of the GFR, 2017. They track all payments made to contractors, consultants, and other stakeholders involved in the Jaipur metro project, ensuring compliance with the loan agreement and reporting requirements.

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

What is the role of the Department of Economic Affairs (DEA) in this rule?▼
The DEA is responsible for executing the loan or grant agreement with the external funding agency.
What is the significance of Chapter 10 of the General Financial Rules (GFR), 2017?▼
Chapter 10 of the GFR, 2017, provides detailed procedures for the receipt, payment, and accounting of funds received from external funding agencies, which the CAA&A must follow.
Who is the Controller of Aid Accounts and Audit (CAA&A) and what are their responsibilities?▼
The CAA&A is an office within the Department of Economic Affairs responsible for the receipt, payment, and accounting of funds received from external funding agencies. They ensure proper management and accountability of these funds.
What happens if the agreement copy is not sent to CAA&A?▼
Failure to send the agreement copy to CAA&A would impede the proper accounting and management of the funds, potentially leading to non-compliance with the agreement terms and audit issues.
Does this rule apply to all types of external funding?▼
Yes, this rule applies to all loans and grants received from external funding agencies by the Government of India.

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

Which department is responsible for executing the agreement for a loan or grant from an external funding agency, as per Rule 25 of the Receipt and Payment Rules?

Related Rules

GeneralReceipt & Payment Rules, 2022 - GeneralRule 1Receipt & Payment Rules, 2022 - Rule 1Rule 11Receipt & Payment Rules, 2022 - Rule 11Rule 23Receipt & Payment Rules, 2022 - Rule 23Rule 12Receipt & Payment Rules, 2022 - Rule 12

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