Rule 25 - External Funding
Original Rule Text
25. Public debt, provident funds, deposits, etc.,.–(1) Public debt means Government borrowings from internal sources viz, market loans, treasury bills, National Savings Certificate and Post Office Savings Deposits, etc. and external sources viz, loans from foreign countries or institutions, etc.,
(2) The internal public debt raised by Government by issue of securities shall be managed by Reserve Bank and as per the guidelines of the Government.
(3) Payment of cheques including Public Debt Office Interest Warrants governed by the Negotiable Instrument Act, 1881 (26 of 1881), shall be made in accordance with the provisions of that Act and any generally recognised practice established among bankers.
(4) The procedures to be followed by public debt officers of Reserve Bank in making payment in respect of principal of market loans, sale and discharge of treasury bills and interest thereon when they fall due shall be governed by the provisions contained in Government Securities Manual and Supplementary instructions or regulations, if any, issued by the Government.
Treasury bills can only be paid on maturity at the office of the bank from which they were issued.
(6) After payment, the discharge bills shall be treated in the same way as other paid vouchers.
(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.
(8) The procedure to be followed by post offices in respect of the custody, issue and discharge of National Savings Certificates, Post Office Saving Bank Deposits, Time Deposits, Recurring Deposits shall be specified by Budget Division, Department of Economic Affairs, Ministry of Finance.
Note: The conditions under which National Savings Certificates of different denominations are issued and discharged, the maximum limits of investment, the interest which accrues on them, and other matters connected therewith are regulated by special instructions issued by the Government.
(9) Recovery of subscription to a provident fund of the Government and advances and withdrawals from such fund shall be strictly in accordance with the procedure prescribed in the relevant rules of the fund.
(10) Premia or subscription to the Post Office Insurance Fund shall be recovered strictly in accordance with the procedure prescribed in the rules of the fund.
(11) Monthly subscriptions recoverable from members of Central Government Employees Group Insurance Scheme (CGEGIS) shall be deducted from pay bills and amount payable to members or nominees of deceased members arising under the said scheme or rules or procedure shall be as prescribed by the Government, as the case may be.
(12) Moneys received for deposit in the Government Account shall be classified under suitable heads of account appearing under two broad categories of 'Deposits bearing interest' and 'Deposits not bearing interest' under Public Account and comply the procedure as specified by the Government.
(13) Refund of deposit shall be made only on receipt of application received from applicant entitled to receive such refund.
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
- 1The Department of Economic Affairs (DEA) executes loan/grant agreements with external funding agencies.
- 2A copy of the agreement must be sent to the Controller of Aid Accounts and Audit (CAA&A).
- 3CAA&A is responsible for the receipt, payment, and accounting of funds from these agreements.
- 4CAA&A follows the procedures outlined in Chapter 10 of the General Financial Rules (GFR), 2017.
- 5This 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?▼
What is the significance of Chapter 10 of the General Financial Rules (GFR), 2017?▼
Who is the Controller of Aid Accounts and Audit (CAA&A) and what are their responsibilities?▼
What happens if the agreement copy is not sent to CAA&A?▼
Does this rule apply to all types of external funding?▼
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?