Rule 23 of the General Financial Rules 2017 Delegation of Financial Powers
Original Rule Text
Visual Summary
Delegation of Powers
The government distributes its financial authority to lower-level officials.
Subordinate Authorities
These are the various officials and departments who receive the delegated powers.
Finance Ministry’s Role
Any power not specifically delegated remains with the Finance Ministry.
Governing Document
The process is governed by the ‘Delegation of Financial Powers Rules’.
Executive Summary
Rule 23 explains how the government’s financial powers are distributed. It states that these powers are formally given (delegated) to various lower-level authorities to enable them to function effectively. The specific details of who gets what power are laid out in a separate document called the ‘Delegation of Financial Powers Rules’. Crucially, any financial power that is not explicitly given to a subordinate authority is automatically retained by the Finance Ministry, making it the ultimate authority for all non-delegated financial matters.
In-Depth Analysis of the Rule
Introduction
To run a large organization like the government, it’s impossible for one central body to approve every single expense. Rule 23 establishes the legal framework for decentralizing financial authority. It ensures that day-to-day financial decisions can be made efficiently at different levels of the government, while also maintaining a clear line of ultimate authority.
Breakdown of the Rule
The rule has two key components:
1. Delegation of Powers: The government’s ability to spend money or enter into financial commitments is passed down to ‘subordinate authorities’ (like department heads or specific officers). This is not an informal process; it is strictly governed by a formal set of rules known as the ‘Delegation of Financial Powers Rules’. This document acts as the master guide for financial authority across the government.
2. Residual Powers: The rule creates a default or ‘catch-all’ provision. It explicitly states that any financial power that has *not* been delegated to a subordinate authority automatically ‘vests’ (resides with) the Finance Ministry. This prevents any ambiguity about who has the authority for a particular financial decision if it’s not covered in the delegation rules.
Practical Example
Imagine the head of a small government research institute needs to purchase new lab equipment costing ₹5 lakhs. Instead of sending the file all the way to the Finance Ministry, they would consult the ‘Delegation of Financial Powers Rules’. If those rules state that an officer of their rank is permitted to approve purchases up to ₹10 lakhs, they can sanction the expenditure themselves. However, if the institute wanted to approve a major international research collaboration costing ₹50 crores, and this power is not mentioned in the delegation rules, Rule 23 makes it clear that the authority for this decision lies with the Finance Ministry.
Conclusion
Rule 23 is a foundational principle of public financial management. It creates an orderly system by delegating routine powers to make administration efficient, while ensuring that significant or unassigned financial powers remain under the central control of the Finance Ministry. This balances operational autonomy with fiscal responsibility.
Related Provisions
Understanding Rule 23 is enhanced by looking at related rules that deal with the broader context of financial powers and expenditure. The following provisions are particularly relevant:
- Rule 22: Expenditure from Public Funds – This rule states that no authority can incur expenditure without a sanction from a competent authority. Rule 23 defines how an authority becomes ‘competent’ through delegation.
- Rule 6: Modifications – This rule clarifies that any modification to the systems and procedures in the GFRs requires the express approval of the Finance Ministry, reinforcing the Ministry’s central role mentioned in Rule 23.
- Rule 24: Consultation with Financial Advisers – This rule outlines the process of consulting with Financial Advisers for major expenditure proposals, which is a key part of the financial management system that Rule 23 helps structure.
Learning Aids
Mnemonics
- DFPR: Remember ‘Don’t Forget Power Rules’. This helps recall that the ‘Delegation of Financial Powers Rules’ is the key document for delegated authority.
- FIN: ‘Finance Is Next’. If a power is not delegated, it automatically goes to the Finance Ministry.
Mindmap
Multiple Choice Questions (MCQs)
1. [Easy] According to Rule 23, where are the specific rules detailing the financial powers delegated to subordinate authorities documented?
- A) In the General Financial Rules, 2017 itself.
- B) In the Delegation of Financial Powers Rules.
- C) In the annual budget circular.
- D) In orders issued by the President.
Show Answer
Correct Answer: B) In the Delegation of Financial Powers Rules.
2. [Medium] If a specific financial power is not mentioned in the Delegation of Financial Powers Rules, which entity holds that power by default?
- A) The Head of the Department concerned.
- B) The Cabinet.
- C) The Finance Ministry.
- D) The Comptroller and Auditor General of India.
Show Answer
Correct Answer: C) The Finance Ministry.
3. [Hard] What is the legal status of a financial power of the Government that has not been delegated to a subordinate authority?
- A) It is considered null and cannot be exercised.
- B) It requires a new Act of Parliament to be exercised.
- C) It shall vest in the Finance Ministry.
- D) It is automatically delegated to the highest-ranking officer of the concerned department.
Show Answer
Correct Answer: C) It shall vest in the Finance Ministry.
Frequently Asked Questions
Why are financial powers delegated at all?
Financial powers are delegated to make the government’s functioning more efficient. It allows lower-level authorities to make necessary financial decisions quickly without having to seek approval from the highest levels for every single expenditure, which would cause massive delays.
Does this rule mean the Finance Ministry can take back any delegated power?
While this rule establishes the Finance Ministry as the holder of non-delegated powers, the process of changing delegated powers is governed by the ‘Delegation of Financial Powers Rules’. Any amendments to those rules would be the formal mechanism for altering the powers of subordinate authorities.
Where can I find the ‘Delegation of Financial Powers Rules’ mentioned in Rule 23?
The ‘Delegation of Financial Powers Rules’ is a separate, detailed legal document published by the Government of India. It is usually available on the website of the Department of Expenditure, Ministry of Finance.
Key Takeaways
- Financial powers are officially handed down to various government officials to keep work moving.
- A specific rulebook, the ‘Delegation of Financial Powers Rules’, defines exactly who can approve what.
- If a power isn’t listed in that rulebook, the Finance Ministry is automatically in charge of it.
- This system balances efficiency at lower levels with central control over major financial decisions.