Rule 67 of The General Financial Rules 2017 Advance from Contingency Fund
Original Rule Text
Visual Summary
Meet unforeseen expenses or new services when budget approval is delayed.
Advance from the Contingency Fund of India (Article 267(1)).
Formal application and recoupment as per Contingency Fund of India Rules.
Executive Summary
Rule 67 of The General Financial Rules, 2017 outlines the procedure for obtaining an advance from the Contingency Fund of India. This mechanism is crucial for addressing unforeseen expenditures or funding new services not initially provided in the annual budget, especially when there isn’t enough time to secure a supplementary grant or pass an appropriation bill before the financial year ends. It also covers expenditures exceeding provisions in an Appropriation (Vote on Account) Act. Applications for such advances must detail the expenditure and relate it to the appropriate grant unit. The specific procedures for obtaining and recouping these advances are governed by the Contingency Fund of India (Amendment) Rules, 2021.
In-Depth Analysis of the Rule
Rule 67 serves as a vital financial safety net, enabling the government to respond to urgent and unanticipated financial needs without disrupting ongoing operations or waiting for lengthy parliamentary approval processes. It reflects a pragmatic approach to financial management, acknowledging that not all expenditures can be perfectly forecasted.
Breakdown of the Rule:
- Sub-rule (1) – Purpose of Advance: Specifies that an advance from the Contingency Fund is to be obtained for unforeseen expenditure or a new service not in the budget, particularly when there’s insufficient time for a supplementary grant or appropriation bill before the financial year closes. This highlights its role as an emergency funding mechanism.
- Sub-rule (2) – Scope of Application: Extends the use of the Contingency Fund to cover expenditures that exceed the provisions made in an Appropriation (Vote on Account) Act, ensuring flexibility even with interim budget approvals.
- Sub-rule (3) – Application Requirements: Mandates that applications for advances must clearly detail the additional expenditure and link it to the relevant sub-head and primary unit of the grant. It also provides for referral to the Finance Ministry for clarification in case of difficulties.
- Sub-rule (4) – Governing Procedure: Directs that the process for obtaining and recouping advances from the Contingency Fund is governed by the Contingency Fund of India (Amendment) Rules, 2021, emphasizing adherence to specific procedural guidelines.
Practical Example:
Imagine a sudden natural disaster requiring immediate relief efforts and infrastructure repair. The annual budget might not have a specific allocation for such an event, and waiting for a supplementary grant could cause critical delays. Under Rule 67 of The General Financial Rules, 2017, the concerned Ministry can apply for an advance from the Contingency Fund to quickly mobilize resources for disaster response. This allows the government to act swiftly, with the understanding that the advance will be regularized through subsequent parliamentary approval.
Related Provisions
Rule 67 is closely related to other financial rules that govern budget management and expenditure control:
- Rule 66 of The General Financial Rules, 2017 Supplementary Grants: This rule details the process for obtaining supplementary grants, which is the alternative to drawing from the Contingency Fund when there is sufficient time.
- Appendix 6 of The General Financial Rules, 2017 The Contingency Fund of India Rules: Provides the detailed procedures for operating and recouping the Contingency Fund, directly referenced by Rule 67(4).
- Rule 63 of The General Financial Rules, 2017 Expenditure on New Service: Defines what constitutes a “New Service” and the requirement for parliamentary approval, which Rule 67 addresses when such approval cannot be obtained in time.
Learning Aids
Mnemonics:
- C.F.A.S.T. (Contingency Fund: Advance for Sudden, Timely needs): Helps remember the core purpose of the rule – quick access to funds for urgent, unforeseen situations.
Process Flowchart:
Multiple Choice Questions (MCQs)
1. Under Rule 67 of the General Financial Rules, 2017, for what primary reason is an advance from the Contingency Fund typically obtained?
- A) To cover routine administrative expenses.
- B) To fund unforeseen expenditure or new services when budget approval is delayed.
- C) To provide long-term capital for new projects.
- D) To adjust surpluses at the end of the financial year.
Show Answer
Correct Answer: B) To fund unforeseen expenditure or new services when budget approval is delayed.
2. According to Rule 67(2) of the General Financial Rules, 2017, an advance from the Contingency Fund can also be used to meet expenditure in excess of provisions for which of the following?
- A) Annual Financial Statement.
- B) Detailed Demands for Grants.
- C) Appropriation (Vote on Account) Act.
- D) Budget Estimates of Railways.
Show Answer
Correct Answer: C) Appropriation (Vote on Account) Act.
3. Rule 67(3) of the General Financial Rules, 2017 requires an application for an advance from the Contingency Fund to indicate which of the following?
- A) The names of all beneficiaries.
- B) The full financial history of the applicant.
- C) Particulars of additional expenditure and the relevant grant unit.
- D) A detailed project report for the new service.
Show Answer
Correct Answer: C) Particulars of additional expenditure and the relevant grant unit.
4. The procedure for obtaining and recouping an advance from the Contingency Fund, as per Rule 67(4) of the General Financial Rules, 2017, is laid down in which document?
- A) The Constitution of India.
- B) The Delegation of Financial Powers Rules.
- C) The Contingency Fund of India (Amendment) Rules, 2021.
- D) The Treasury Rules of the Central Government.
Show Answer
Correct Answer: C) The Contingency Fund of India (Amendment) Rules, 2021.
5. Which Article of the Constitution of India is mentioned in Rule 67(1) of the General Financial Rules, 2017 as the basis for the Contingency Fund?
- A) Article 112(1)
- B) Article 266(1)
- C) Article 267(1)
- D) Article 283(1)
Show Answer
Correct Answer: C) Article 267(1)
Frequently Asked Questions (FAQs)
What is the primary purpose of an advance from the Contingency Fund under Rule 67 of The General Financial Rules, 2017?
It is primarily to meet unforeseen expenditure or to fund a new service not provided in the budget, especially when there is insufficient time to obtain a supplementary grant or pass an appropriation bill before the financial year ends.
How does Rule 67 of The General Financial Rules, 2017 ensure accountability for advances from the Contingency Fund?
While Rule 67 itself focuses on the immediate need for funds, it mandates that the procedure for obtaining and recouping the advance is laid down in the Contingency Fund of India (Amendment) Rules, 2021, which includes mechanisms for regularization and parliamentary oversight.
Can an advance from the Contingency Fund under Rule 67 of The General Financial Rules, 2017 be used for any expenditure?
No, it is specifically for unforeseen expenditure, new services not in the budget, or expenses exceeding provisions in an Appropriation (Vote on Account) Act, when timely parliamentary approval is not possible. The application must detail the expenditure and relate it to a specific grant unit.
Key Takeaways
- Rule 67 enables the government to draw advances from the Contingency Fund for urgent, unforeseen expenditures or new services when regular budget approval is not feasible due to time constraints.
- It also covers expenditures exceeding allocations in an Appropriation (Vote on Account) Act.
- Applications for advances must be detailed, specifying the expenditure and its relation to the relevant grant unit.
- The operational procedures for the Contingency Fund are governed by specific rules, ensuring a structured approach to emergency funding.
Conclusion
Rule 67 of The General Financial Rules, 2017 is a critical provision that provides the necessary flexibility for the government to manage unexpected financial demands effectively. By allowing temporary access to the Contingency Fund, it ensures that essential services and urgent initiatives can proceed without undue delay, while still maintaining a framework for accountability and eventual parliamentary regularization.