Rule 111 of The General Financial Rules 2017 Petty Isolated Claims Not Preferred
Original Rule Text
Visual Summary
Claims not exceeding Rupees ten thousand.
Agreement between Central and State Governments.
Such claims should not be preferred against each other.
Executive Summary
Rule 111 of the General Financial Rules, 2017 establishes a reciprocal agreement between the Central Government (including Union Territories) and State Governments. Under this arrangement, neither party should prefer petty and isolated claims for services rendered against the other, specifically when the amount of such claims does not exceed Rupees ten thousand. This rule aims to streamline inter-governmental financial adjustments by avoiding the administrative burden associated with minor claims.
In-Depth Analysis of the Rule
Introduction: Rule 111 is a crucial provision within the General Financial Rules, 2017, designed to foster efficiency and cooperation in financial dealings between different levels of government. It addresses the practical issue of minor financial claims that, if pursued rigorously, could lead to disproportionate administrative costs and inter-departmental friction.
Breakdown of the Rule:
- Scope of Application: The rule specifically applies to “petty and isolated claims for services rendered.” This implies that the claims must be small in nature and not part of a larger, ongoing financial obligation.
- Monetary Limit: A clear threshold is set: claims “not exceeding Rupees ten thousand” fall under this rule. This quantifiable limit helps in easy identification and application of the provision.
- Parties Involved: The reciprocal arrangement is explicitly between “The Central Government (which includes Union Territories) and the State Governments,” highlighting its inter-governmental nature.
- The Principle of Non-Preference: The core directive is “not to prefer” such claims. This means that for claims meeting the specified criteria, the governments involved should refrain from formally raising or pursuing them against each other.
Practical Example: Imagine a Central Government department provides a minor technical consultation service to a State Government agency, incurring a cost of Rs. 8,500. According to Rule 111 of the General Financial Rules, 2017, because this is a petty and isolated claim for services rendered and the amount is below Rs. 10,000, the Central Government department, under the reciprocal arrangement, would not prefer a claim for this amount against the State Government. This avoids the administrative effort of raising, processing, and settling a small bill, promoting efficiency in government operations.
Related Provisions
Understanding Rule 111 is enhanced by considering these related provisions:
- Rule 108 of The General Financial Rules 2017 Adjustments with State Governments: This rule sets out the general principles for financial adjustments between the Central and State Governments, providing a broader context for Rule 111.
- Rule 112 of The General Financial Rules 2017 Reciprocal Arrangement Criteria: Directly following Rule 111, this provision elaborates on the criteria for determining whether a particular claim falls under the reciprocal arrangement, offering further clarity on the scope of “services rendered.”
Learning Aids
Mnemonics
- PICS-10: Petty Isolated Claims for Services (up to Rs. 10,000) are Not Preferred.
Process Flowchart
Multiple Choice Questions (MCQs)
1. What is the maximum monetary limit for petty and isolated claims for services rendered not to be preferred under Rule 111 of the General Financial Rules, 2017?
- A) Rupees five thousand
- B) Rupees ten thousand
- C) Rupees twenty thousand
- D) Rupees fifty thousand
Show Answer
Correct Answer: B) Rupees ten thousand
2. Rule 111 of the General Financial Rules, 2017 establishes a reciprocal arrangement between which entities?
- A) Central Government and Public Sector Undertakings
- B) State Governments and Local Bodies
- C) Central Government (including Union Territories) and State Governments
- D) Ministries and their subordinate offices
Show Answer
Correct Answer: C) Central Government (including Union Territories) and State Governments
3. What type of claims are specifically addressed by Rule 111 of the General Financial Rules, 2017 for non-preference?
- A) Claims for goods supplied
- B) Claims for capital expenditure
- C) Petty and isolated claims for services rendered
- D) Claims for recurring administrative expenses
Show Answer
Correct Answer: C) Petty and isolated claims for services rendered
4. The phrase “not to prefer” in Rule 111 of the General Financial Rules, 2017 implies what action regarding specified claims?
- A) To prioritize them for immediate payment
- B) To formally raise and pursue them
- C) To refrain from formally raising or pursuing them
- D) To consolidate them into larger claims
Show Answer
Correct Answer: C) To refrain from formally raising or pursuing them
5. What is the underlying purpose of the reciprocal arrangement in Rule 111 of the General Financial Rules, 2017?
- A) To increase revenue collection for the Central Government
- B) To reduce administrative burden for minor inter-governmental claims
- C) To ensure all services rendered are formally billed
- D) To centralize all financial claims processing
Show Answer
Correct Answer: B) To reduce administrative burden for minor inter-governmental claims
Frequently Asked Questions
What is the monetary limit for claims to be considered “petty” under Rule 111 of the General Financial Rules, 2017?
Under Rule 111, claims are considered “petty” if they do not exceed Rupees ten thousand.
Which government entities are involved in the reciprocal arrangement described in Rule 111 of the General Financial Rules, 2017?
The reciprocal arrangement is between the Central Government (including Union Territories) and the State Governments.
What is the main objective of Rule 111 of the General Financial Rules, 2017?
The main objective is to avoid the administrative burden and costs associated with formally preferring and settling minor, isolated claims for services rendered between the Central and State Governments, thereby promoting efficiency.
Key Takeaways
- Rule 111 applies to “petty and isolated claims for services rendered.”
- The monetary threshold for such claims is “not exceeding Rupees ten thousand.”
- A reciprocal agreement exists between the Central Government (including Union Territories) and State Governments.
- The rule aims to reduce administrative overhead by discouraging the formal preference of minor inter-governmental claims.
Conclusion
Rule 111 of the General Financial Rules, 2017, exemplifies a pragmatic approach to inter-governmental financial management. By establishing a clear framework for not preferring minor claims, it significantly contributes to administrative efficiency and fosters a spirit of cooperation between the Central and State Governments, allowing resources to be focused on more substantial financial matters.