Rule 112 of The General Financial Rules 2017 Reciprocal Arrangement Claim Criteria
Original Rule Text
Visual Summary
Must be petty and occasional.
Covers services rendered, not supplies.
Commercial entities are outside purview.
Executive Summary
Rule 112 of The General Financial Rules, 2017, outlines the criteria for determining which claims fall under reciprocal arrangements between the Central Government and State Governments. It specifies that only claims that are both ‘petty’ and ‘occasional’ in nature, and relate to ‘services rendered’ (not supplies), are covered. Commercial undertakings like Railways or Posts are explicitly excluded from these arrangements. Any doubts regarding a claim’s applicability are to be resolved through mutual consultation, and these arrangements are to remain in force indefinitely for all State Governments.
In-Depth Analysis of Rule 112
Rule 112 provides essential guidance for inter-governmental financial adjustments, specifically defining the scope of ‘reciprocal arrangements’ between the Central Government and State Governments. This rule aims to streamline the settlement of minor claims by establishing clear boundaries, thereby preventing unnecessary administrative burdens for routine transactions.
Breakdown of the Rule
- Core Criteria: A claim must be both ‘petty’ and ‘occasional’ to be covered by the reciprocal arrangement. This ensures that only minor, infrequent transactions are handled under this simplified mechanism.
- Service vs. Supplies: The rule explicitly states that claims must pertain to ‘services rendered’ and not ‘supplies made’. An example provided is police escort services, distinguishing it from the provision of stores. If supplies form part of a service, they may be included.
- Exclusion of Commercial Undertakings: Commercial entities operating under the Government of India or State Governments, such as Railways, Department of Post, or Electrical undertakings, are specifically excluded. Their claims are to be settled through existing, separate procedures.
- Dispute Resolution: In cases of doubt regarding a claim’s applicability, the matter is to be resolved through mutual consultation between the involved parties.
- Indefinite Validity: The reciprocal arrangements established by this rule are to remain in force without any time limit for all State Governments.
Practical Example
Imagine the Central Government requests a State Government to provide a police escort for a visiting dignitary for a single event. The cost incurred by the State Government for this service would likely be considered a ‘petty’ and ‘occasional’ claim for a ‘service rendered’. Therefore, it would fall under the reciprocal arrangement as per Rule 112. However, if the Central Government requested a large quantity of office supplies from a State Government’s commercial procurement wing, this would be a ‘supply made’ by a ‘commercial undertaking’ and thus fall outside the reciprocal arrangement, requiring settlement through standard commercial procedures.
Related Provisions
Understanding Rule 112 is enhanced by reviewing other rules governing inter-governmental adjustments and financial propriety:
- Rule 111 of The General Financial Rules, 2017: Petty and Isolated Claims for Services Rendered – This rule sets the context for not preferring petty and isolated claims, which Rule 112 then defines criteria for.
- Rule 108 of The General Financial Rules, 2017: Adjustments with State Governments – Provides the overarching framework for financial transactions and agreements between the Central and State Governments.
- Rule 21 of The General Financial Rules, 2017: Standards of Financial Propriety – Emphasizes the general principles of financial management that all officers must adhere to when dealing with public moneys.
Learning Aids
Mnemonics
- To remember the criteria for reciprocal arrangements: Petty Occasional Services Exclude Commercial. (Petty, Occasional, Services, Exclude Commercial)
Process Flowchart
Multiple Choice Questions
1. What is a primary criterion for a claim to be covered by reciprocal arrangements under Rule 112 of the General Financial Rules, 2017?
- A) It must involve large-scale supplies.
- B) It must be a recurring expenditure.
- C) It must be both petty and of an occasional character.
- D) It must relate to commercial undertakings.
Show Answer
Correct Answer: C) It must be both petty and of an occasional character.
2. Rule 112 of the General Financial Rules, 2017, specifies that reciprocal arrangements cover which type of transactions?
- A) Supplies made by commercial entities.
- B) Services rendered, not supplies made.
- C) Any transaction between Central and State Governments.
- D) Large-value infrastructure projects.
Show Answer
Correct Answer: B) Services rendered, not supplies made.
3. Which of the following entities is explicitly excluded from the purview of reciprocal arrangements under Rule 112 of the General Financial Rules, 2017?
- A) State Government departments.
- B) Central Government ministries.
- C) Commercial undertakings like Railways.
- D) Local bodies.
Show Answer
Correct Answer: C) Commercial undertakings like Railways.
4. If a doubt arises regarding whether a claim falls under the reciprocal arrangement as per Rule 112 of the General Financial Rules, 2017, how should it be resolved?
- A) By decision of the Central Government only.
- B) By mutual consultation.
- C) By decision of the State Government only.
- D) By referring to the Ministry of Finance for a final ruling.
Show Answer
Correct Answer: B) By mutual consultation.
5. According to Rule 112 of the General Financial Rules, 2017, what is the duration for which reciprocal arrangements remain in force for all State Governments?
- A) A maximum of five years.
- B) Until reviewed by the Ministry of Finance.
- C) Without any time limit.
- D) Subject to annual renewal.
Show Answer
Correct Answer: C) Without any time limit.
Frequently Asked Questions
What kind of claims are considered “petty and occasional” under Rule 112 of the General Financial Rules, 2017?
While “petty and occasional” is not strictly defined with monetary limits in Rule 112, the context implies minor, infrequent claims for services. An example given is providing a police escort for a high dignitary, indicating a one-off, relatively low-cost service.
Are all inter-governmental transactions covered by the reciprocal arrangements in Rule 112 of the General Financial Rules, 2017?
No, Rule 112 specifically limits coverage to claims that are both petty and occasional, and relate to services rendered (not supplies). Importantly, claims from commercial undertakings of the Government (like Railways or Department of Post) are explicitly excluded and must be settled through their established procedures.
How are disputes regarding Rule 112 of the General Financial Rules, 2017, resolved?
If a doubt arises as to whether a particular claim falls within or outside the purview of the reciprocal arrangement, Rule 112 mandates that the matter shall be decided by mutual consultation between the involved Central and State Governments.
Key Takeaways
- Rule 112 defines criteria for reciprocal arrangements: claims must be petty and occasional.
- Only services rendered are covered, not general supplies, unless part of a service.
- Commercial undertakings (e.g., Railways, Posts) are excluded from these arrangements.
- Doubts are resolved through mutual consultation, and the arrangements have no time limit.
Conclusion
Rule 112 of The General Financial Rules, 2017, serves as a crucial guideline for efficient inter-governmental financial administration. By clearly delineating the types of claims eligible for reciprocal arrangements, it helps avoid bureaucratic complexities for minor transactions, ensuring that resources are focused on more substantial financial matters while maintaining clarity and accountability in government operations.