Rule 141 of The General Financial Rules 2017 Review of Projects
Original Rule Text
Visual Summary
Mandatory review for projects ≥ Rs. 100 Crore.
Committee with Admin Ministry, Finance, Executing Agency.
Committee can accept variations up to 10% of estimates.
Executive Summary
Rule 141 of The General Financial Rules, 2017, outlines the framework for reviewing government projects to ensure financial oversight and control. It mandates the establishment of a Review Committee for projects costing Rs. 100 crore or more, comprising representatives from the Administrative Ministry, Finance (Internal Finance Wing), and the Executing Agency. This committee is empowered to approve variations up to 10% of the original approved estimates. For projects below Rs. 100 crore, the Administrative Ministry/Department has the discretion to set up a similar review mechanism with the same variation acceptance limit, ensuring flexibility while maintaining financial propriety.
In-Depth Analysis of the Rule
Introduction: Rule 141 is a critical provision within the General Financial Rules, 2017, designed to instill financial discipline and robust oversight in government project execution. It establishes clear guidelines for the review of projects, particularly focusing on cost control and the management of variations from initial estimates.
Breakdown of the Rule:
- Projects Costing Rs. 100 Crore or Above: For large-scale projects, the rule mandates the formation of a dedicated Review Committee. This committee must include representatives from the Administrative Ministry, the Finance (Internal Finance Wing), and the Executing Agency. Its primary role is to continuously review the progress of the work.
- Powers of the Review Committee: The committee possesses the authority to accept variations in project costs, provided these variations do not exceed 10% of the originally approved estimates. This delegation of power aims to streamline minor adjustments without requiring higher-level sanctions for every small change.
- Projects Costing Less Than Rs. 100 Crore: For smaller projects, the rule grants discretion to the Administrative Ministry/Department. They can decide whether to establish a suitable review mechanism. If such a mechanism is set up, it also has the power to accept variations within the same 10% limit of the approved estimates.
Practical Example: Consider a Ministry undertaking a major infrastructure project with an approved cost of Rs. 500 crore. As per Rule 141, a Review Committee would be constituted. During the project’s execution, unforeseen site conditions lead to a proposed cost increase of Rs. 40 crore (8% of the original estimate). The Review Committee, after careful deliberation and justification from the Executing Agency, can approve this variation, as it falls within the 10% limit. This avoids delays that would arise from seeking approval from a higher authority for such a minor adjustment.
Related Provisions
Understanding Rule 141 is enhanced by considering other related provisions in the General Financial Rules, 2017:
- Rule 136 of The General Financial Rules 2017 General Rules for Works: This rule lays down the fundamental requirements for commencing works, including administrative approval, expenditure sanction, detailed design, and estimates, which form the basis for project costs reviewed under Rule 141.
- Rule 140 of The General Financial Rules 2017 Works Entrusted to Public Works Organisations: This rule details the process for entrusting original/minor works and repair works to Public Works Organisations or Public Sector Undertakings, whose execution would subsequently be subject to review under Rule 141.
Learning Aids
Mnemonics
- Project Review: 100 Crore Committee, 10% Variation. (Helps remember the key thresholds and review body.)
Process Flowchart
Multiple Choice Questions
1. What is the primary purpose of Rule 141 of the General Financial Rules, 2017?
- A) To define procurement procedures for goods.
- B) To establish a framework for project review and variation acceptance.
- C) To outline rules for inter-departmental adjustments.
- D) To specify conditions for grants-in-aid.
Show Answer
Correct Answer: B) To establish a framework for project review and variation acceptance.
2. For a project costing Rs. 100 crore or above, which entities must be represented in the Review Committee as per Rule 141 of the General Financial Rules, 2017?
- A) Administrative Ministry, Audit Officer, and Executing Agency.
- B) Finance Ministry, Planning Commission, and Administrative Ministry.
- C) Administrative Ministry, Finance (Internal Finance Wing), and Executing Agency.
- D) Comptroller and Auditor General, Finance Ministry, and Project Manager.
Show Answer
Correct Answer: C) Administrative Ministry, Finance (Internal Finance Wing), and Executing Agency.
3. What is the maximum percentage of variation from approved estimates that a Review Committee can accept for projects costing Rs. 100 crore or above, according to Rule 141 of the General Financial Rules, 2017?
- A) 5%
- B) 10%
- C) 15%
- D) 20%
Show Answer
Correct Answer: B) 10%
4. Under Rule 141 of the General Financial Rules, 2017, for works costing less than Rs. 100 crores, who has the discretion to set up a suitable mechanism for review and acceptance of variation?
- A) The Finance Ministry.
- B) The Executing Agency.
- C) The Administrative Ministry/Department.
- D) The Comptroller and Auditor General.
Show Answer
Correct Answer: C) The Administrative Ministry/Department.
5. Which of the following is NOT a direct power of the Review Committee for projects costing Rs. 100 crore or above, as per Rule 141 of the General Financial Rules, 2017?
- A) To review the progress of the work.
- B) To accept variations within 10% of approved estimates.
- C) To sanction new projects exceeding Rs. 100 crore.
- D) To include representatives from the Administrative Ministry.
Show Answer
Correct Answer: C) To sanction new projects exceeding Rs. 100 crore.
Frequently Asked Questions
What is the role of the Review Committee under Rule 141 of the General Financial Rules, 2017?
The Review Committee, for projects costing Rs. 100 crore or more, is responsible for reviewing the progress of the work and has the power to accept variations up to 10% of the approved estimates. It comprises representatives from the Administrative Ministry, Finance (Internal Finance Wing), and the Executing Agency.
Does Rule 141 of the General Financial Rules, 2017 apply to all projects regardless of cost?
Rule 141 mandates a Review Committee for projects costing Rs. 100 crore or above. For works costing less than Rs. 100 crore, it is at the discretion of the Administrative Ministry/Department to set up a suitable review mechanism.
What happens if a project’s variation exceeds 10% of the approved estimates under Rule 141 of the General Financial Rules, 2017?
The Review Committee’s power to accept variations is limited to 10% of the approved estimates. If a variation exceeds this limit, it would fall outside the committee’s delegated authority and would likely require a fresh approval process from a higher competent authority, potentially involving a supplementary sanction or revised administrative approval.
Key Takeaways
- Rule 141 establishes a structured review process for government projects.
- Projects costing Rs. 100 crore or more require a mandatory Review Committee with specific representation.
- Review bodies (committees or discretionary mechanisms) can accept cost variations up to 10% of approved estimates.
- Administrative Ministries have discretion for review mechanisms for projects under Rs. 100 crore.
Conclusion
Rule 141 of The General Financial Rules, 2017, is instrumental in fostering financial accountability and efficient project management within government operations. By establishing clear thresholds for project review and empowering designated committees to manage minor cost variations, it ensures that public funds are utilized judiciously while allowing for necessary operational flexibility. This rule underscores the government’s commitment to transparent and controlled expenditure in project execution.