Rule 232 of The General Financial Rules 2017 General Principles for award of Grants in aid for Centrally Sponsored Schemes

Rule 232 of The General Financial Rules 2017 General Principles for award of Grants in aid for Centrally Sponsored Schemes

Original Rule Text

Rule 232 General Principles for award of Grants-in-aid for Centrally Sponsored Schemes. The following principles should be kept in view by Ministries/Departments of the Central Government at the time of designing Centrally Sponsored Schemes for implementation in State Governments or Union Territories and approving and releasing assistance to State Governments or Union Territories for such schemes: – (i) Every Centrally Sponsored Scheme should have a time-bound quantifiable and measurable outcome targets with provisions for periodic monitoring, mid-term evaluation and detailed impact studies. (ii) The scheme should be designed in consultation with States and Union Territories. States should be delegated adequate powers to change the details of the schemes to suit local conditions, subject to reporting such changes to the concerned Ministry or Department. (iii) Where schemes are in operation with similar objectives targeting the same population, the schemes should be converged. (iv) To ensure monitoring and effective control over such schemes, the number of schemes should be restricted, so that the gain from the expenditure on such schemes is maximized. The role of the Central Ministries or Departments should be capacity building, inter-sectoral coordination and detailed monitoring. (v) The release of funds to State Governments and monitoring further utilisation should be undertaken through PFMS. The Ministries or Departments should establish a mechanism to ensure that the funds earlier released have been effectively utilised and that the data and facts reported by the State Governments or Union Territories relating to physical and financial performance are correct. Before releasing further funds, it should also be ensured that the State Governments or Union Territories have the capacity to actually spend the balance from the previous years and the releases during the current year. (vi) The Ministries or Department should focus attention on the attainment of the objectives and not on expenditure only. A mechanism for avoiding release of large part of funds towards the end of the year should be devised and incorporated in the Scheme design itself. (vii) A concurrent monitoring and evaluation mechanism should be built into the Scheme. A periodic review of every Centrally Sponsored Scheme should be undertaken for any required mid-course correction or changes in the scheme design (viii) A post-completion review of every Centrally Sponsored Scheme should be undertaken by the State Government(s) or Union Territories implementing the scheme, highlighting the time and cost overruns, if any, and suggestions for formulating and implementing future schemes. A copy of the review should be obtained by the Ministry concerned and kept in view while formulating new Centrally Sponsored Schemes.

Visual Summary

Outcome-Oriented Design

CSS must have time-bound, quantifiable, and measurable outcome targets with robust monitoring.

State Consultation & Flexibility

Schemes should be designed with States/UTs, allowing local adaptation and reporting changes.

Convergence & Control

Converge similar schemes and restrict their number for effective monitoring and maximized gains.

Executive Summary

Rule 232 of The General Financial Rules, 2017, lays down the fundamental principles for designing and implementing Centrally Sponsored Schemes (CSS). It mandates that these schemes must be outcome-oriented with time-bound, measurable targets, supported by robust monitoring and evaluation mechanisms. The rule emphasizes collaborative design through consultation with State Governments and Union Territories, granting them adequate flexibility to adapt schemes to local needs. Furthermore, it promotes the convergence of schemes with similar objectives and advocates for restricting the total number of schemes to enhance effective control and maximize the impact of expenditure. The Public Financial Management System (PFMS) is designated for fund release and utilization monitoring, ensuring a focus on achieving objectives rather than merely spending funds, and requiring post-completion reviews by implementing States/UTs.

In-Depth Analysis of the Rule

Introduction: Rule 232 provides a comprehensive framework for Central Government Ministries and Departments to ensure the efficient and effective implementation of Centrally Sponsored Schemes (CSS). These principles aim to optimize resource utilization, enhance accountability, and ensure that schemes are responsive to the diverse needs across States and Union Territories.

Breakdown of the Rule:

  • (i) Outcome Targets and Monitoring: Every CSS must be designed with clear, time-bound, quantifiable, and measurable outcome targets. This includes provisions for continuous periodic monitoring, mid-term evaluations, and detailed impact studies to assess effectiveness.
  • (ii) State Consultation and Flexibility: Schemes are to be designed in active consultation with States and Union Territories. States should be empowered with sufficient authority to modify scheme details to align with local conditions, provided such changes are reported to the concerned Central Ministry or Department.
  • (iii) Scheme Convergence: To avoid duplication and maximize efficiency, schemes with similar objectives that target the same population should be converged.
  • (iv) Restricted Schemes and Central Role: The total number of schemes should be limited to ensure effective monitoring and control, thereby maximizing the benefits from expenditure. The Central Ministries’ role is primarily focused on capacity building, inter-sectoral coordination, and detailed monitoring, rather than direct implementation.
  • (v) Fund Release and Monitoring via PFMS: The Public Financial Management System (PFMS) is mandated for releasing funds to State Governments and for monitoring their subsequent utilization. Ministries must establish mechanisms to verify effective utilization and the accuracy of reported physical and financial performance. Before releasing further funds, it is crucial to confirm that States/UTs have the capacity to spend existing balances.
  • (vi) Focus on Objectives, Not Just Expenditure: The emphasis should be on achieving the stated objectives of the scheme, not merely on incurring expenditure. Mechanisms must be integrated into the scheme design to prevent the release of a large proportion of funds towards the end of the financial year, which often leads to rushed and inefficient spending.
  • (vii) Concurrent Monitoring and Evaluation: Each scheme must incorporate a concurrent monitoring and evaluation mechanism. This allows for periodic reviews and necessary mid-course corrections or design changes to ensure the scheme remains on track and effective.
  • (viii) Post-Completion Review: After a CSS is completed, the implementing State Government(s) or Union Territories must undertake a review. This review should highlight any time and cost overruns and provide suggestions for improving future scheme formulation and implementation. A copy of this review is to be considered by the Central Ministry when designing new CSS.

Practical Example: Consider a Centrally Sponsored Scheme for rural sanitation. As per Rule 232, the scheme would define measurable outcomes like ‘X% increase in household toilet coverage by Year Y’ and ‘Z% reduction in open defecation by Year Z’. It would be designed in consultation with State Rural Development Departments, allowing them flexibility to choose appropriate toilet models based on local terrain and water availability. The scheme would integrate with existing health or water supply programs (convergence). Funds would be released and tracked via PFMS, with regular checks on physical progress (e.g., number of toilets constructed, usage rates) rather than just financial expenditure. Mid-term evaluations would allow for adjustments, and a post-completion review would identify best practices and challenges for future sanitation initiatives.

Related Provisions

This rule is closely related to other provisions concerning financial management and grants:

Learning Aids

Mnemonics
  • CSS Outcomes Should Converge Really Promptly, Often Monitored Post-review. (Outcomes, State Consultation, Convergence, Restricted Schemes, PFMS, Objective Focus, Monitoring, Post-completion Review)
Process Flowchart
Design CentrallySponsored SchemeDefine MeasurableOutcome TargetsConsult States/UTs,Delegate PowersConverge SimilarSchemesRestrict Scheme Numbers,Central Role: MonitoringRelease Funds & Monitorvia PFMSFocus on Objectives,Avoid Year-End SpendingImplement ConcurrentMonitoring & EvaluationConduct Post-CompletionReview by States/UTsScheme Refinement/Improvement

Multiple Choice Questions (MCQs)

1. What is a key principle for Centrally Sponsored Schemes under Rule 232 of the General Financial Rules, 2017, regarding outcomes?

  • A) Outcomes should be qualitative only.
  • B) Outcomes must be time-bound, quantifiable, and measurable.
  • C) Outcomes are not a primary concern.
  • D) Outcomes are determined solely by the Central Government.
Show Answer

Correct Answer: B) Outcomes must be time-bound, quantifiable, and measurable.

2. According to Rule 232 of the General Financial Rules, 2017, what is required concerning the design of Centrally Sponsored Schemes in relation to States and Union Territories?

  • A) Schemes must be designed exclusively by the Central Government.
  • B) States and UTs should have no power to change scheme details.
  • C) Schemes should be designed in consultation with States and UTs, with delegated powers for local adaptation.
  • D) States and UTs are only responsible for implementation, not design.
Show Answer

Correct Answer: C) Schemes should be designed in consultation with States and UTs, with delegated powers for local adaptation.

3. Rule 232 of the General Financial Rules, 2017, emphasizes which aspect regarding schemes with similar objectives?

  • A) They should be kept separate to encourage competition.
  • B) They should be converged to maximize gains.
  • C) Their number should be increased.
  • D) They should be redesigned from scratch.
Show Answer

Correct Answer: B) They should be converged to maximize gains.

4. What role does Rule 232 of the General Financial Rules, 2017, assign to Central Ministries/Departments in relation to Centrally Sponsored Schemes?

  • A) Primary role in direct implementation.
  • B) Capacity building, inter-sectoral coordination, and detailed monitoring.
  • C) Sole responsibility for financial audits.
  • D) Setting all specific targets without State input.
Show Answer

Correct Answer: B) Capacity building, inter-sectoral coordination, and detailed monitoring.

5. Regarding fund release and monitoring for Centrally Sponsored Schemes, Rule 232 of the General Financial Rules, 2017, mandates the use of which system?

  • A) Manual ledger system.
  • B) State Treasury Accounts only.
  • C) Public Financial Management System (PFMS).
  • D) Direct bank transfers without central oversight.
Show Answer

Correct Answer: C) Public Financial Management System (PFMS).

Frequently Asked Questions

Q1: What is the primary focus of Centrally Sponsored Schemes under Rule 232 of the General Financial Rules, 2017?

A1: The primary focus is on achieving time-bound, quantifiable, and measurable outcome targets, rather than merely on expenditure.

Q2: How does Rule 232 of the General Financial Rules, 2017, ensure State involvement in Centrally Sponsored Schemes?

A2: It mandates that schemes should be designed in consultation with States and Union Territories, and adequate powers should be delegated to them to modify scheme details to suit local conditions.

Q3: What is the significance of PFMS in Centrally Sponsored Schemes as per Rule 232 of the General Financial Rules, 2017?

A3: PFMS is mandated for the release of funds to State Governments and for monitoring their utilization, ensuring effective control and transparency over scheme finances.

Key Takeaways

  • Centrally Sponsored Schemes (CSS) must be designed with time-bound, quantifiable, and measurable outcome targets, supported by robust monitoring and evaluation.
  • Active consultation with States and Union Territories is crucial for scheme design, with provisions for local adaptation.
  • Convergence of schemes with similar objectives and restricting their number are essential for effective control and maximizing gains.
  • The Public Financial Management System (PFMS) is mandatory for fund release and monitoring, ensuring effective utilization and accountability.
  • A strong emphasis is placed on achieving scheme objectives rather than merely focusing on expenditure, with mechanisms to prevent year-end spending rushes.

Conclusion

Rule 232 of The General Financial Rules, 2017, provides a comprehensive and forward-looking framework for the design and implementation of Centrally Sponsored Schemes. By emphasizing outcome-oriented planning, collaborative design with States, efficient fund management through PFMS, and continuous monitoring, it aims to maximize the impact and accountability of government spending on these crucial development programs. Adherence to these principles is vital for ensuring that public funds are utilized effectively to achieve national development goals.

Related posts:

  1. Rule 86 of The General Financial Rules 2017 Public Financial Management System PFMS
  2. Rule 87 of The General Financial Rules 2017 Direct Benefit Transfer
  3. Rule 233 of The General Financial Rules 2017 Funding of Sponsored Projects or Schemes
  4. Rule 231 of The General Financial Rules 2017 Grants to Voluntary Organisations