Rule 62 of The General Financial Rules 2017 Surrender of Savings and Expenditure Control
Original Rule Text
Visual Summary
Departments must surrender anticipated savings to the Finance Ministry by prescribed dates.
Savings or unutilised provisions must be surrendered immediately, not held for future excesses.
Rushing expenditure at year-end is a breach of financial propriety and must be avoided.
Executive Summary
Rule 62 of the General Financial Rules, 2017 mandates Central Government departments to surrender all anticipated financial savings and unutilized provisions to the Finance Ministry before the close of the financial year. It explicitly prohibits holding back savings for future use and strongly condemns the rush of expenditure towards the year-end, emphasizing adherence to monthly and quarterly expenditure plans to maintain financial propriety.
In-Depth Analysis of the Rule
Introduction: Rule 62 is a cornerstone of prudent financial management within the Central Government, focusing on the efficient utilization and timely surrender of public funds. It aims to prevent fiscal indiscipline and ensure that budgetary allocations are managed with utmost responsibility.
Breakdown of the Rule:
- Mandatory Surrender of Savings (Rule 62(1)): Central Government departments are required to surrender all anticipated savings from grants or appropriations to the Finance Ministry by specified dates before the financial year ends. Funds not utilized by year-end automatically lapse.
- Immediate Surrender of Unutilized Provisions (Rule 62(2)): Any savings or provisions that cannot be profitably utilized must be surrendered as soon as they are foreseen, without waiting until the end of the year. Departments are explicitly forbidden from holding these savings in reserve for potential future excesses.
- Prohibition of Year-End Expenditure Rush (Rule 62(3)): The rule strictly prohibits a rush of expenditure, especially in the closing months of the financial year, deeming it a breach of financial propriety. Financial Advisers are tasked with ensuring adherence to stipulated Monthly Expenditure Plans and relevant guidelines from the Budget Division.
- Adherence to Quarterly Expenditure Plans (Rule 62(4)): Financial Advisers must also ensure compliance with Quarterly Expenditure Plans and guidelines issued by the Ministry of Finance, reinforcing disciplined spending throughout the year.
Practical Example: A Ministry receives an annual budget of Rs. 100 crore for a specific project. By December, it realizes that due to unforeseen delays, only Rs. 70 crore will be spent. According to Rule 62(1) and 62(2), the Ministry must immediately identify and surrender the anticipated Rs. 30 crore saving to the Finance Ministry, rather than trying to spend it hastily on non-essential items in January-March or holding it back for next year’s budget. Failure to do so, especially by rushing expenditure, would be a breach of financial propriety under Rule 62(3).
Related Provisions
Rule 62 is closely related to several other provisions that govern financial management and expenditure control:
- Rule 26 of The General Financial Rules 2017 Responsibility of Controlling Officer in respect of Budget Allocation: This rule outlines the duties of a controlling officer to ensure expenditure does not exceed budget allocation and is incurred for the intended purpose.
- Rule 61 of The General Financial Rules 2017 Excess Expenditure: This rule details the procedures and approvals required when expenditure exceeds budget provisions.
- Rule 65 of The General Financial Rules 2017 Re-appropriation of Funds: This rule governs the transfer of funds from one primary unit of appropriation to another, which can be a mechanism to manage funds before surrendering savings.
Learning Aids
Mnemonics
- SURRENDER: Surrender Unused Resources Regularly, Eliminate Negligent Delays, Ensure Responsible Expenditure.
Process Flowchart
Multiple Choice Questions
1. Which of the following is a mandatory requirement for Central Government departments under Rule 62 of the General Financial Rules, 2017?
- A) Holding anticipated savings in reserve for future projects.
- B) Surrendering anticipated savings to the Finance Ministry by prescribed dates.
- C) Rushing expenditure in the closing months of the financial year.
- D) Utilizing all funds provided, even if not profitably, to avoid lapse.
Show Answer
Correct Answer: B
2. According to Rule 62 of the General Financial Rules, 2017, what happens to funds provided during a financial year if they are not utilized before its close?
- A) They are automatically carried forward to the next financial year.
- B) They must be re-appropriated to other departments.
- C) They stand lapsed at the close of the financial year.
- D) They can be used for new services without further sanction.
Show Answer
Correct Answer: C
3. Rule 62 of the General Financial Rules, 2017 states that a rush of expenditure, particularly in the closing months of the Financial Year, shall be regarded as what?
- A) An efficient use of remaining budget.
- B) A strategic financial maneuver.
- C) A breach of financial propriety.
- D) A permissible practice under certain conditions.
Show Answer
Correct Answer: C
4. Who is responsible for ensuring adherence to the stipulated Monthly Expenditure Plan and guidelines under Rule 62 of the General Financial Rules, 2017?
- A) The Accounts Officer.
- B) The Head of Department.
- C) The Financial Advisers of the Ministries/Departments.
- D) The Comptroller and Auditor General.
Show Answer
Correct Answer: C
5. Under Rule 62 of the General Financial Rules, 2017, when should savings or provisions that cannot be profitably utilized be surrendered?
- A) At the very end of the financial year.
- B) Only if explicitly requested by the Finance Ministry.
- C) Immediately, once they are foreseen.
- D) They should be held in reserve for possible future excesses.
Show Answer
Correct Answer: C
Frequently Asked Questions
What is the primary purpose of Rule 62 of the General Financial Rules, 2017?
The primary purpose is to ensure fiscal discipline by mandating the timely surrender of anticipated savings and unutilized funds, preventing year-end spending rushes, and promoting adherence to expenditure plans.
Can a department hold onto anticipated savings for future use under the General Financial Rules, 2017?
No, Rule 62(2) explicitly states that savings or provisions that cannot be profitably utilized shall be surrendered immediately they are foreseen, without waiting till the end of the year, and no savings shall be held in reserve for possible future excesses.
Who monitors compliance with expenditure plans under Rule 62 of the General Financial Rules, 2017?
The Financial Advisers of the respective Ministries/Departments are responsible for ensuring adherence to both Monthly and Quarterly Expenditure Plans and the guidelines issued by the Ministry of Finance and Budget Division.
Key Takeaways
- Mandatory surrender of anticipated savings to the Finance Ministry.
- Prohibition against holding back unutilized funds for future use.
- Strict avoidance of year-end spending rushes as a breach of financial propriety.
- Adherence to Monthly and Quarterly Expenditure Plans is crucial for financial discipline.
Conclusion
Rule 62 of the General Financial Rules, 2017 serves as a critical directive for maintaining financial discipline and propriety across Central Government departments. By enforcing the timely surrender of unutilized funds and prohibiting wasteful year-end spending, it ensures that public resources are managed efficiently and transparently, aligning expenditure with actual needs and approved plans.