Rule 68 of The General Financial Rules 2017 Inevitable Payments
Original Rule Text
(i) Subject to the provisions of Article 114(3) of the Constitution, money indisputably payable by Government shall not ordinarily be left unpaid.
(ii) Suitable provision for anticipated liabilities shall invariably be made in Demands for Grants to be placed before Parliament.
Visual Summary
Government must pay indisputable dues promptly.
Budget must include provisions for expected payments.
Payments are subject to constitutional provisions.
Executive Summary
Rule 68 of The General Financial Rules, 2017, titled “Inevitable Payments,” mandates that the Government must not delay payments for amounts that are indisputably due. Furthermore, it requires that suitable provisions for all anticipated liabilities be included in the Demands for Grants presented to Parliament. This rule underscores the principles of financial prudence and timely discharge of obligations, ensuring that the Government’s financial management is both responsible and transparent, especially concerning its undisputed financial commitments and future budgetary planning.
In-Depth Analysis of the Rule
Rule 68 addresses two fundamental aspects of government financial management: the prompt settlement of undisputed dues and the proactive budgeting for future liabilities. These provisions are critical for maintaining financial discipline and public trust.
Breakdown of the Rule:
- Indisputable Payments (Sub-rule i): This clause, subject to Article 114(3) of the Constitution, stipulates that any money that is clearly and undeniably owed by the Government should not be left unpaid. This emphasizes the importance of timely discharge of financial obligations to maintain credibility and avoid unnecessary disputes or penalties.
- Provision for Anticipated Liabilities (Sub-rule ii): It mandates that the Government must always make adequate provisions for expected future financial obligations within the “Demands for Grants” presented to Parliament. This ensures that the budget accurately reflects not just immediate needs but also foreseeable future commitments, promoting sound financial planning and preventing unforeseen shortfalls.
Practical Example:
Consider a government department that has entered into a contract for office supplies. Once the supplies are delivered and verified, the invoice becomes an “indisputably payable” amount. Rule 68(i) dictates that this invoice must be paid promptly. Simultaneously, when preparing the annual budget, the department must, under Rule 68(ii), make a “suitable provision for anticipated liabilities” for similar office supply contracts expected in the coming financial year, ensuring funds are allocated in the Demands for Grants to cover these future obligations.
Related Provisions
Understanding Rule 68 is enhanced by examining related provisions that govern financial management and budgetary processes:
- Rule 67: Advance from Contingency Fund – This rule outlines the process for drawing advances from the Contingency Fund to meet unforeseen expenditures, which complements Rule 68’s emphasis on making provisions for anticipated liabilities.
- Rule 61: Excess Expenditure – Deals with situations where expenditure exceeds budget provisions, highlighting the importance of accurate forecasting and provision-making as mandated by Rule 68.
- Rule 25: Provision of funds for sanction – This rule requires all sanctions to expenditure to indicate details of fund provisions, directly supporting Rule 68(ii) on making suitable provisions for liabilities.
Learning Aids
Mnemonics:
- Inevitable Payments: P.A.Y. – Promptly pay undisputed dues. Anticipate liabilities in budget. Year-round financial planning.
Process Flowchart:
Multiple Choice Questions
1. According to Rule 68(i) of The General Financial Rules, 2017, what is the general principle regarding money indisputably payable by the Government?
- A) It may be left unpaid if funds are scarce.
- B) It shall not ordinarily be left unpaid.
- C) It can be postponed indefinitely.
- D) It requires special parliamentary approval for payment.
Show Answer
Correct Answer: B) It shall not ordinarily be left unpaid.
2. Rule 68(ii) of The General Financial Rules, 2017, mandates that suitable provision for anticipated liabilities must be made in which document?
- A) The Annual Audit Report.
- B) The Contingency Fund Statement.
- C) Demands for Grants to be placed before Parliament.
- D) The Ministry’s Internal Financial Review.
Show Answer
Correct Answer: C) Demands for Grants to be placed before Parliament.
3. The principle of not leaving indisputably payable money unpaid, as per Rule 68(i) of The General Financial Rules, 2017, is subject to the provisions of which Article of the Constitution?
- A) Article 266(1)
- B) Article 283(1)
- C) Article 114(3)
- D) Article 267(1)
Show Answer
Correct Answer: C) Article 114(3)
4. What is the primary purpose of making suitable provision for anticipated liabilities in Demands for Grants, as required by Rule 68(ii) of The General Financial Rules, 2017?
- A) To allow for ad-hoc expenditure without further approval.
- B) To ensure financial prudence and avoid unforeseen shortfalls.
- C) To reduce the overall budget allocation for the year.
- D) To facilitate re-appropriation of funds between different heads.
Show Answer
Correct Answer: B) To ensure financial prudence and avoid unforeseen shortfalls.
5. Which of the following best describes “Inevitable Payments” under Rule 68 of The General Financial Rules, 2017?
- A) Payments that are subject to negotiation and potential reduction.
- B) Payments that are discretionary and can be deferred.
- C) Money indisputably payable by Government.
- D) Payments that require a special sanction from the Ministry of Finance.
Show Answer
Correct Answer: C) Money indisputably payable by Government.
Frequently Asked Questions
What does “indisputably payable” mean in the context of Rule 68 of The General Financial Rules, 2017?
It refers to amounts that are clearly and undeniably owed by the Government, where there is no legitimate dispute regarding the obligation or the amount due. These payments should be settled without delay.
Why is it important to make provisions for anticipated liabilities in Demands for Grants under Rule 68(ii) of The General Financial Rules, 2017?
Making provisions for anticipated liabilities ensures sound financial planning and prevents unforeseen budgetary shortfalls. It allows Parliament to approve funds for both current and future expected obligations, promoting transparency and fiscal responsibility.
Does Rule 68 of The General Financial Rules, 2017, allow for any exceptions to prompt payment of indisputable dues?
Yes, Rule 68(i) states that such payments shall not ordinarily be left unpaid, but it is “Subject to the provisions of Article 114(3) of the Constitution.” This implies that while prompt payment is the norm, constitutional procedures related to appropriation of funds must still be followed.
Key Takeaways
- Government must promptly pay all indisputably due amounts.
- Anticipated financial liabilities must be provisioned for in the Demands for Grants.
- The rule promotes fiscal discipline and transparent financial management.
- Compliance with Article 114(3) of the Constitution is a foundational aspect of these payment obligations.
Conclusion
Rule 68 of The General Financial Rules, 2017, serves as a cornerstone for responsible financial governance, ensuring that the Government honors its clear financial commitments without delay and plans meticulously for future obligations. Adherence to this rule is vital for maintaining the integrity of public finance and fostering confidence in governmental operations.