Rule 77 of The General Financial Rules 2017 Government Accounts Structure
Original Rule Text
Visual Summary
Government accounts are divided into Consolidated Fund, Contingency Fund, and Public Account.
Split into Revenue and Capital Divisions, further categorized by sectors and Major Heads.
Contingency Fund for unforeseen expenses, Public Account for debt, deposits, and remittances.
Executive Summary
Rule 77 of The General Financial Rules, 2017, outlines the fundamental structure of Government accounts, dividing them into three distinct parts: the Consolidated Fund, the Contingency Fund, and the Public Account. The Consolidated Fund is further elaborated with Revenue and Capital divisions, which are then systematically broken down into various sectors and Major Heads for detailed classification. The Contingency Fund is specifically designated for transactions related to unforeseen expenditures, while the Public Account serves as the repository for transactions concerning debt (excluding those in Part-I), reserve funds, deposits, advances, suspense, remittances, and cash balances. This rule establishes a clear framework for managing the diverse financial operations of the Government.
In-Depth Analysis of the Rule
Rule 77 is a foundational provision that dictates the architectural blueprint of Government accounts, ensuring a systematic and transparent approach to financial management. It categorizes all government financial transactions into three primary segments, each serving a distinct purpose and governed by specific accounting principles.
Breakdown of the Rule
- Part-I – Consolidated Fund: This is the most comprehensive part, encompassing both ‘Revenue’ and ‘Capital’ divisions.
- The Revenue Division handles all proceeds from taxation and other revenue receipts, as well as the expenditure met from these revenues.
- The Capital Division includes sections for capital receipts, capital expenditure, and public debt, loans, and advances.
- Both divisions are further organized into broad sectors like ‘General Services’, ‘Social and Community Services’, and ‘Economic Services’, which are then subdivided into Major Heads for granular classification.
- Part-II – Contingency Fund: This fund is specifically established under Article 267 of the Constitution (or Section 48 of Government of Union Territories Act, 1963) to meet unforeseen expenditures. Transactions here are recorded under a single Major Head, which can be further broken down into Minor, Sub, and/or Detailed Heads.
- Part-III – Public Account: This part records transactions that do not fall under the Consolidated Fund or Contingency Fund. It includes debt (other than those in Part-I), reserve funds, deposits, advances, suspense accounts, remittances, and cash balances.
Practical Example
Imagine the annual budget. All tax collections (e.g., income tax, GST) are credited to the Revenue Division of the Consolidated Fund. When the government spends on salaries or public services, it’s debited from the Expenditure Heads (Revenue Account) within the Consolidated Fund. If a natural disaster strikes, funds for immediate relief might be drawn from the Contingency Fund. Finally, public provident fund deposits or government employee salaries held temporarily before disbursement would be managed under the Public Account.
Related Provisions
Understanding Rule 77 is enhanced by examining other related provisions in the General Financial Rules, 2017:
- Rule 71 of The General Financial Rules 2017 Preparation and Presentation of Accounts: Details the overall process of preparing and presenting Union Government accounts.
- Rule 72 of The General Financial Rules 2017 Form of Accounts: Prescribes the specific forms in which the accounts of the Union Government are to be kept.
- Rule 78 of The General Financial Rules 2017 Classification of Transactions in Government Accounts: Explains the principles for classifying transactions within the main divisions of Government accounts.
Learning Aids
Mnemonics
- To remember the three main parts of Government accounts: Can Central Powers Always Control Public Affairs? (Consolidated Fund, Contingency Fund, Public Account)
Process Flowchart
Multiple Choice Questions
1. How many main parts are Government accounts kept in, according to Rule 77 of The General Financial Rules, 2017?
- A) Two
- B) Three
- C) Four
- D) Five
Show Answer
Correct Answer: B) Three
2. Which of the following is NOT a main division of the Consolidated Fund as per Rule 77 of The General Financial Rules, 2017?
- A) Revenue Division
- B) Capital Division
- C) Public Debt Division
- D) Expenditure Heads (Revenue Account)
Show Answer
Correct Answer: C) Public Debt Division
3. The Contingency Fund, as described in Rule 77 of The General Financial Rules, 2017, records transactions connected with what?
- A) Proceeds of taxation
- B) Unforeseen expenditure
- C) Public debt
- D) Reserve funds
Show Answer
Correct Answer: B) Unforeseen expenditure
4. According to Rule 77 of The General Financial Rules, 2017, which part of Government accounts records transactions relating to debt (other than those in Part-I), reserve funds, and deposits?
- A) Consolidated Fund
- B) Contingency Fund
- C) Public Account
- D) Revenue Division
Show Answer
Correct Answer: C) Public Account
5. Under Rule 77 of The General Financial Rules, 2017, the Revenue Division of the Consolidated Fund deals with:
- A) Capital expenditure
- B) Public debt
- C) Proceeds of taxation and other revenue receipts
- D) Advances and suspense
Show Answer
Correct Answer: C) Proceeds of taxation and other revenue receipts
Frequently Asked Questions
What are the three main parts of Government accounts as per Rule 77 of The General Financial Rules, 2017?
According to Rule 77, Government accounts are kept in three parts: the Consolidated Fund (Part-I), the Contingency Fund (Part-II), and the Public Account (Part-III).
How is the Consolidated Fund structured according to Rule 77 of The General Financial Rules, 2017?
The Consolidated Fund is divided into two Divisions: ‘Revenue’ and ‘Capital’. The Revenue Division deals with taxation and revenue expenditure, while the Capital Division handles capital receipts, capital expenditure, and public debt. Both are further categorized into sectors and Major Heads.
What is the purpose of the Public Account under Rule 77 of The General Financial Rules, 2017?
The Public Account records transactions relating to debt (other than those in Part-I), reserve funds, deposits, advances, suspense, remittances, and cash balances.
Key Takeaways
- Government accounts are fundamentally divided into three distinct parts: Consolidated Fund, Contingency Fund, and Public Account.
- The Consolidated Fund manages both revenue and capital transactions, categorized into specific sectors and Major Heads.
- The Contingency Fund is dedicated to unforeseen expenditures, while the Public Account handles various financial liabilities like debt, deposits, and remittances.
- This structured approach ensures clear segregation and accountability in government financial management.
Conclusion
Rule 77 provides the essential framework for understanding how the Government’s finances are organized and managed. By clearly delineating the Consolidated Fund, Contingency Fund, and Public Account, it lays the groundwork for financial transparency, accountability, and efficient resource allocation, which are critical for sound governance.