Financial Rules (GFR 2017)

Introduction to GFR 2017

General Financial Rules (GFRs) are a compilation of rules and orders of the Government of India to be followed by all while dealing with matters involving public finances. The GFRs were first issued in 1947, and the latest revision is GFR 2017.

These rules are instructions to all Government Departments and Organizations to ensure financial
discipline and accountability.

Canons of Financial Propriety (Rule 21)

Every officer incurring or authorizing expenditure from public moneys should be guided by high standards of financial propriety.

Economy: The expenditure should not be prima facie more than the occasion demands.
Vigilance: Exercise the same vigilance as a person of ordinary prudence would exercise in respect of his own money.
Benefit: The expenditure should not be for the benefit of a particular person or section of the people.
No Profit: No authority should exercise its power of sanctioning expenditure to pass an order which will be directly or indirectly to its own advantage.

Procurement of Goods (Chapter 6)

Procurement of Goods and Services guidelines are crucial.

1. GeM (Government e-Marketplace) - Rule 149

Procurement of Goods and Services available on GeM is Mandatory for Ministries/Departments.

Up to ₹25,000: Direct Purchase from any supplier on GeM.
Above ₹25,000 to ₹5,00,000: Purchase from L1 supplier after comparing at least 3 distinct products/brands.
Above ₹5,00,000: Purchase through Bid/Reverse Auction on GeM.

2. Purchase without Quotation (Rule 154)

Purchase of goods up to the value of ₹25,000 on each occasion may be made without inviting quotations/bids.

3. Purchase Committee (Rule 155)

Purchase of goods costing above ₹25,000 and up to ₹2,50,000 on each occasion recommended by a Local Purchase Committee (3 members).

Types of Bidding (Rule 160-162)

Advertised Tender Enquiry (Open Tender): For procurement >= ₹25 Lakhs.
Limited Tender Enquiry: For procurement < ₹25 Lakhs. Copies sent to limited suppliers.
Two Bid System: Technical Bid + Financial Bid. Used for high-value/complex items.

J&K Financial Code (Basics)

The J&K Financial Code contains rules governing financial control and accounts in the UT of Jammu & Kashmir.

Budget: The Annual Financial Statement of the estimated receipts and expenditure of the State/UT for each financial year.
Re-appropriation: Transfer of savings from one unit of appropriation to meet excess expenditure under another unit.
Contingency Fund: Fund to meet unforeseen expenditure pending authorization by Legislature.

Inventory Management

Dead Stock Register: Record of furniture, fixtures, and plant & machinery.
Physical Verification: Fixed assets should be verified at least once a year (Rule 213).
Disposal of Goods: Surplus or obsolete goods should be disposed of to get the best value (Rule 217).

Practicals & PYQs - GFR

Part A: Practical Scenarios (10 Questions)

Q1. An office wants to buy stationery worth ₹20,000. How should they proceed under GFR 2017?

Rule 154 (Purchase without Quotation): Since the value is up to ₹25,000, they can purchase directly without inviting quotations.

Q2. A department needs a printer costing ₹1,50,000. Procedure?

Rule 149 (GeM): Mandatory procurement through GeM. Since it is between ₹25,000 and ₹5,00,000, select L1 after comparing 3 brands on GeM.

Rule 155 (Purchase Committee): Usually recommended by a Local Purchase Committee.

Q3. A procurement of ₹30 Lakhs is to be made. Which tender method?

Rule 161 (Advertised Tender Enquiry): Since value exceeds ₹25 Lakhs, Open Tender via CPPP and GeM/Department website is required.

Q4. Officer sanctions money for his own relative's contract. Which principle is violated?

Rule 21 (Standards of Financial Propriety): Specifically, "No authority should exercise its power... to its own advantage."

Q5. Goods received are defective. When should the complaint be lodged?

Immediately on receipt. Inspection should be done on delivery.

Q6. Bid Security (Earnest Money) normally ranges between?

Rule 170: 2% to 5% of the estimated value of the goods.

Q7. Performance Security amount?

Rule 171: Usually 5% to 10% of the value of the contract.

Q8. Physical verification of library books (having > 20,000 volumes). Frequency?

Rule 215: At least once in three years (Sample physical verification).

Q9. Difference between 'Vote on Account' and 'Budget'?

Vote on Account: Advance grant to meet expenditure for a part of the year (usually 2 months) pending passing of Budget.

Budget: Comprehensive financial statement for whole year.

Q10. Re-appropriation of funds. Can funds be moved from "Voted" to "Charged"?

No. Funds generally cannot be re-appropriated from Voted to Charged or vice versa without legislative approval.

Part B: Previous Year Questions (PYQs) (10 Questions)

Q11. General Financial Rules (GFR) 2017 replaced: (JKSSB FAA)

GFR 2005.

Q12. Under GFR 2017, purchase of goods up to ₹25,000 can be made:

Without inviting quotations.

Q13. GeM stands for:

Government e-Marketplace.

Q14. Advertised Tender Enquiry is used for procurement of goods of estimated value:

₹25 Lakhs and above.

Q15. Standards of Financial Propriety are mentioned in which Rule of GFR 2017?

Rule 21.

Q16. Performance Security is obtained from the successful bidder to ensure:

Due performance of the contract.

Q17. The primary responsibility for control of expenditure against the grant rests with:

Head of the Department / Controlling Officer.

Q18. Physical verification of fixed assets should be done:

At least once a year.

Q19. Limited Tender Enquiry can be adopted for estimated value up to:

₹25 Lakhs.

Q20. Rule 149 of GFR 2017 relates to:

Procurement through GeM.

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Financial Rules (J&K)