Government Account Rule 1990

• As per Article 150 of the constitution the

president on the advice of CAG makes the rules
relating to the form of accounts of union and
states.
 Rule 1. Short Title and Commencement
.
These rules may be called the
"GOVERNMENT ACCOUNTING RULES
1990" and will come into force with
effect from 1st April, 1990.
 2. Definitions
Accountant General- Head of the office
Bank- SBI acting as agent of RBI
C&AG- Appointed under article 148 of the constitution by
the president
CGA –controller General of accounts– under the ministry
of finance ( Department of Expenditure)- Responsible for
prescribing the form of accounts of union and states and
frame the rules /manuals on the advice of CAG
• Consolidated fund- Under Article 266(1) of the
constitution Net proceeds of certain taxes/duties , all
revenues received by Government , all loans raised by
Govt, all money received by repayment of loans shall
embrace the Consolidated fund of India or the state as
the case may be
• Contingency Fund-Under Article 267 of the constitution
contingency fund established by parliament /state
legislature in form of an imprest amount to meet the
unforeseen expenditure which shall be recouped.
• Public Account- under article 266(2) of the constitution
of India all other public money except under
consolidated fund received by Government of india
shall be credit to the public account.
• Government- means the Central (Union) Government or
a State Government, or a Union Territory Government,
or all the three, as the context may imply
• Chief Accounting Authority', means the Secretary of a Ministry or Department of
the Government of India in which the Departmentalised System of Accounting has
been introduced and in the case of a Union Territory with separated accounts, its
Chief Secretary/ Chief Commissioner.
• 'Civil Accounts Officer', means an Accounts Officer subordinate to the Comptroller
and Auditor General, or a Principal Accounts Officer and or Pay and Accounts Officer
functioning under the Scheme of Departmentalisation of Central Government (Civil)
Accounts or under separated accounts set up of a Union Territories, Government or
Administration as the context may imply. The expression 'Civil Accounts Office'
should also be construed accordingly.
 Rule 3
• Articles of the Constitution etc. to be kept in view in
devising the form of accounts
• The form of accounts of the Union, States and Union
Territory Governments shall be devised keeping in view
the provisions of various articles of the Constitution and
Sections of Union Territories Act, 1963, and in
particular, of those indicated and reproduced in
Appendix I to these rules
 Rule 4
• Annual Accounts-these accounts are compiled by the
authorities authorized to maintain the accounts of
central govt/state govt/union teritory govt with
legislature assembly . The annual receipts and
disbursements are to be prepared and got certified by
C&AG. The receipt of CAG relating to these accounts
shall be submitted to president /Governor/Administrator
of UT for causing to be laid before parliament/State
legislature/UT with Legislature assembly
 Rule 5
• Subsidiary instructions in relation to these rules
will be issued by Central Government in Ministry
of Finance on the advice of CAG
 Rule 6
the forms of accounts (including appropriation accounts), relating to
Railways, Posts, Telecommunications and Defence Department, may be
determined by the Departmental Accounting authorities within such range
and covering such aspects as may be prescribed by the Central
Government in the Ministry of Finance (Department of Expenditure—
Controller General of Accounts), on the advice of the Comptroller and
Auditor General of India.
Rule 7 Agreements of the Central Government with the Reserve Bank

• The Central Government has entered into an agreement with the

Reserve Bank of India by virtue of which the general banking
business of the Government (in which business is included the
receipt, collection, payment and remittance of moneys on behalf
of the Government) is carried on and transacted by the Reserve
Bank in accordance with and subject to the provisions of the
agreement and of the Reserve Bank of India Act, 1934, and also in
accordance with and subject to such orders as may, from time to
time be given to the Reserve Bank by the Central Government.
 Rule 8 Account of central Government with bank
• The receipt/ Disbursement of a particular Ministry/Department
to be transacted through RBI or any authorized bank. Such
bank will maintain receipt account for each Department
/Ministry and shall sends accounts of the transactions to PAO
of the concerned ministry or Department
Rule 9& 10 Accounts of state Government with Bank

• Each state Government except J&K has made a

separate agreement with RBI for the General Banking of
the business of the state Government.
 Rule 11
• Complete accounts of the Central Government and state Government
shall be maintained by CAS( Central Accounts section) of RBI at Nagpur
which acts as a clearing house for adjustments of all the transactions
between different states and all the transactions between central and
states.
• Broad outline of the accounts /Feeder network and system of
accounts of Central Government/State Government/UT
• All receipts of Central Government/UT shall be paid into banks
.Drawals shall be made by cheque. These shall be accounted
for by the bank as receipts and payments on behalf of the
ministry /Department of the central Government for this daily
receipt and payment scroll supported by
challans/vouchers.These shall be sent by the bank to the
account office of the ministry or Department .From the
accounts a classified abstract shall be compiled by PAO which
shows the monthly receipts of the Ministry or Department.
• From this a consolidated abstract showing progressive total
month by month under the major
head/Minor/Subhead/detailed head will be compiled. This will
be sent to Principal Pay and accounts office(PPAO) in the
ministry and Department.
Rule 17. Authorities responsible for the preparation of Annual Accounts
of the Central Government, State and Union Territories Governments

1) The annual accounts (including Appropriation Accounts) of

the Central Government and of each State, Union Territory
Government shall be prepared in the form prescribed by the
President on the advice of the Comptroller and Auditor General
of India under Article 150 of the Constitution of India. These
Accounts shall be submitted to the respective State/Union
Territory Legislature, and to Parliament on or before such dates
as may be determined with the concurrence of the Government
concerned.
• (2) Annual Accounts (including Appropriation Accounts) in respect of
State Governments, and Union Territory Governments with Legislature
are prepared by the concerned Accountant General and submitted to
the Comptroller and Auditor General of India for approval and
transmission to the Governor of the State, Administrator of the Union
Territory Government concerned, along with his report thereon in terms
of Article 151 (2) of the Constitution/Section 49 of Union Territories Act,
1963 and Section 11 of the Comptroller and Auditor General's (Duties,
Powers and Conditions of Service) Act, 1971 for being laid before the
Legislature.
• (3) Appropriation Accounts of Central Ministries (other than Ministry
of Railways) and of Central Civil Departments shall be prepared by
the respective Ministries and Departments under the guidance and
supervision of the Controller General of Accounts, and signed by
their Chief Accounting Authority, Union Government Appropriation
Accounts (Civil) required to be submitted to Parliament, shall be
prepared by the Controller General of Accounts by condensing and
consolidating the aforesaid Appropriation Accounts.
• Appropriation Accounts pertaining to Departments of Posts,
Telecommunications, Railways and Defence shall be prepared and
signed by the Secretaries to the Department of Posts, Department of
Telecommunications, Financial Commissioner, Railway Board and
Secretary (Defence Finance) respectively
(4) Annual accounts of the Government of India as a whole (including
transactions of Departments of Posts, Telecommunications, Defence,
Railways. Union Territory Administration and transactions under Public
Account of India, Accounts of Union Territory Governments with Legislatures
showing under the respective heads the annual receipts and disbursement
for the purpose of the Union, shall be prepared by the Controller General of
Accounts.
5) The Accounts mentioned in Sub-rules (3) and (4) above, shall be prepared
by the respective authorities on dates mutually agreed upon with the
Comptroller and Auditor General of India in the form prescribed by the
President on the advice of the Comptroller and Auditor General and sent to
the latter for recording his
certificate. The certified annual accounts and the Reports relating to the
accounts shall be submitted by the Comptroller and Auditor General to the
President in accordance with the provisions of Section 11 of the Comptroller
and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971
and clause (1) of Article 151 of the Constitution of India.
 Rule 18 Proforma accounts
• Operation of some department include undertaking of commercial and
quasi commercial nature( like industrial factory store) for the benefit of
the department the financial results are to be expressed to know the
cost of services its maintains the capital, manufacturing , Trading, Profit
and loss account. These accounts are kept on a proforma basis outside
the general accounts. For example Irrigation, Navigation, Embankment
and drainage works ,Government residential building. The form shall be
prescribed by central Government on advice of CAG
• Pro forma accounts are also sometimes required to be prepared for
transactions which do not relate to commercial or quasicommercial
undertakings of Government e.g., transactions of the Famine Relief
Fund. The form in which any pro forma accounts are prepared in
Accounts Offices will be determined by the Government concerned on
the advice of the Comptroller and Auditor General of India.
 Rule 19 Journal & Ledger
• The accounts of Government are based, in the main, on the single entry
system and the double entry system will be applied only in regard to the
maintenance of a set of technical accounts called the Journal, Ledger
and Trial Balance Sheet. The main purpose of the Journal and Ledger is
to bring out by a scientific method, the balances of accounts in regard to
which Government acts as a banker, or remitter or borrower or lender.
Though such balances are worked out in the regular Government
accounts, their accuracy can be guaranteed only by a periodical
verification with balances brought out in the double entry system
 In the case of the Central Government, the various Accounts
Officers shall prepare Ledger and summary of balances in
accordance with the procedure separately prescribed for the
purpose by the Controller General of Accounts. State
Accountants General will maintain separate Journal and
Ledger for all transactions of the State Government, from
which the annual summary of Balances or Trial Balance Sheet
is prepared by them.
 Rule 20 period of accounts
• Transaction in annual account should lies between 1st april to
31st march
 Rule 21 Cash Basis of accounts
• Account should represent actual cash receipt and
disbursement except certain adjustment or any special order
issued by central government on the advice of CAG
 Rule 22 Currency in which Government accounts to be
kept
• Indian currency Rupee
• For international transaction the currencies to be converted to
Indian Rupees before entering the accounts
 Rule 24 Sectors and subsectors of accounts
• General sector services
• Social services
• Economic services
• Divisions-Sectors/subsectors-major head of account( for
consolidated fund and public account)
• For contingency fund only 1 major head
Rule 25 Allotment of Code to each Major Head and range
of Code Numbers
• 4 digit code
• First digit 0 or 1-Revenue receipt
• First digit 2 or 3 -Revenue expenditure
• 4000-capital receipt
• First digit 4 or 5-Capital expenditure
• First digit 6 or 7 –loans and advances
• 8000-contingency fund
• First digit 8 or 9 –Deposit,suspense and remittance head/Public
account
• Example
• 0425- Revenue receipt of cooperation department
• 2425-Revenue Expenditure of cooperation department
• 4425-capital expenditure of cooperation department
• 6425-loans of cooperation department
• . Part I - Consolidated Fund Major Head Code Nos
• Section I Receipt Heads (Revenue Account) 0020-1999
• Expenditure Heads (Revenue Account) 2011-3999
• Section II - Receipt Head (Capital Account) 4000
• Expenditure Heads (Capital Account) 4046-5999
• Section III Public Debt, Loans & Advances 6001-7999
• Part II - Contingency Fund 8000
• Part III - Public Account 8001-8995
 Rule 26 Major head , Minor head , detailed head
• 5 tier classification
• Major head-Function of government
• Minor head- Programme
• Subhead- activities ,schemes
• Detailed head- itemwised control of expenditure
• Object head- primary unit
Rule 27 Classification of expenditure as charged or voted

• Charged expenditure does not require the vote of the

parliament
• Voted expenditure- require vote of the parliament
Rule 28 Classification of transaction in accounts
• Accounts of government shall be in such form as may be
prescribe by the president on advice of CAG
 Rule 29 Basis of classification
• it is based close reference to the function, programme,
activities, rather than the department
• Ex:
• 0049-interest receipt
• 2059- maintenance expenditure of non residential building
under administrative control of PWD
Rule 30 Criteria for determining whether expenditure should be classified
under heads of Capital Section or Revenue Section of the Consolidated Fund

• Expenditure of capital nature is an expenditure

incurred with the object of either increasing
concrete assets of a material and permanent
nature
• Expenditure of temporary asset or expenditure on
grant in aid of local bodies or institutions can not
be ordinary classified as a capital asset unless
authorized by the president on advice of CAG
• Expenditure of capital nature shall be distinguished from
revenue expenditure both in the budget and annual account.
• No capital nature expenditure should be classified as capital
expenditure unless the classification is expressly authorized by
guard or special orders of the Government
 Rule 31. Allocation between capital and revenue
expenditure on a capital scheme
• Such allocation where separate accounts of revenue and
capital are kept shall be determined as prescribed by the
president on the advice of CAG in accordance with such
general or special orders.
• Main principle
• Capital expenditure shall bear all charges for the first
construction and equipment of the project as well as charges
for intermediate work before the project is opened for service.
• Capital expenditure also bears all further
additions/improvements as may be sanctioned by
competent authority.
• Revenue expenditure shall bear all subsequent
charges for maintenance of working expenditure
for upkeep of the project and also such
replacement/additionsimprovement as prescribed
by the government.
• For work of renewal and replacement which partake
both capital and revenue nature the expenditure
should be regulated as the various principle laid down
• Expenditure on reparation or damaged caused by extra
ordinary calamities should be charged to revenue or
capital or divided between both in the way as
government may determine.
• Capital receipt in so far as they relate to capital
expenditure accruing during the consideration of
 Rule 32 Net gain /losses by exchange of government
transaction in foreign currencies
Net gain or loss by exchange in respect of
Government transactions in foreign currencies shall
be uniformly adjusted under the head "0075/2075
—Miscellaneous General Services— Gain/Loss by
Exchange
Rule 33 classification /accounting where transaction pertain
to more than one major head of account
• Receipt on charges pertaining to more than one
head of account at the first instance to be booked
under one head of account then transferred or
debited to the concerned head of account before
close of the financial year.
Rule 34. Classification and accounting of transactions relating to Scheduled Areas

Receipts and expenditure pertaining to Scheduled Areas

in a State vide clause I of Article 244 of the Constitution
shall be accounted for under the same major and minor
heads under which corresponding receipts and
expenditure pertaining to other areas of the State are
accounted for, but the receipts and expenditure of the
former kind may be shown in the accounts separately
from the later if Government so desires.
 Rule 35. Classification and accounting of recoveries of overpayments

• Recoveries of overpayments whether made in

cash or by deduction from payment vouchers shall
always be taken as reduction of expenditure under
the appropriate expenditure head concerned
irrespective of the year to which such recoveries
relate
 Rule 36 classification/ accounting of recoveries of
overpayments
It has to be taken as reduction of expenditure under
the appropriate expenditure head irrespective of
the year to which the recovery relates.
 Rule 38 Criteria for written off of balances from Debt. Deposit, Suspense
and Remittances Heads closed to balance and classification thereof in accounts

• A) all government dues which are found irrecoverable

shall be written off from the debt head of account to
the expenditure head as loss to government.
• B) any balances due by government remaining
unclaimed for such times as may be prescribed shall be
credited as revenue of the government by debiting the
debt/deposit head concerned.
• C) amount outstanding due to book keeping errors
under the heads loss to balance shall be written off.
• 8680-misc government account
 Rule 40. Adjustment between Governments
In the case of transactions between two
Governments, adjustment shall always be made if
required by or under the provisions of the
Constitution; and otherwise, in such manner and to
such extent as may be mutually agreed upon by the
Governments concerned
Rule 41. Adjustments with Foreign Governments, outside
bodies, etc

Unless exempted by Government by general or

special orders, services shall not be rendered
without being paid for to any foreign Government
or non-government body or institution or to a
separate fund constituted as such. Any relief in
respect of payment for services rendered or
supplies made to any outside body or fund should
 Rule 42. Inter-departmental adjustments
For purposes of inter-departmental payments, the departments of a Government shall
be divided into service departments and commercial departments according to the
following principles.
A. Service Departments: These are constituted for the discharge of those functions
which either (a) are inseparable from, and form part of the idea of Govt. or (b) are
necessary to, and form part of the general conduct of the business of Government.
Examples of category (a) are: the departments of Administration of Justice, Defence,
Jails, Medical, Police, Public Health, Education, Forest. Examples of category (b) are:
the departments of Survey of India, Printing and Stationery, Public Works (Building and
Roads Branch), Central Purchase Organisation under Director General of Supplies and
Disposal, New Delhi.
B. Commerical Departments or Undertakings: These are
constituted mainly for purposes of rendering services or
providing supplies, of certain special kinds, on payment for
the services rendered or for the articles supplied. They
perform functions which are not necessarily Government
functions. They are required to work to a financial result
determined through account maintained on commercial
principles.
Save as expressly provided by any general or special orders, a
service department shall not make charges against another
department for services or supplies which fall within the class
of duties for which the former Departments is constituted.
The following exceptions to this rule have been authorised:
(a) The Forest Department shall charge any other department
for vegetable, animal or mineral products extracted from a
forest area.
(b) Payment must ordinarily be made for convict labour as in the case of that
supplied to the Public Works and other departments of Government but no
charge shall be made for convict labour in the case of works undertaken by
the Public Works Department which are treated as Jail Works.
(c) The cost of additional Police Guards supplied to an Irrigation or other
project while under construction shall be debited to the project concerned.
(d) The Film Division of the Government of India shall charge any other
department for the cost of production of films and other services on such
terms as may be settled in each case
(e) The Central Industrial Security Force functioning under the
Ministry of Home Affairs shall charge any other department for the
cost of force provided, on such terms as may be settled in each case.
(f) When the Central Public Works Department executes works on
behalf of other departments of the Government of India, the cost of
which is debitable to the grant (Capital Portion) of those
departments, it shall recover the establishment and tools and plant
charges leviable on such works on a percentage basis, unless there
are special orders of the Government to the contrary
• (g) When the Central Electricity Authority or the Central
Water Commission including any office or division under
its control executes works on behalf of other
departments of the Government of India as an
occasional arrangement, the cost of which is met from
sources other than the expenditure heads (Revenue
Account) of those departments it shall recover the
establishment and tools and plant charges leviable on
such works on percentage basis, unless there are special
 Rule 45
• . Where one department makes payment or
renders service as an agent of another
department of the same Government the principal
department shall, subject to such monetary limit
as may be fixed by Government in this behalf, be
debited with the expenditure incurred on its
behalf by the agent department
 Rule 47.
A branch of a service department performing duties
supplementary to the main function of the department
and intended to render particular services on payment
shall levy charges in respect of the work for which it has
been constituted. Examples: Jail Manufacture, Printing,
Publishing Department, Mint
 Rule 53 Classification of Recoveries made from non-Government
parties and other Governments including Government outside India

• Recoveries of expenditure for services/supplies

made to non government parties to be classified
as receipt of the government rendering such
services/supplies.
Rule 54 Classification of recoveries made by one department
from another department of the same Government.
It is to be classified as deduction from gross expenditure except
when such services are made by commercial departments eg
railway, Department of Posts and Department of
Telecommunications or a departmental commercial undertaking
(e.g. A.I.R.) is treated as receipts of that department.
Exception:—Recoveries of fees for purchase, Inspection etc.,
effected by the Central Purchase Organisations of Government of
India (e.g. DGS&D Army Purchase Organisations of the Ministry
of Defence) are treated as receipts of the Department concerned
Rule 55 Classification of recoveries of expenditure on works in
progress and transactions of stock and other suspense account
• Recoveries of expenditure on works in
progress and transactions of stock and other
suspense account should be treated as
reduction of gross expenditure.
 Rule 56 Classification of receipts and recoveries on Capital
Accounts

• It is treated as reduction in capital

expenditure where the expenditure
previously debited to capital major head.
 Rule 58 Classification of loss etc. of receipts
• It is a claim to be relinquished and shall not be shown as
loss. if money t due to Government has actually
reached to a government servant and then embezzled ,
stolen,lost and even though it may not have reached to
treasury /bank it should be treated as receipt in
consolidated fund.
 Rule 59 Buildings, lands, stores and
equipment
• It should be written off from the value/commercial
accounts that may be maintained. If any transactions
under these categories are recorded under a Suspense
head in the Government accounts, losses or deficiencies
relating thereto shall be written off the Suspense heads
also.
 Rule 60 Classification of losses or deficiencies of cash in hand,
whether in treasury or in departmental charge:

• It is to be recorded under relevant separate head

of account.
Acceptance of counterfeit note, coins to be treated
as loss of cash
Rule 61 Classification of Irregular or unusual payments

• It shall be recorded in the accounts with respect to the

general or ordinary rules for classification for example
overpayment of salary to be shown/debited against the
salary head
 Rule 62 Classification of Inevitable Losses
• It is to be classified under the major head of account
under which the expenditure of that department is
classified which contain separate descriptive heads
under which the losses shall be recorded.
 Rule 66 Pay & Allowances (Other than Travelling
Allowances) of Government Servants
• It is treated as the part of the scheme, activity of
organization (subhead)under a programme (minor
head) below the function(major head)
• If such classification is not possible then it is classified
under the major work of the government.
• The transit pay and allowances of a Government servant
proceeding to join an office whether on first appointment, or
on transfer from one department to another either
permanently or as a temporary measure, or proceeding on
deputation to another Deptt. /Govt. or reverting therefrom
should in absence of special orders to the contrary, be borne
by the Deptt./Govt. to which the Govt. Servant is proceeding.
 67 Travelling Expenses

. The travelling expenses of a Government servant should on whatever duty he

may be employed be debited under the same major/minor/subhead as his pay.
However, in the following cases the travelling expenses of a Government servant
may be debited to a major/minor etc. head different from that to which his pay is
debited :
(i) in cases where a Government servant is required to travel on duty connected
with an outside body or fund;
(ii) When Government considers it necessary to show separately the cost of a
special service in connection with which the tour is undertaken, and
(iii) in cases covered by general or special orders of the Government authorising
a deviation from the general rule.
 74. Interpretation

• Where any doubt arises as to the interpretation of

any of these rules, the matter shall be referred to
Ministry of Finance, Department of Expenditure,
Controller General of Accounts for its decision, on
the advice of the Comptroller and Auditor
General.
 75. Repeal

With the issue of these rules, the provisions of

Accounts Code Vol. I & Form of Accounts of the
Union and States (Basic) Rules are hereby repealed