organisation and functions of the raksha mantralaya ...pcafys.nic.in/files/orientation...

ORIENTATION COURSE FOR AAO/SO (A) _______________________________________________________________________________________________________________

RTC-KOLKATA 83.01 1

ORGANISATION AND FUNCTIONS OF THE RAKSHA

MANTRALAYA (MINISTRY OF DEFENCE)

The Defence of India and every part thereof including preparation for

Defence and all such acts as may be conducive in times of war to its

prosecution and, after its termination, to effective demobilization, is the

responsibility of the Rakish Mandalay (Ministry of Defence). The

administration of the Armed Forces of the Union, namely, the Army, the Navy

and the Air Force is, therefore, the main function of the Ministry. Matters

relating to other organizations, like the Territorial Army, Coast Guard, the

Auxiliary Air Force and the National Cadet Corps are also looked after by the

Ministry.

Administration of matters relating to the Armed Forces includes

acquisition and management of land and property for Defence purposes and

works items relating to the various Services - the Army, the Navy and the Air

Force - are under the general control of the Ministry, they normally function

directly under their respective Chiefs of Staff who are assisted by their

Principal Staff Officers. It is, however, one of the important functions of the

Ministry to ensure that the development and activities of the three Services are

coordinated and adequate liaison with other Ministries is maintained. The

Ministry is responsible for obtaining policy decisions of Government and for

transmitting them to and progressing their implementation by the three

Services Headquarters and in particular, for obtaining the necessary finance for

Defence expenditure and for its allocation among the Planning Division in the

Ministry of Defence which processes the plans and programmes recommended

by the three Services and the Departments of Defence Production and Supplies

and Defence Research and Development. The Planning Division draws up

integrated Defence Plan and monitors its implementation in various ways after

getting it approved. Planning also helps in better and timely allocation of

priorities and funds on various schemes.

There are certain organizations, however, which are of an inter-Service

character whose administration is the direct responsibility of the Ministry. This

direct responsibility also extends to the Public Sector Undertakings, which are

under the administrative control of the Ministry.


RTC-KOLKATA 83.01 2

While much of the work is dealt within the normal way, as in other

Ministries, by notes and discussions, a network of committees has been

established at different levels, with a view to ensure expeditious and efficient

handling of work of great complexity and extending over many subjects. There

is a Defence Minister's Committee, which deals with, the more important of the

inter-services problems.

The Defence Minister's Committee has two Sub-Committees viz.

Principal Personnel Officers Committee and Principal Supply Officers

Committee with the Ministry of Defence, Ministry of Defence (Finance) and

Services Headquarters representation at a minimum Joint Secretary level.

These Sub-Committees are presided over by the senior most Services

representative on the Sub-Committee on rotational basis. These Sub-

Committees meet regularly at the direction of the Defence Minister's

Committee or at the request of any member of the Sub-Committee or to the

Government in that regard. The Chiefs of Staff Committee (referred to in Para

6) are afforded an opportunity to consider all the recommendations of these

Sub-Committees before these are submitted to the Defence Minister's

Committee.

Another Committee has known as the Defence Minister's (Production &

Supply) Committee deals with matters relating to indigenous production of

Defence Stores, equipment and import substitution in the field of Defence. It

also reviews from time to time the mobilization plans for Defence Production.

In addition to the above two Committees, there is a Defence Minister's

Appellate Committee on Pensions to consider appeals in respect of claims to

disability and family pensions of the personnel of: Armed Forces.

The Defence Research and Development Council is responsible for

coordinating and. indicating general direction of policy for scientific research

relating to Defence and the development of or improvement in material

required by the Armed Forces.

The 'Chief of Staff’ of each Service is in complete command of the

service under him subject to rules, regulations, procedures and orders issued by

Government. In the context of the modern concept of Defence and more

particularly with the rapid technological development, it is obvious that

Defence of the country involves a joint effort by all the three services. Hence a


RTC-KOLKATA 83.01 3

committee consisting of the three Chiefs of Staff is constituted, with the

member having been the longest in the committee as Chairman, to consider all

important Defence matters and more particularly those which concern more

than one Service. The Chiefs of Staff Committee thus advises the Government

on matters relating to general Defence strategy, Defence builds up and such

questions as are referred to it by the Government.

The Production Wing of the Department of Defence Production and

Supplies control the chain of Ordnance Factories in the country producing

arms, ammunition, fighting and transport vehicles, clothing items and general

stores etc. for the Armed Forces. The Ordnance Factory Board with a

Chairman and 7 members controls all the Ordnance Factories. The group of

Ordnance Equipment Factories is looked after by an Officer of the rank of

Additional DGOF and the Armored Vehicles Factories by another such officer

under the overall control of Ordnance Factory Board. This Board has the

overall responsibility of planning, policymaking, monitoring and

implementation of the production programmed. In addition, there are 8 Public

Sector undertakings, out of which 7 are in production and are engaged in the

manufacture and repair of aircraft, naval vessels and electronic and engineering

equipment. The 8th undertaking viz. Mishap Datum Enigma Limited (Super

alloys Project) has also gone into commercial production.

The Supplies Wing of the Department of Defence Production and

Supplies functions through a number of Technical Committees. The

Department is concerned with indigenous development and production of items

hitherto imported or being introduced into the services for the first time. It also

procures components and sub-assemblies to supplement the capacity of

Ordnance Factories. Production of such items is established in units in Private

as also in Public Sector Undertakings, outside the Defence fold.

The Directorate of Planning and coordination is entrusted with the task

of assisting in preparation and implementation of perspective planning of

defense Production for the three services. It is also to identify areas where

surplus capacity exists in order to utilize it for civil sector. In addition, it has to

assist in the setting up of ancillary estates in all Defence Factories where -less

sophisticated operations can be off-loaded to the private sector.


RTC-KOLKATA 83.01 4

The Defence Exhibition Organization under this Department deals with

matters relating to participation of Ministry of Exhibition and Trade Fairs in

India and abroad. A permanent Defence Exhibition has been set up at

Pragmatic Maiden, New Delhi since November, 1981. The Directorate of

Standardization under Department of Defence Production is responsible for

standardization of all Defence Equipment.

There is a quality assurance Organization responsible for the drawings

and specifications of all Defence stores and equipment, development of

indigenous sources in the civil trade and inspections of Stores relating to Army

and Navy (except Naval Armament) known as Directorate of Technical

Development and Production (Air) is responsible for inspection of the Defence

Air Crafts, accessories etc. and development and establishment of aeronautical

stores and ground support equipment of imported origin.

Rakish Anusandhan Tatha Vikas Vibhag (Department of Defence

Research and Development) renders advice to Rakish Mantri and to

Orgahisations in the Ministry of Defence on all Scientific and technological

aspects of Military operations, logistics, weapons systems and equipment. In

addition, the Department undertakes research, design and development of

weapons, weapons systems, equipment, materials and stores. The Department

is the nodal agency responsible for planning and management of all Defence

research and development progratames. This work is undertaking through a

national network of well established Defence laboratories specializing in a

wide variety of areas and discipline's in defense science and technology. This

includes work in the fields of armaments, explosives, electronics, guided

missiles, vehicles aeronautics structural engineering and naval weapon

systems, problems connected with food, clothing, medical physiological and

fire fighting for the Armed Forces is also dealt with. The Department also

sponsors defense research work in universities and higher technological

institutes in the country, and has its own training and educational institutions in

defense science and technology, and work study. While the majority of defense

research projects are inter-departmental, the Department is progressively

embarking on major, integrated programmes involving many large and small

industries in the public and private sectors. The work of defense laboratories is

administered by the DRDO Headquarters located in New Delhi, and the

programmes are, as whole, coordinated under the unified direction of the

Department of Defence Research and Development.


RTC-KOLKATA 83.01 5

ORGANISATION AND FUNCTIONS OF THE FINANCE DIVISION OF

MINISTRY OF DEFENCE

There is a separate Finance Division of the Rakish Mandalay (Ministry

of Defence) for dealing with all defense matters having a financial bearing. The

head of this Division is the Financial Adviser. In order to bring about the closer

association between the Administrative Ministries and their Financial Advisers,

and to enable the latter to play a more effective and constructive role,

Government had introduced in October 1975 the Scheme of Integrated

Financial Adviser under which the Financial Advisers become a part and parcel

of the Administrative Ministry concerned and are therefore, more closely

associated with formulation and implementation of proposals. In accordance

with that policy, the scheme of Integrated Financial Adviser was introduced in

the Department of Defence Supplies and Defence Production (including

Research and Development Organization and Director General of Quality

Assurance) in May 1976. The question of introducing the system in the

Department of Defence had been under consideration of the Government and it

was ultimately decided to introduce the -Integrated Financial Advice system in

the Department of Defence as well with effect from let. August 1983. Thus

there is now complete integration of the former Defence Division of the

Ministry of Finance with the Defence Ministry. The designation of the

Financial Adviser emphasizes the Advisory as distinct from the restrictive

function of treasury control and it is in the capacity that the Financial Adviser

(or his representative) is a member of the various Committees of the Rakish

Mandalay (Defence Ministry) and the Services Headquarters. The Financial

Adviser also normally attends meetings of high level committees dealing with

defense matters whenever proposals having a financial bearing are discussed.

With a view to ensuring greater efficiency in administration and quicker

disposal of the cases, Ministry of Defence has been delegated enhanced

financial powers in regard to expenditure met from the Defence Service

Estimates. In matters within the delegated powers of the Ministry of Defence,

Financial Adviser (Defence Services) or his officers are to be consulted before

exercise of financial powers. In such cases, it is open to the Defence Secretary

to over-rule the advice of the Financial Adviser (Defence Services) by an order

in writing, but it will also be open for the Financial Adviser (Defence Services)

to request that the matter be placed before the Raksha Mantri.


RTC-KOLKATA 83.01 6

In all matters beyond the powers delegated to the Ministry, Financial Adviser

(Defence Services) and his officers function as Associate Finance and are

responsible to have the right of access to the Ministry of Finance and the

Finance Minister through Secretary (Expenditure). If any important change in

the duties and functions of the Financial Adviser (Defence Services) or the

Defence Accounts Department is contemplated, approval of the Finance

Ministry is necessary.

The financial control exercised by the Financial Adviser and his officers

is really a careful and intelligent scrutiny of all proposals involving expenditure

from the public funds, the objective being the safeguarding of economy,

efficiency and property in public finance. Before according financial

concurrence to any proposal involving fresh expenditure, it is the duty of the

Finance Officer to seek justification for the proposal. - He may even challenge

the necessity for spending so much money or on such a scale to secure a given

object. He asks whether the proposal is really scale to secure a given object. He

asks whether the proposal is really necessary, whether the same results could

not be obtained otherwise with greater economy, whether the expenditure

involved is justified in the circumstances, whether individual items are in

furtherance of the general Government policy, whether the canons, of financial

propriety have been observed. These Canons are:

(i) Every Public officer should exercise the same vigilance in respect

of expenditure incurred from Government Revenues as a person of

ordinary' prudence would exercise in respect of the expenditure of

his own money.

(ii) No authority should exercise its power of sanctioning expenditure

to pass an order, which will be indirectly or directly to its own

advantage.

(iii) The amount of allowances such as traveling allowances, granted

to meet expenditure of a particular type, should be so regulated

that an allowance is not on the whole a source of profit to the

recipient.

(iv) Government Revenues should not be utilized for benefit of a

particular person or section of the community unless-


RTC-KOLKATA 83.01 7

(a) the amount of expenditure involved is insignificant or

(b) a claim for the amount could be enforced in a court of law

or

(c) the expenditure is in pursuance of a recognised policy

or custom.

In fact he asks every question that might be expected from an intelligent

taxpayer bent on getting the best value for his money.

The rules provide that no expenditure which has not been provided for in

the Budget or which having been provided, has not been sanctioned shall be

authorised without the concurrence of the Financial Adviser or representative.

The strict observance of this rule is automatically ensured as the Controllers of

Defence Accounts will not make any disbursement in respect of charges not

covered by regulations or Government orders.

The according of financial concurrence by the Finance Division of the

Ministry of Defence falls generally in three more or less well defined. Stages:

(i) the examination of the proposal on its merits.

(ii) the assessment of the financial effect.

(iii) If the proposal is accepted, the careful examination and vetting of

the final orders before issue.

Sometimes two or more of these stages are combined, but all proposals

having a financial bearing inevitable follow through this process. This

procedure ensures not_ only close and adequate control by Finance, but also

enables them to give constructive suggestions and advice from the financial

point of view at a fairly early stage of the consideration of a proposal.

. The Financial Adviser prepares the budget and other estimates for

the Defence Services and also furnishes the Heads of the Branches of the

Armed Forces Headquarters with all information at his disposal to enable them

to discharge their financial responsibilities in respect of the grants allotted to

them and advises them in regard to the preparation of proposals and the


RTC-KOLKATA 83.01 8

disposal of financial business generally. He is also fully associated with

formation and implementation of Defence Plans.

In addition to these functions, the Financial Adviser is also the Chief

Accounting Officer for Defence Services. It is in this capacity that he prepares

the Appropriation Accounts for the Defence Services. The Financial Adviser is

also ultimately responsible for the internal audit and accounting of Defence

Expenditure, but this responsibility is discharged through the Controller

General of Defence Accounts.

Defence Accounts Department, with the Controller General of Defence

Accounts as its head, functions under the administrative Control of Financial

Adviser (Defence Services). The duties of Defence Accounts Department are

broadly audit, payment and accounting of all charges pertaining to the Armed

Forces, including bills for supplies and services rendered and for

constructions/repair works, pay and allowances, miscellaneous charges,

provision etc. The Department is also responsible for the audit of cash and

stores account kept by the various units and formations (including arsenals,

workshops and storage depots) in the three services and maintenance of pay

accounts of Army, Officers and combatants, of the Army. The manufacturing

Accounts of Ordnance Factories and the Naval Dockyard and the store

accounts of the Ordnance factories are also kept by the Defence Accounts

Department. They also maintain Accounts relating to works services and audit

the construction and other accounts relating to works project maintained by

Military Engineer Services.

In addition-to the duties mentioned above, the Controllers of Defence

Accounts function as Local Financial Advisers to the General Officers

Commanding-in-Chief of Commands, Area Commanders and various other

establishments. The Defence Accounts Department has also positioned Internal

Financial Advisors at Service HQrs to render financial advice on powers

delegated to them.

The Defence Accounts Department comes under the Ministry of Defence

with the Controller General of Defence Accounts as the Head of the

Department. The organization of the Defence Accounts Department

corresponds broadly to the organisation of the three services. In addition, it also

caters for the Ordnance Factories, Defence Research & Development


RTC-KOLKATA 83.01 9

Organization, the Canteen Stores Department, the Coast Guard, the Border

Roads Organization and Inter-services Organization under the Ministry of

Defence.

The field organisation of the department dealing with the Army has been

structured by and large on the pattern of Army Commands/Areas. The location

of these Controllers Offices is in close proximity to the Command

Headquarters/Area Headquarters, in order to enable them to render prompt

services to the units/formations located in these areas. Under some of the

Controller's offices, there are also Area Accounts Offices to render prompt

services to the Sub-Areas. In addition, there are Local Audit Offices to audit

the accounts of the units and formations and the Unit Accountants are attached

to each Garrison Engineer. The Pay Accounts Offices (JCO / ORs) are also

under the jurisdiction of the nearest Regional Controller. In all there are 12

Regional Controllers. In addition, one Controller of Defence Accounts at Pune

specifically deals with the pay and allowances of the Commissioned Officers.

The remaining Controllers' Offices are patterned to service a particular

Service or function except for CDA (Headquarters) at Delhi which covers all

the services, Inter-Services Organisations and the Ministry of Defence. The

Controller of Defence Accounts covering the Navy is located at Bombay. In

the case of the Air Force, there are two Controllers of Defence Accounts, one

at Dehradun covering all the Commands and field areas and one at New Delhi

covering the units located in Delhi including Air Headquarters. The Defence

Research & Development Organization has expanded considerably and there

are a number of projects being handled by the Defence Laboratories.

Accordingly, there are Controller for R&D at New Delhi & Hyderabad to deal

with all matters connected with R&D Organisations with regional Joint

Controllers of Defence Accounts at Pune, Delhi and Dehradun. Another

Controller for R&D functioning at Bangalore provides service to Laboratories/

Establishments located in Tamil Nadu, Karnataka and Kerala States. There is a

Controller, for dealing with the Border Roads Organization at New Delhi

assisted by the regional Joint Controllers of Defence Accounts at Chandigarh,

Jammu, Guwahati, Pune and Patna. For the Canteen Stores Department, the

Controller is located at Bombay.

The organisation of the Ordnance Factories has 39 Factories. This is

managed by the Ordnance Factories Board but the entire account, Internal


RTC-KOLKATA 83.01 10

Audit and financial advice functions for these factories is looked after by the

Chief Controller of Accounts (Factories) at Calcutta. He is assisted by a

Controller of Accounts in the headquarters and ten Controllers located

alongside major “Ordnance and Clothing Factories. This complex accounts set

up is a highly specialised segment of the department, dealing with the, cost

accounts of the Ordnance and Clothing Factories.

The pension; establishment of Defence has been growing substantially.

Consequently, the responsibility of the department to determine the entitlement

and make prompt payments of pensions has increased. In order to handle this

complex task, there is a Chief Controller of Defence Accounts located at

Allahabad to deal With the sanction of pensions in respect of the Service

personnel (excluding Air Force and Navy personnel which are sanctioned by

CDA (Air: Force) and CDA (Navy) respectively defense civilians and the staff

of the Defence Accounts Department. He ' is assisted by' a Controller of

Defence Accounts in the Main Office. In addition, there is a Controller at

Meerut dealing' with disbursement of pensions through 49 Defence Pension

Disbursing Officers (DPDOs) located in various States. 11 (Eleven) DPDOs

also function under CDA (Madras), who is responsible-for disbursement of

pension in four Southern States.

The General Provident Fund Accounts of the civilian personnel of the

Army as well as the staff of the Defence Accounts Department are maintained

by the Joint Controller of Defence Accounts (Funds) who functions under the

administrative control of CDA (Army) Meerut. The GPF Accounts of other

defense civilians are maintained by the concerned functional Controllers such

as Controllers of Finance & Accounts (Fys), Controller of Defence Accounts

(R&D), CDA (Navy) and CDA (Border Roads). In addition there is a

Controller of Defence Accounts (Training) at Meerut to take care of the

training requirement of the personnel of the department.

The Controller of Defence Accounts (Headquarters) New Delhi deals

with the pay and allowances, traveling allowances claims and fund account

of civilian staff of Ministry of Defence, the Army and Navy Headquarters

and the Inter-services Organization located at Delhi. Claims pertaining to

contingency and miscellaneous charges of the above said organizations are

also dealt with by this Controller. In addition, this Controller also handles

all work relating to payments of foreign contracts including contracts



entered into by the Department of Defence Supply, payments for purchases

made by Army Purchase Organization and the work relating to London

Account Current.



Role and Function of the CGDA

The Defence Accounts Department (DAD) which is headed by

Controller General of Defence Accounts is at present responsible for the

Payments, Accounting and Internal Audit of the Expenditure and Receipts of

the Defence Services and other Defence-related Organizations such as the

Border Roads, the Coast Guard and the Canteen Stores Department.

The CGDA helms the Department with the assistance of 2 Addl.

CsGDA, 12 Principal Controllers, one Principal IFA and 58 CDA-level officers

looking after Regional Controllers (Army)/Integrated Financial Advisors,

Functional Controllers/Integrated Financial Advisors catering to Navy, Air

Force, Ordnance Factories, DRDO, etc.



As on 27.04.2007



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IFA SYSTEM

ORGANISATION, STRUCTURE & ROLE

-An Overview

What is an IFA System?

Some Constitutional Facts

- Executive Powers of Union vested in the President of India.

- These Powers are exercised through Ministries/Departments.

- The work distribution of a Ministry/Deptt. are governed by

Allocation of Business Rules.

- All financial powers of the Union are vested in Ministry of

Finance, Govt. of India.

Delegation of Powers & IFA System

Delegation of Powers necessary for Administrative Efficiency and faster

Decision Making.

Finance Ministry has delegated financial powers to other Administrative

Ministries/Departments from time to time.

A large scale delegation took place in 1975/76 consequent to Committee

set for Departmentalization of Accounts.

Along with the delegation, a scheme of Integrated Financial Advice was

also introduced in Ministries/Departments of Govt. of India.

The basic objective of the scheme was to make financial advice/inputs

available to the executive authority in-house for better decision making

with a view to economy, efficiency and effectiveness.

As per the scheme, an Integrated Financial Advisor was attached with

each Ministry/Department of GOI.

Financial Advisor so appointed was made part and parcel of the Ministry

who was mandated to help the Secretary/Minister of the Department in

all financial, budget, accounting and audit related matters.

Financial Advisor was placed under the administrative control of the

respective ministry/department.

For the exercise of delegated financial powers, FA acts as Internal

Financial Advisor and concurs of all such proposals/ cases.



For cases beyond delegated powers, he provides inputs to Finance

Ministry and thus acts as a representative of Finance Ministry.

Because of the above features, the scheme has been called Integrated

Financial Advice (IFA) System.

IFA Scheme in Defence

IFA Scheme in Ministry of Defence was first launched in 1976 when

Department of Defence Production & Supplies and Defence Research &

Development were brought under the scheme.

IFA system in the main ministry i.e. Department of Defence was I

introduced in 1983.

With this Ministry of Finance (Defence) became Ministry of Defence

(Finance).

Secretary (Defence Finance) or Financial Advisor (Defence Services) as

the head of Ministry of Defence (Fin) is the Integrated Financial Advisor

of Ministry of Defence

IFA System in Services

Arun Singh Committee on Defence Expenditure recommended

- wide scale delegation of financial powers to Services and

- Introduction of IFA System in Services

This was also the time when changes were introduced in the various

Govt. Deptts. Navy also took a cue from this and brought about a

momentous change in the area of its resource management called NMS

in 1994. Basic features of NMS

It provides for greater de-centralisation of responsibilities for target

setting, planning budget formulation and financial control by involving

lower level functionaries with Accountability at every level.

Creation of Authority-cum-Responsibility and Budget centers under

various PSOs in the NHQ

Establishing clear relationship between financial inputs and outputs or

physical targets.

Better value for money in all exp. Programmes.

NMS also envisaged introduction of the system of IFA both in the NHQ

as also in some selected formations to advise them on various financial



matters including the exercise of their enhanced delegated financial

powers.

IFA System was also established in Air HQ in 1994 under which an

Integrated Financial Advisor with a Deputy IF A was placed in Air HQ.

IFA (Army) and a Deputy IFA was also placed in Army HQ in 1994.

New Management Strategy for Ordnance and EME was implemented in

1997.

Role of IFA

To concur all proposals falling under the delegated powers at the

necessity as well as expenditure sanction stage.

To advise in the matters falling under the powers of MOD.

To participate in TPC/PNCs held by the various authorities in Service

HQ. To assist in budgetary matters including preparation of Committed

Liability Data base.

To aid and assist in preparation of replies as regards to audit Para, draft

Paras etc.

Any other duties given by FA (DS).

Further Developments

The next major push towards IFA system took place after Kargil war on

the GOM (Group of Ministers) recommendations in 2002.

With this IFA system has been implemented at Command Level and

each command HQ has been provided with a dedicated IFA and Deputy

IFAs.

A large-scale delegation of powers to executives at all levels under

MOD letter dated 22 April, 2002.

In future, dedicated IFAs to be provided at Corps and Div levels and also

at CODs.

Organization Structure of IFA system in Army

Principle IFA in Delhi to coordinate and handle all IFA related issues.

IFA (Army/Ord), IFA (Army/Q and IFA (Army/Misc.) in the Army

HQs.

IFA at each of six commands.



IFAs are Joint Secretary Level officers.

IFAs are provided with the assistance of one Joint IFAs and two Deputy

IFAs.

Under the concept of decentralised powers IFA forms part of the

management in the decision making process.

Therefore, IFA should not be considered as a person to create

impediments or outsider.

The IFA scheme is an aid to the management and is intended for their

benefit and achieves the common objective.

1. INTEGRATED FINANCIAL ADVICE (IFA) SYSTEM

The concept of IFA was introduced in the Ministries of Government of India in

the wake of the decision on departmentalization of accounts in 1976.

2. AIM:

To expedite decision-making and to ensure that all expenditure proposals are

subjected to due financial scrutiny before the expenditure is sanctioned or

committed.

3. Why is an Integrated Financial Adviser necessary in Armor

Headquarters?

(i) Over view of all expenditure proposals which ensures optimum

utilization of funds.

(ii) Ability to take independent view unaffected by hierarchy of Service HQ

- Functional Accountability to Secretary Defence (Finance)

- Administrative Control of DCOAS (P&S)

- AC written by DCOAS

- Review by Secretary Defence (Finance)

(iii) Years of experience in all aspects of Financial Management

- Accounting, Audit, Budgeting and Financial Advice

4. 1FA System in Service HQrs

Based on the recommendation of a Sub Committee on Defence Expenditure,

Ministry of Defence decided in November, 1991, that exercise of delegated



financial powers should be with the advice of IFAs. Accordingly, IFAs have

been positioned in Service Headquarters and Headquarters DGBR vide the

following Government Orders:

(a) MOD F No. 665/ADDL FA (C) Dated 22.3.94 - IFA NAVAL HQ

(b) MOD F No, 840/ADDL FA (C) Dated 4.4.94 - IFA AIR HQ

(c) MOD, F No. AN-1 /11791 /1 N1 (PC-/XXV) - IFA ARMY HQ

Dated 17.8.94

(d) BRDB No. F 731/ (18) BRDB/BWA/ - IFA DGBR

94-Delegation Dated 23.3.95

(e) MOD No. Air HQ/61279/35/4/L1215/ - IFA HQ

DO-II/D (AIR-1) Dated 26.9.95 Maintenance

Command, IAF

5. Role and Functions of IFA in Army HQrs

The duties of IFA as stipulated in the Ministry of Defence (Finance) letter No.

AN/1/1 1791/l/Vl (PC-XXV) dated 17.8.94 is as under:

(i) He/She shall be the Integrated Financial Adviser at Army Headquarters.

(ii) He/She shall render advice on financial matters, which fall within the

competence of various authorities at Army Headquarters within the

delegated financial powers as and when sought for. Such authorities will,

however, continue to exercise these powers independently as hitherto

fore.

(iii) He/She will vet proposals falling within the enhanced financial powers

as and when sanctioned.

(iv) He/She may render advice and assist in cases of all proposals/ cases

requiring government sanction if called upon.

(v) He/She or his/her representative will participate in various TPCs/PNCs

at Army Headquarters.

(vi) He/She will monitor the processing of draft Audit Paras, internal Audit

objections etc. concerning the Army to ensure adequate attention and

speedy remedial measures. For this purpose, he/she will maintain close

liaison with Regional Controllers of Defence Accounts, CGDA, DGADS

and Ministry of Defence.

(vii) He/She will assist in preparing and monitoring a data base on committed

liabilities.

(viii) Any other duties relating to Finance/Accounts as assigned to him/her by

the DCOAS (P&S) and Secretary Defence (Finance).



(ix) In case of difference of opinion between IFA and PSOs and DCOAS

(P&S), the matter may be referred to Secretary Defence (Finance).

6. The following items of work were specifically mentioned in a

subsequent note of Ministry of Defence (Finance) bearing ID No. 2780/Addl.

FA (J)/QB/94 dated 7.14.94:

(i) Participate in TPCs/PNCs held at Army Headquarters (ST Branch) for

finalization of procurement of tubes and greases, hygiene chemicals etc.

(ii) Conclusion of STAs for procurement of fodder by DDGMF.

(iii) Conclusion of Meat Group contracts falling within delegated powers of

QMG.

(iv) Regularization of losses under the delegated powers of various

authorities in QMG Branch/ Army Headquarters.

7. In the Financial Management Strategy for MGO's Branch, the role of

IFA has been defined asunder:

(i) The IFA (Army HQ), set up vide MOD (Fin) letter dated 17.8.94, will

also function as IFA for MGO Branch including DGOS and DGEME.

(ii) He/She- shall render advice on all financial matters pertaining to these

functionaries.

(iii) In all matters %within delegated powers of MGO, DGOS, DGEME, the

IFA is to be consulted in respect of all cases of specific expenditure

proposals and these powers will be exercised with his/her consultation.

(iv) To enable the IFA to discharge his/her role of rendering financial advice

effectively within the delegated financial powers, all the concerned

papers/case files relevant to the case as also the relevant papers in regard

to tenders; original quotations, comparative statements of tenders etc.

will be made available to the IFA or his/her representative as and when

required for rendering such financial advice through TPCs or otherwise.

(v) IFA will also be fully associated with the post-contract stage

developments such as granting of extension of time, levy,

recovery/waiver of liquidated damages and risk purchase etc.

8. Organization of IFA

The IFA Cell was originally sanctioned vide MOD (Fin) letter No.

AN/1/1179/VI (PC- XXV) dated 17.8.94 with the following complement:



(i) One IFA - To be manned by an officer of -

Senior Administrative Grade of the

IDAS

(ii) One Deputy I FA - To be manned by a Time Scale

Officer of the IDAS

(iii) Two Junior Officers - To be manned by Assistant Accounts

Officers of the Defence Accounts

Department

With the increase in workload, a second IFA was positioned in Army

Headquarters in April'99. The number of Dy. IFAs has been increased to three

and Junior Officers to four. Two Senior Accounts Officers of the Defence:

Accounts Department has also been posted in addition to the above.

9. The distribution of work between the two IFAs is as follows:

I. IFA (Army-O)

All matters pertaining to Ordnance and EME Stores

II. IFA (Army-Q/Misc.)

(a) QMG Branch and other Directorates under it, including Works and ASC,

Military Farms

(b) VCOAS relating to M1/S1

(c) DCOAS (T&C) and Directorates under him including MT

(d) Signals Directorate

(e) AG's Branch relating to time barred cases and regularization of losses '

(f) DGAFMS

(g) DCOAS (P&S) and ADG (Systems) relating to IT funds.



DRAFTING OF COMMUNICATIONS

Procedure for drafting.--(1) No draft will normally be prepared in simple

and straightforward cases or those of a repetitive nature for which standard

forms of communication exist. Such cases may be submitted to the appropriate

officer with fair copies of the communication for signature.

(2) The initiating level officer will put up a draft, wherever

considered necessary by him after examination of the matter, for approval by

the appropriate officer. It is not always necessary to await the approval of the

proposed line of action and/or what the contents of the communication should

be before putting up the draft. The higher officer may revise the draft if it does

not meet with his approval.

(3) Once he has formulated his views on a case, an officer who is

authorised to take a decision thereon, may have the fair communication made

for his signature and authorise its issue; otherwise, he will prepare a draft and

submit it to the appropriate higher officer for approval.

(4) The officer approving the issue of a draft will append his initials

thereto with the date in the margin of each page of the draft. It is also expected

of him that he passes orders on the file simultaneously whether the draft so

approved should be kept on the file (along with the office copy of the

communication issued in fair) or not.

General instructions for drafting.- (1) a draft should carry the message

sought to be conveyed in a language that is clear, concise and incapable of

misconstruction.

(2) Lengthy sentences, abruptness, redundancy, circumlocution,

superlatives and repetition, whether of words, observations or ideas, should be

avoided.

(3) Official communications emanating from a department and pur-

porting to convey the views or orders of the Government of India must

specifically be expressed to have been written under the directions of

Government. This requirement does not, however, imply that each com-

munication should start with the phrase `I am directed to say' or `The

undersigned is directed to convey', which has the effect of distancing the



communicator from the reader at the very outset. A more direct and to-the-

point format is to be preferred if some degree of rapport is to be established

with the receiver of the communication. The obligatory requirement can be met

in a variety of imaginative ways. For instance, variations of the phrase can be

added to the operative part of the letter towards the end as under -

...............I have the pleasure to inform you that the Government, on

reconsideration of the matter, has decided to sanction an additional grant

of...............

Or

...............In the light of the above developments, Government conveys its

inability to accede to...............

(4) Communications of some length or complexity should generally

conclude with a summary.

(5) Where appropriate, the subject should be mentioned in communications

(including reminders).

(6) The number and date of the last communication in the series, and if this

is not from the addressee, his last communication on the subject, should always

be referred to. Where it is necessary to refer to more than one communication

or a series of communications, this should be done in the margin of the draft.

(7) All drafts put up on a file should bear the file number. When two or

more communications are to issue from the same file to the same addressee on

the same date, a separate serial number may be inserted before the numeral

identifying the year to avoid confusion in reference, e.g., 8/5 (I)/87-Est., 8/5

(11)/87-Est.

(8) A draft should clearly specify the enclosures which are to accompany

the fair copy. In addition, short oblique lines should be drawn at appropriate

places in the margin for ready reference by the typist, the comparers and the

despatcher. The number of enclosures should also be indicated at the end of the

draft on the bottom left of the page.



(9) If copies of an enclosure referred to in the draft are available and are,

therefore, not to be typed, an indication to that effect will be given in the

margin of the draft below the relevant oblique line.

(10) If the communication to be despatched by post is important (e.g., a

notice cancelling a licence or withdrawing an existing facility) or encloses a

valuable document (such as an agreement, service book or a cheque)

instrucitons as to whether it should be sent through registered post or in an

insured cover, or under a certificate of posting, will be given on the draft by the

Section Officer concerned with its issue.

(11) Urgent communications with bulky enclosures to far-flung areas like

Andaman and Nicobar Islands will be arranged to be despatched by Air Parcel

through Indian Airlines. The addressee will also be advised through wireless to

take delivery of the consignment. Instructions to this effect will be given by the

Divisional Head/Branch Officer/Section Officer at the time of approval of

draft.

(12) The name, designation and telephone number of the officer, over whose

signature the communication is to issue, should invariably be indicated on the

draft.

(13) In writing or typing a draft, sufficient space should be left for the

margin and between successive lines to admit of additions or interpolation of

words, if necessary.

(14) A slip bearing the words `Draft for approval' should be attached to the

draft. If two or more drafts are put up on a file, the drafts as well as the slips

attached thereto will be marked `D.F.A. I', 'D.F.A.II', `D.F.A. III' and so on.

(15) Drafts which are to issue as `Immediate' or `Priority' will be so marked

under the orders of an officer not lower in rank than a Section Officer.

(16) The officer concerned will initial on the draft in token of his approval.

(17) Instructions contained in Para. 27 (12) will be observed while drafting.

Authentication of Government orders.-(1) All orders and other

instruments made and executed in the name of the President should be



expressed to be made in his name and signed by an officer having regular or ex

officio secretariat status of and above the rank of Under Secretary, or others

specifically authorised to authenticate such orders under the Authentication

(Orders and Other Instruments) Rules, 1958.

(2) Where the power to make orders, notifications, etc., is conferred by a

statute of the Central Government, such orders and notifications will be

expressed to be made in the name of the Central Government.

Addressing communications to officers by name.-Normally no

communication, other than that of a classified nature or a demi-official letter,

should be addressed or marked to an officer by name, unless it is intended that

the matter raised therein should receive his personal attention either because of

its special nature, urgency or importance, or because some ground has already

been covered by personal discussions with him and he would be in a better

position to deal with it.

Drafting of demi-official letters.-(1) As the objective of writing a demi-

official (D.O.) letter is to call the personal attention of the addressee, the style

of writing should be direct, personal and friendly. More usage of active voice is

to be preferred. (E.g., Ì notice' rather than Ìt is noticed'). It is expedient to

come to the issue at the beginning itself, e.g., Ì seek your co-operation in the

matter of...............'

(2) A D.O letter should preferably not exceed one page. If the mes-

sage to be conveyed is lengthy, it is better to condense it into one page in a few

small and healthy divided paragraphs in a manner that holds the interest of the

addressee, the detailed arguments can be set out in appendices.

EXTRACTS FROM `NOTES ON OFFICE PROCEDURE' NOTING

Noting is the process of offering remarks on a paper under consideration to

facilitate the decision-making authority in arriving at the decision. The volume

of correspondence handled by Government offices is so high that they cannot

afford to waste time and manpower by indulging in unnecessary and avoidable



noting. The following instructions should be kept in view while preparing a

note.

2. Notes:

(i) Notes are written remarks recorded on a paper under consideration

to facilitate its disposal.

(ii) It should consist of précis of previous paper, the statement or

analysis of the question or questions requiring decision,

suggestions on the course of action or orders passed thereon.

(iii) A note recorded by a Minister, the Prime Minister or President

should be referred to as a `Minute'.

(iv) The name, designation and telephone number of officer signing a

note should invariably be typed or stamped with a rubber stamp

below the signature which should be dated. In recording the date,

the month and the year should also be indicated along with the

date.

General Instructions regarding noting:

(i) All notes should be concise and to the point. Excessive noting is

an evil which should be avoided. The officers are required to read

the paper under consideration and the previous notes, if any. The

production of extracts from, or paraphrasing of the P.U.C. or of

notes of other Ministries on the same file should be avoided.

(ii) Any officer who is to note upon a file on which a Running

Summary of Facts is available should, in drawing attention to the

facts of the case, refer to the Summary without repeating any part

of the facts in his own note.

(iii) If apparent errors in the note of another Ministry have to be

pointed out or if the opinion expressed therein has to be criticised,

care should be taken that the observations are expressed in

courteous and temperate language, free from personal remarks.

(iv) If the Branch Officer or higher officer has made any remark on a

receipt, these should first be copied out and then the note should

follow. No note should be written on the receipt itself except in

very routine matters.



(v) When arising out of a single case there are several points requiring

orders, and which form the subject-matter of the file, each point

should be noted upon and submitted to Branch Officer separately.

Such notes will be called Sectional Notes and at the time of

recording should be placed after the main notes in the file

Noting on inter-departmental references:

(i) Inter-departmental references broadly fall under two categories,

namely

(a) cases where reference is merely for ascertaining factual

information; and

(b) cases in which the reference seeks concurrence, opinion or

a ruling from the Ministry referred to.

(ii) In cases falling under (a) the Assistant in the receiving Ministry

may note the required information on the file itself. In cases

falling under (b), it is necessary frequently that the points involved

should be examined in the receiving Ministry. The general rule to

be followed in all such cases is that any examination and noting

should take place off the file and only the final result should be

recorded on the file by the officer responsible for commenting

upon the reference. All notes off the file will be treated a `routine'

note and the officer to whom such notes are submitted will

consider these routine notes and will either accept the routine note

or record a note of his own. In the former case, he may direct that

the note in question or a portion thereof should be reproduced on

the main file for communication to the Ministry concerned. In the

latter case, if the final note is written by hand, it should be written

on the file itself and a copy thereof kept as a record of the final

disposal. If the last note is typewritten, it should be typed on the

file, a carbon copy being made on the routine sheet. The main file

should thereafter be returned to the referring Ministry; the routine

notes which are retained in the Ministry to which the reference is

made, will serve as a record of the view taken in the Ministry for

future reference.

(iv) Where a note on file is recorded by an officer after obtaining the

orders of a higher officer the fact that the views expressed therein



have the approval of such officer should be specifically

mentioned.

Noting on cases referred to under Single File System:

Generally all noting in the Ministry should be on the file of a N.S.O.

(Non-Secretariat Office - Attached or Subordinate), opened by them under the

Single File System and referred to the Ministry for decision, direction or

clarification, etc. However, in certain selected types of cases concerning

sensitive and delicate matters in the sphere of personnel, policy issues and

finance (like vigilance, discipline, promotion, sanction of money out of secret

service fund, difference of opinion amongst senior officers or the Secretary and

the Minister) covered by general or special orders of the Ministry, noting

should be on "duplicate" files (which would indeed be only notes recorded at a

particular stage of the case or at a particular level). The final decision only

should be suitably recorded on the N.S.O. file.

As a convention, Secretariat noting on an N.S.O. file may start on a new

page. If at any stage of its processing in the Secretariat it is felt that the internal

noting or any portion thereof be kept outside the record of the N.S.O. file, such

noting could be suitably edited before the file is returned to the N.S.O.

Functional approach to Noting:

Most of the cases dealt with in Government of India can be divided into

the following five categories:

(i) Planning and Policy (Strategic or Operational) cases.

(ii) Problem solving cases (i.e., those that require examination of

issues).

(iii) Correspondence handling (matters, relating to simple situations).

(iv) Routine.

(v) Unnecessary.

The following guidelines are given for dealing with noting on the above

five categories of cases:



A. Planning and Policy cases:

These would form a very small number in a Section and require a

thorough examination. The questions that may have to be asked will be as

follows:

Purpose:

(i) What is the problem?

(ii) Who is the originator? Is it worth a detailed examination? Are

you the authority who can solve it? If it is another, you should

give helpful and positive guidance.

(iii) Can it be broken up into parts? Which are the major ones and

which are only ancillary? Identify critical factors.

Sequence:

(iv) What are the priorities for solution and which should you choose

first for solution?

(v) What is the origin of the problem?-political, psychological,

human, sociological or administrative.

(vi) What is the background or cause of the problem? How has it

arisen?

(vi) Is it ripe enough for a solution? Can it be modified?

Data

(viii) If more information is essential for a solution strike out a pro

forma for all required data.

- Don't ask for information piecemeal. Ask for all details which

are both necessary and sufficient.

(ix) If the problem is to be solved, what is the `Rule' position?

Solution

(x) Are there any precedents to ensure even-handed treatment or to

avoid repetition of past mistakes? `



- Find out whether the proposal had earlier been considered and

rejected. If so, find out whether any new grounds have been

advanced for reconsideration.

(xi) What are the possible alternative solutions?

(xii) Which is the best solution? Why?

(xiii) What will be the consequences on the totality of the situation?

B. Problem Solving Cases:

In these cases a short Para in respect of each of the following questions

would suffice:

(i) What is the problem?

(ii) How has it arisen?

(iii) What is the "Rule", "Policy" or "Precedent" position?

(iv) What are the possible solutions?

(v) Which is the best solution? Why?

(vi) What will be the consequences of the proposed solution?

C. Correspondence handling cases:

These do not require any detailed noting. It would suffice if a brief note,

as indicated below, is recorded-

"This is in reply to our letter at S. No................ In brief the point

is............ A reply as in the D.F.A. is put up."

D. Routine cases

In respect of these cases, "A standard Process Sheet" which means a

standard skeleton note developed for a repetitive item of work indicating pre-

determined points of check or aspects to be noted upon should be used. In non-

repetitive cases, a fair draft should be put up without any noting.



E. Unnecessary cases:

These should be filed at the Dak stage itself by the Section Officer or

desk functionary recording in brief the reasons why no action is necessary.

They should be kept in File "O" bundle, i.e., cases to be kept with the Draft and

destroyed on 31st December of every year. Such a functional noting, if

followed by the dealing Assistants and the desk functionaries would greatly

facilitate the decision making authority to choose the best alternative in any

problem. It would be convenient if the answers to the queries are put in short

Paras, preferably in type.

If this functional noting is practiced regularly, it will contribute greatly

to an analytical view of things and improve the quality of noting. Such noting

should, however, be adhered to only if cases require detailed noting and not in

cases where drafts could be submitted without notes to the Divisional Head

after discussion with him where necessary.

Hints for preparation of Summary or Statement of cases for Secretary or

Minister:

As provided in the Manual of Office Procedure, it might be necessary to

prepare a self-contained summary when cases are to be submitted to the

Secretary or Minister. In such cases, the following points may be carefully

observed:

(i) A brief subject heading should be given in all such cases.

(ii) The summary should more or less give chronological facts of the

case and should not omit any important considerations that could

affect the decision.

(iii) If the case concerns other Ministries or Divisions, the summary

should contain the recommendation of that Ministry or Division

and in case of disagreement, the points of difference and the

recommendation of the Department concerned. Opinions of

individual officers within a Department should not find mention.

(iv) The concluding paragraph should contain the point or points on

which decision of the Minister is sought together with

recommendation of the sponsoring officer.



(v) The summary should be self-contained but it should not be

unnecessarily long. Where the material to be submitted is lengthy,

much of it should be relegated to annexures or appendices,

keeping the main summary as brief as possible. This will enable

the higher authorities to study the annexures or appendices if they

want further details on any particular point.

(vi) Paragraphs of the summary should be properly numbered.

(vii) The summary should be typed preferably in single space in small

paragraphs, not exceeding 6 to 8 lines to enable easy reading at

higher levels.

(viii) The annexures should be page numbered consecutively to

facilitate location of the particular page or portion thereof to

which attention might be drawn during discussion or further

noting.

(ix) In cases of long summaries, marginal headings for paragraphs

would be useful.



CCS (Conduct) Rules

A. Do's and Don'ts

Do's: -

1. Maintain absolute integrity at all times.

2. Maintain absolute devotion to duty at all times.

3. Those holding responsible posts - maintain independence and

impartiality in the discharge of your duties.

4. Maintain a responsible and decent standard of conduct in private life.

5. Render prompt and courteous service to the public.

6. Observe proper decorum during lunch break.

7. Report to superiors the fact of your arrest or conviction in a Criminal

Court and the circumstances connected therewith, as soon as it is

possible to do so.

8. Keep away from demonstrations organized by political parties in the

vicinity/neighbourhood of Government offices.

9. Maintain political neutrality.

10. Manage private affairs in such a way as to avoid habitual indebtedness

or insolvency.

11. If any legal proceedings are instituted for the recovery of any debt due

from you or for adjudging you as an insolvent, report the full facts of

such proceedings to the Competent Authority.

12. Act in accordance with Government policies.

13. Observe courtesy and consideration to Members of Parliament and State

Legislatures.

Don'ts: -

1. Do not make joint representations in matters of common interest.

2. Do not indulge in acts unbecoming of a Government servant.

3. Do not be discourteous, dishonest and partial.

4. Do not adopt dilatory tactics in your dealings with the public.

5. Do not convey oral instructions to subordinates. (If done for unavoidable

reasons, confirm them in writing as soon as possible.)

6. Do not practice untouchability.



7. Do not associate yourself with any banned organizations.

8. Do not join any association or demonstration whose objects or activities

are prejudicial to the interest of the sovereignty and integrity of India,

public order or morality.

9. Do not give expression to views on Indian or foreign affairs, while

visiting foreign countries.

10. Do not get involved in unauthorized communication of any official

document or any part thereof or classified information to any

Government servant or any other persons to whom you are not

authorized to communicate such document or classified information. 11.

Do not join or support any illegal strike.

12. Do not enter into any private correspondence with Foreign Embassies or

Missions/High Commissions.

13. Do not accept lavish or frequent hospitality from any individual,

industrial or commercial firms, organizations, etc., having official

dealings with you.

14. Do not accept any offer of the cost of passage to foreign countries or

hospitality by way of free board and lodging there, if such offers are

from foreign firms contracting with Government.

15. Do not accept invitations to you and members of your family for free

inaugural flights offered by Air India, Indian Airlines Corporation or

Foreign Airliners.

16. Do not give or take or abet giving or taking of dowry or demand any

dowry directly or indirectly from the parent or guardian of a bride or

bridegroom.

17. Do not accept any gift from any foreign firm which is having official

dealings.

18. Do not engage yourself in canvassing business of Life Insurance

Agency, Commission Agency or Advertising Agency owned or managed

by the members of your family.

19. Do not lend money to or borrow money from or deposit money as a

member or agent, with any person, firm or private company with whom

you are likely to have official dealings. Do not otherwise place yourself

under pecuniary obligation with such person, firm or private company.

20. Do not approach your subordinates for standing surety for loans taken

from private sources either by you/your relations/friends.

21. Do not undertake private consultancy work.

22. Do not speculate in any stock, share or other investment.



23. Do not purchase shares out of the quota reserved for friends and

associates of Directors of Companies.

24. Do not bid at any auction of property where such auction is arranged by

your own officers.

25. Do not stay as guest with Foreign Diplomats or foreign nationals in

India.

26. Do not invite any Foreign Diplomat to stay with you as your guest in

India.

27. Do not accept or permit your wife or dependants to accept passage

money or free air transport from a Foreign Mission/Government or

Organization.

28. Do not bring any political influence in matters pertaining to your service.

29. Do not consume any intoxicating drinks or drugs while on duty.

30. Do not appear in public place in a state of intoxication.

31. Do not indulge in any act of sexual harassment of any woman at her

work place.

32. Do not employ children below 14 years of age.

33. Do not accept award of monetary benefits instituted by Private

Trusts/Foundations, etc.

B. Acts conduct and commissions which amount to misconduct

The following acts, conduct and commissions of a Government servant amount

to misconduct: -

1. If the act or conduct is prejudicial or likely to be prejudicial to the

interests of the master or to the reputation of the master.

2. If the act or conduct is inconsistent or incompatible with the due or

peaceful discharge of his duty to his master.

3. If the act or conduct of a servant makes it unsafe for the employer to

retain him in service.

4. If the act or conduct of the servant is so grossly immoral that all

reasonable men will say that the employee cannot be trusted.

5. If the act or conduct of the employee is such that the master cannot rely

on the faithfulness of his employee.



6. If the act or conduct of the employee is such as to open before him

temptations for not discharging his duties properly.

7. If the servant is abusive or if he disturbs the peace at the place of his

employment.

8. If he is insulting and insubordinate to such a degree as to be

incompatible with the continuance of the relation of master and servant.

9. If the servant is habitually negligent in respect of the duties for which he

is engaged.

10. If the neglect of the servant, though isolated, tends to cause serious

consequences.

11. Willful insubordination or disobedience, whether alone or in

combination with others, to any lawful and reasonable order of a

superior.

12. Infidelity, unfaithfulness, dishonesty, untrustworthiness, theft and fraud,

or dishonesty in connection with the employer's business or property.

13. Strike, picketing, gherao, striking work or inciting others to strike work

in contravention of the provisions of any law, or rule having the force of

law.

14. Gross moral misconduct, acts subversive of discipline, riotous or

disorderly behaviour during working hours at the establishment or any

act subversive of discipline.

15. Riotous and disorderly behaviour during and after the office hours or in

office premises.

16. Habitual late attendance.

17. Negligence or neglect of work or duty amounting to misconduct

Habitual negligence or neglect of work.

18. Habitual absence without permission and overstaying leave.

19. Conviction by a Criminal Court.

NOTE- The terms `servant' and `master' have been used in Court judgments to

indicate the relationship between a subordinate Government servant and his

superiors in the hierarchy of all Central Government Offices.

C. Activities requiring permission / sanction

Prior permission/sanction of the prescribed authority is necessary:

1. To join educational institution or course of studies for University degree.



2. To join Civil Defence Service.

3. To enroll as member of St. John Ambulance Brigade.

4. To join Territorial Army.

5. To join Home Guards Organization.

6. To join foreign language classes conducted by Indo-Foreign Cultural

Organization.

7. To own wholly or in part or conduct or participate in the editing or

management of any newspaper or other periodical publication or

electronic media.

8. To give evidence in connection with any enquiry conducted by any

person, committee or authority.

Exception

(i) Giving evidence at an enquiry before an authority appointed by

Government, Parliament or a State Legislature; or

(ii) Giving evidence in any judicial enquiry; or

(iii) Giving evidence at any departmental enquiry ordered by

authorities subordinate to the Government

9. To ask for or accept contributions to or otherwise associate himself in

the raising of any funds or other collections in cash or in kind in

pursuance of any object whatsoever.

10. To accept gifts from near relatives and personal friends, when the value

exceeds prescribed limits.

11. To accept membership of Book Clubs run by Foreign Agencies.

12. To receive any complimentary or valedictory address or accept any

testimonial or attend any meeting or entertainment held in his honour or

in the honour of any other Government servant.

Exception:

(i) To take part in informal farewell entertainment held on occasions

like retirement or transfer.

(ii) To attend and speak at functions and ceremonies performed by

others in respect of purely non-political or cultural institutions.

13. To engage directly or indirectly in any trade or business, or hold an

elective office, or canvass for a candidate for an elective office, in any

body, or canvass in support of any business of insurance agency,

commission agency, etc., owned or managed by any member of his

family.

14. To accept fee for work done for any private or public body or person.



15. Acceptance of a part-time lectureship in an educational institution which

is in the nature of a regular remunerative occupation.

16. To enroll himself as an Advocate with the Bar Association (subject to

the condition that the Government servant does not engage himself in the

legal profession so long as he continues in Government service).

17. To accept remuneration for services rendered regularly to co-operative

societies.

18. To undertake medical practice during spare time on purely charitable

basis, if registered as a practitioner in any system of medicine.

19. To enter into negotiations with private firms to secure commercial

employment even while in service.

20. To acquire or dispose of any immovable property either directly or

through Power of Attorney by lease, mortgage, purchase, sale, gift or

otherwise either in his own name or in the name of any member of his

family, if the above transaction is with a person having official dealings

with the Government servant.

21. To enter into transactions in movable property, if its value exceeds

prescribed limits and if the transaction is with a person having official

dealings with the Government servant.

22. (a) To acquire by purchase, mortgage, lease, gift or otherwise, either

in his own name or in the name of any member of his family any

immovable property situated outside India.

(b) To dispose of, by sale, mortgage, gift or otherwise or grant any

lease in respect of any immovable property situated outside India which

was acquired or held by him either in his own name or in the name of

any member of his family.

(c) To enter into any transaction with any foreigner, foreign

Government, foreign organization or concern

(i) For the acquisition, by purchase, mortgage, lease, gift or

otherwise, either in his own name or in the name of any

member of his family of any immovable property.

(ii) For the disposal of, by sale, mortgage, gift or otherwise, or

the grant of any lease in respect of immovable property

which was acquired or is held by him either in his own

name or in the name of any member of his family.



23. To have recourse to any Court or to the press for the vindication of any

official act this has been the subject matter of adverse criticism or an

attack of a defamatory character.

24. To stay with Foreign Diplomats and foreign nationals abroad.

25. To be members of or actively participate in the activities of Indo-Foreign

Cultural Organizations.

26. In the case of pensioners who, immediately before retirement, were

Group 'A' Officers, to accept any commercial employment before the

expiry of two years from the date of retirement.

In the case of Items 8, 9, 20, 21, 22 and 23 above, if the permission sought for

is not refused within the time-limit specified below, a Government servant is

free to assume that the permission sought for has been granted.

Item No. Time-limit

20, 21 ... ... 30 days.

22 ... ... 60 days.

23 ... ... 3 months.

D. Activities not requiring permission / sanction

In the following cases, permission of the prescribed authority is not

necessary:

1. To seek redress in Courts of Law or in Central Administrative Tribunals

of grievances arising out of employment or conditions of service.

2. To participate during spare time in 'Shramdhan' organized by

Government Departments or Bharat Sewak Samaj.

3. To become members of Samyuktha Sadhachar Samithi.

4. To publish a book himself or through a publisher, in the bona fide

discharge of his duties.

5. To submit Memoranda before Pay Commissions by individual

Government servants in their individual capacity (individual grievances

should not be put to the Commission).

6. To participate in Flag Day Collections on a voluntary basis.



7. To participate in the fund raising efforts of the "National Foundation for

Communal Harmony".

8. To undertake honorary work of a social or charitable nature.

9. To undertake occasional work of a literary, artistic or scientific

character.

10. To participate in sports activities as an amateur.

11. To take part in the registration, promotion or management (not involving

the holding of an elective office) of a literary, scientific or charitable

society or of a club or similar organization or a co-operative society

substantially for the benefit of Government servants.

E. Unauthorized absence-Break in service

1. Wilful absence from duty not covered by grant of leave will be treated

as dies non for all purposes, viz., increment, leave and pension. Such

absence without leave standing singly and not in continuation of any

authorized leave of absence will constitute an interruption in service

entailing forfeiture of past service for the purpose of pension and

requires condonation by the Appointing Authority for counting past

service for pension. Condonation of such break for pension should be

considered suo motu and cannot be refused as a matter of course, except

in exceptional and grave circumstances.

2. Unauthorized absence after leave will be debited against his half pay

leave account, excess, if any, being treated as extraordinary leave.

However, he will not be entitled to any leave salary.

3. All cases of unauthorized absence from duty or in continuation of leave

will render a Government servant liable to disciplinary action, treating it

as misconduct.

4. Unauthorized absence will be deemed to cause an interruption or break

in service with attendant disabilities

(a) During a strike-declared illegal-of employees working in

industrial establishments.

(b) Acting in combination or in concerted manner, such as during a

strike of other employees.

(c) Remaining absent unauthorizedly or deserting of post-by an

individual employee.



"Strike" includes a general, token, sympathetic or similar strike and

participation in a bandh or similar activities.

5. Order on break in service is to be invoked under FR 17-A after issuing

notice and hearing representation, if any.

6. Disabilities: Ineligibility to LTC, to appear in departmental examina-

tions if prescribed minimum continuous service is affected by the order.

7. The order will not affect special pay and special allowances and

promotion through DPC.

8. The Appointing Authority will act on the representation for condonation

of break in service in the light of the guidelines prescribed. The fact that

break in service has not been condoned for FR 17-A disabilities, should

and need not influence adversely in deciding the question of condonation

for pension.

9. Dies non- Only individual cases of unauthorized absence from duty,

which is not in pursuance of concerted action by a group of employees

acting in combination, is to be treated as dies non. Dies non does not

constitute break in service, but only the days treated as dies non are not

counted as duty for any

F. Government servants and politics

Activities considered objectionable –

1. To be a member of any political party or organization taking part in

politics

2. To be a member or otherwise associated with or having connection with

any banned organization and other extremist left parties.

3. Taking part in, subscribing in aid of, or assisting in any way, any

political movement in India relating to Indian affairs.

4. Attending meetings organized by political parties not in the nature of a

public meeting and held contrary to any prohibitory order or without

permission.

5. Taking active part in holding rallies in support of any political party by

arranging for crowds and arranging transport for bringing crowds.

6. Getting mixed up with demonstrations organized by political parties

held in or passing through the vicinity of the Government office.

7. Speaking at or taking active or prominent part in organizing or

conducting meetings of any political party.



8. Proposing or seconding the nomination of a candidate at an election.

9. Canvassing or otherwise interfering with or using his influence in

connection with or taking part in an election to any legislature or local

body.

10. Acting as election agent, polling agent or counting agent of a candidate

at election.

11. Displaying on his person, vehicle or residence of any electoral symbol

in connection with an election.

12. A Government servant should endeavour to prevent any member of his

family from taking part in, subscribing in aid of, or assisting in any other

manner any movement or activity which is (or tends to be directly or

indirectly) subversive of the Government. If he is unable to do so, he

should make a report to that effect to the Government.

Activities which are permitted-

1. In due performance of a duty imposed on him, making normal

arrangements during election tours of Ministers to enable them to carry

out their responsibilities as Ministers.

2. Exercising his right to vote in an election. He should not give any

indication of the manner in which he proposes to vote or has voted.

3. Participating with due permission in the activities of non-official and

non-political organizations not interfering with due discharge of his

official duties.

4. Occasional attendance in political meetings.-

G. Property Transactions

1. Transactions by Government servant out of own funds.

(i) Immovables- When a Government servant acquires, or disposes of

any immovable property or through Power of Attorney, directly by lease,

mortgage, purchase, sale, gift or otherwise either in his own name or in

the name of any member of his family, he should give prior intimation to

the prescribed authority regarding such transactions.

(ii) Movables- Any transaction in movable property by the

Government servant either in his own name or in the name of any

member of his family should be reported to the prescribed authority



within one month of such transaction, if the value of such property

exceeds

(a) Rs. 20,000 in the case of Group A/Group B, Officers, or

(b) Rs. 15,000 in the case of Group C/Group D, employees.

In both the cases, if the transaction is with a person having official

dealings with the employee, previous sanction of the prescribed authority is

necessary.

Movable property includes:

(a) Jewellery.

(b) Insurance Policies, the annual-premia of which exceeds Rs. 10,000 or

1/6 th of the total annual emoluments of the official (whichever is less)

(c) Shares, Securities and Debentures.

(d) Loans advanced or taken by such employees, whether secured or not.

(e) Motor cars, motor cycles and other means of conveyance, and

(f) Radios, television sets, radiograms and refrigerators.

NOTE- In addition, if the total transactions in shares, securities, debentures,

mutual funds, etc., during a calendar year exceed Rs. 50,000 by a Group `A'/`B'

officer and Rs. 25,000 in the case of a Group `C'/`D' employee, intimation is to

be sent to the prescribed authority.

Prescribed authority- The Head of Department for Group `A' and Group

`B' Officers, and Head of Office for others

2. Transactions of family members

Transactions entered into by the family members of a Government servant out

of their own funds (including stridhan, gifts, inheritance, etc.) in their own

names, need not be reported to Government (such transactions do not attract

Conduct Rules)

3. Annual property returns, by 31st January

Group 'A' and Group `B' Officers shall submit an annual return "as on 31st

December" every year giving full particulars of immovable property



inherited/owned/acquired/held by them on lease or mortgage either in their

own name, or in any of their family member's name, or in any other person's

name. If there is no change, in any year, it is enough if an entry "No change" or

"same as last year" is made in the return.

4. Transactions with foreigners or in property outside India

Transaction in immovable property situated outside India and transaction in

immovable property with any foreigner/foreign Government/foreign

organization/foreign concern require previous sanction of the prescribed

authority whether the transaction is in the official's name or in any of his

family member's name.

5. Construction of house

Construction of a house amounts to acquisition of immovable property for

which intimation/sanction is required. This is independent of sanction of

Government loan. Same is the case where the expenditure incurred on repairs

or minor construction work in respect of any house is estimated to exceed

Rs.10, 000.

6. Time-limit for permission

If the prescribed authority does not communicate/refuse its sanction within

sixty days of the receipt of the request in respect of cases covered by 4 above

and within thirty days in all other cases, the official is free to assume grant of

sanction.

7. Punitive action

Non-furnishing of returns in time or furnishing wrong information will be

'good and sufficient reason' for taking disciplinary action against the officer.



H. Acceptance of Gifts

1. General order

Government servants should not accept or permit any member of his family or

any other person acting on his behalf to accept any gift except in certain cases.

2. Exception. (a) When report necessary- Customary gifts may be

accepted from near relatives and personal friends having no official dealings on

occasions such as weddings, anniversaries, funerals, or religious functions. In

such cases, the Government servant should report to the Government if the

value of the gift exceeds the following limits: -

Cadre From near relatives and from

personal friends having no official dealings

Group `A' Rs. 7,000

Group `B' Rs. 4,000

Group `C' Rs. 2,000

Group `D' Rs. 1,000

(b) When sanction necessary.- In any other case, including from

any firm other than those referred to in Item 4 below, if the value of the gift

exceeds Rs. 1,500 in respect of Group `A' / Group `B' Officers and Rs. 500 in

respect of Group `C'/Group `D' officers, it should not be accepted except with

the sanction of the Government.

If the sanction sought for is not refused within 30 days, it may be

assumed that the sanction sought for has been granted.

3. From foreign dignitaries

Government servants, being members of Indian delegation or otherwise, may

receive and retain gifts from foreign dignitaries if the market value of gifts

received on one occasion does not exceed Rs. 1,000. Acceptance and retention

of gifts in all other cases, is to be regulated by the instructions on the subject.



4. From foreign firms

Government servants should not accept any gift from any foreign firm which is

either contracting with the Government or is one with which they had, have or

likely to have official dealing.

5. Gift

Gift includes free transport, boarding, lodging, or other service or any other

pecuniary advantage provided by any person other than a near relative or

personal friend having no official dealings with the Government servant

6. From Private Trusts

Government servants should not accept any awards of monetary benefits

instituted by Private Trusts/Foundations.

I. Restrictions regarding marriage

1. Before appointment

Bigamous marriage being a disqualification, the following persons is ineligible

for appointment under Government:

(a) Who has entered into or contracted a marriage with a person

having a spouse living; or

(b) Who, having a spouse living, has entered into or contracted a

marriage with any person.

Prescribed declaration in this regard is required to be obtained from every new

entrant to Government service.

A person will be exempted from the above restrictions only if Government is

satisfied that such a marriage is permissible under the personal law applicable

to such a person and the other party to the marriage and there are other grounds

for so doing.



2. After appointment.

Similar restrictions continue even after appointment in Government service. A

Government servant should not

(a) enter into or contract a marriage with a person who has already a

living spouse;

Or

(b) enter into or contract a marriage with any person if the

Government servant has a spouse living.

3. If an employee not governed by the Hindu Marriage Act, desires to

contract a marriage while the spouse is living, he has to apply to the

Government for permission to marry either under the personal law

applicable to him or on other grounds. Such applications will be

scrutinized by the Competent Authority as to the adequacy of the

grounds for allowing an exception to Government's general policy and

orders issued.

4. Any employee, governed by the Hindu Marriages Act, whose spouse is

living cannot enter into or contract a second marriage unless the earlier

marriage is terminated by means of divorce obtained from a competent

Court of Law. Even a marriage which is legally null and void by reason

of there being a spouse living at the time of the marriage would

disqualify the person concerned for appointment to/continuation in

Government service.

5. A divorcee need not seek permission to contract a second marriage with

a divorcee or a person having no spouse living.

6. When a Government servant marries or is married to a foreign national,

the fact should be intimated to the Government

J. Dowry

1. Dowry prohibited A Government servant shall not

(a) Give or take or abet the giving/taking the dowry.

(b) Demand any dowry directly or indirectly from the parent or

guardian of a bride/bridegroom.



2. "Dowry" defined

Dowry means any property or valuable security given or agreed to be

given either directly or indirectly

(a) by one party to a marriage to the other party; or

(b) by the parents of either party to a marriage or by any other person

to either party to the marriage or to any other person at or before or any time

after the marriage in connection with the marriage.

It does not include 'Dower' or 'Maher' under the Muslim personal law

Section 2, Dowry Prohibition Act, 1961 (Act 28 of 1961).

"Valuable Security"

Denotes a document which is or purpose to be a document whereby any legal

right is created/extended/transferred/restricted/ extinguished/released or

whereby any person acknowledges that he lies under legal liability or has not a

certain legal right.-- Section 30, Indian Penal Code (45 of 1860).

3. Wedding Gifts

Voluntary gifts given at the time of marriage to the bride / bridegroom are

permissible; but a signed list of such presents should be maintained. The

presents should be of a customary nature and their value should be

commensurate with the financial st4tus of the giver- Section 3 (2) of Dowry

Prohibition Act, 1961.

4. Consequences of violation

Any violation of the Dowry Prohibition Act by a Government servant will

constitute a good and sufficient reason for instituting disciplinary proceedings

against him, in addition to such legal action as may be taken against him in

accordance with the provisions of the Act.

5. Dowry Death

If a Government servant is involved in a case of "Dowry Death", it is a serious

offence. For action to be taken, see under the subject "Suspension" in the

Chapter "Discipline Rules".



K. Sexual Harassment of working women

1. Sexual Harassment defined-

Unwelcome sexually determined behaviour, whether directly or by implication,

such as:

1. Physical contact and advances.

2. Demand or request for sexual favours.

3. Sexually coloured remarks.

4. Showing pornography.

5. Any other unwelcome physical, verbal or non-verbal conduct of

sexual nature.

2. Unbecoming of a Government servant-

Any act of sexual harassment of women employees attracts the provisions of

Rule 3 (1) (iii) of Conduct Rules, as an act unbecoming of a Government

servant and amounts to misconduct.

3. Criminal Proceedings-

If such an act of sexual harassment amounts to any specified offence under the

Indian Penal Code or under any other law, complaint should be made to the

appropriate authority for taking criminal action for such misconduct.

4. Complaint Mechanism-

An appropriate complaint mechanism should be created in every organization

for redress of such complaints and time-bound treatment of the complaints

should be ensured. Victims or witnesses should not be victimized or

discriminated against while dealing with such cases. The report of the

Complaints Committee shall be treated as an enquiry report.

5. Request Transfer-

The victims of sexual harassment have the option to seek transfer of the

perpetrator or their own transfer.



L. Assistance to Government servants in legal proceedings

1. Matters unconnected with official duties –

Government will not give any financial assistance to a Government servant in

the conduct of any legal proceedings on matters not connected with his official

position or duties.

2. Matters connected with official duties-

Government assistance will, however, be admissible in the conduct of legal

proceedings instituted against him or by him regarding matters connected with

his official position or duties, to the following extent:

(i) Cases filed by Government against the Government servant.-No

assistance is admissible in such proceedings - civil or criminal. In case the

proceedings conclude in the employee's favour, reimbursement of the whole or

any reasonable proportion of the expenses will be considered by the

Government, if it is satisfied that he was subjected to the strain of the

proceedings without proper justification.

(ii) Cases filed by private parties against the Government servant.-If it is

considered in public interest that Government itself should arrange for the

conduct of the proceedings, it may do so, on the Government servant agreeing

to it. Otherwise, reimbursement to the Government servant of reasonable cost

incurred by him in conducting his Defence will be considered by the

Government, not merely if the proceedings conclude in his favour but on

consideration how far the Court has vindicated the acts of the Government

servant. An interest free advance equal to his substantive pay for three months

and advance from his GPF are, however, admissible, for the purpose of his

defense.

(iii) Cases filed by a Government servant on his being required to

vindicate his official conduct- Interest-free advance will be sanctioned to him

for the purpose. The extent of reimbursement by the Government will be

decided considering to what extent the Court has vindicated the acts of the

Government servant, in the proceedings.

(iv) Cases filed by a Government servant to vindicate his conduct

requiring prior sanction of Government- In deserving cases, Government will

sanction interest-free advance for the conduct of the proceedings; but no part of



the expenses will be reimbursed by the Government even if the Government

servant succeeds in the proceedings.

If permission sought for is not refused within 3 months, the Government

servant is free to assume that the permission sought for has been granted.

(v) In a civil suit where both the Government servant and the

Government are impleaded.- The Government servant for his liability to

damages for negligence in discharge of official duties of civil nature and the

Government for its vicarious liability - if the defense is substantially the same

for both - Government will arrange for its employee's defense also.

(vi) Cases filed against the Government servant by another Government

servant in respect of matters connected with the formers official position/

duties- Same as at Item (ii) above. This will not apply if he is impleaded as

correspondent in suits against the Government in regard to conditions of

service, seniority, etc



OVERVIEW OF CCS (CCA) RULES

Disciplinary Proceedings

The procedure to be followed in disciplinary cases against Government

servants is laid down in detail in the Central Civil Services (Classification,

Control and Appeal) Rules, 1965. These rules have been framed in conformity

with the provisions of Article 311 of the Constitution. These rules along with

Article referred to have necessarily to be studied carefully and thoroughly by

all authorities who have been vested with disciplinary powers. These rules and

instructions and clarifications issued by various authorities from time to time in

regard to the application of these rules, find a place in this Compilation. It is

absolutely necessary that the procedure as laid down in these rules and the

various instructions issued there under are required to be followed rigidly. Any

failure to observe the proper procedure, either willfully or through gross

negligence is liable vitiate the entire proceedings rendering them null and void.

A brief outline of the implications of the various rules and instructions for the

guidance of handling disciplinary cases is given below

PRELMINARY ENQUIRY

1. Whenever intimation is received about the commission of an offence by an

employee, a preliminary enquiry is conducted, not necessarily by the

appropriate disciplinary authority. This is held for the purpose of collection of

facts in regard to the conduct and work of the Government servant concerned

in which he may or he may not be associated. Such a preliminary enquiry may

even be held ex prate, for it is merely for the satisfaction of the concerned

authority. At this enquiry, all available evidences and relevant documents

should be collected and in important cases, evidences of witnesses be reduced

to writing and got signed by them, if possible, in the presence of the employee

concerned. During the course of such an enquiry, for the sake of fairness, the

Government servant complained against should normally be given an

opportunity to say what he may have to say about the allegations against him to

find out if he is in a position to give any satisfactory information or explanation

which may render any further investigation unnecessary.



2. The preliminary enquiry is in the nature of a 'fact-finding enquiry' where

there can be ex prate examination or investigation and ex prate reports. The

investigation report along with the preliminary evidences collected is then

examined by the appropriate authority to come to a decision whether a prima

facie case exists for initiation of formal disciplinary proceedings. The officer

responsible for the decision should take care not to express, as for as possible,

any definite opinion on the merits of the final outcome of the case.

3. The question to be decided at this stage is not whether a Government servant

is guilty or not of an allegation. It is to be seen whether a prima facie case

exists of a certain offence/misconduct/misbehaviour/dereliction of duty. It is

just to find out whether an offence has taken place and if so, whether the

Government servant is prima facie involved in it. If there is prima facie

evidence of commission of a criminal offence beyond reasonable doubt,

initiation of criminal proceedings is to be considered. If, on the other hand,

prima facie evidence is based only on preponderance of probability, then

departmental proceedings may be appropriate.

4. A doubt has been expressed whether departmental action can be taken only

when any particular rule of the Conduct Rules has been violated. It is not so. It

is not necessary that every misconduct should be covered by breach of a rule.

Proceedings can be initiated not only for misconduct but also misbehaviour

which is not included in the book of rules. It is open to take action in respect of

misconduct which falls outside the Government servant's official functions if it

reflects on his reputation for good faith, honesty, integrity and devotion to

duty.

5. The argument that as there is no loss to Government there is no misconduct

is not correct. Loss of public funds is not an essential element of misconduct.

The essential element is perverse conduct or absence of good conduct. Even if

the act is known to cause no loss to public funds, misconduct or attempt to

commit can exist. Both attempt and abetment of misconduct has to be viewed

with the same seriousness. Mala fide is not a necessary element for proving

misconduct. It might be that malafides are not always evident, but they can be

inferred. Repeated incidents also point to motive.

6. Past good or bad conduct of a Government servant should in no way

influence action, if a clear misconduct is made out prima facie.



INITIATION OF PROCEEDINGS

1. Decision to charge-sheet an officer should be taken only when full facts have

been gathered and evaluated and there is controvertible inference that

misconduct has been committed. Once a decision has been taken that formal

disciplinary proceedings should be instituted against the Government servant

under the rules, the disciplinary authority will need to decide whether

proceedings should be taken under Rule 14 or Rule 16, i.e., for imposing a

major or minor penalty. It has to be borne in mind that the nature of

disciplinary action and the quantum of punishment are to be commensurate

with the gravity of the offence alleged to have been committed. At this stage,

the seriousness of the misconduct and the character of the charged official

come into consideration. Major penalty proceedings may be appropriate in

cases such as involving gross irregularity or negligence, misuse of official

position, disclosure of secret or confidential information, false claims, i.e.,

where there is distinct lack of character. Cases which involve moral turpitude

or failure to maintain integrity would always justify initiation of major penalty

proceedings.

2. An illustrative but not exhaustive list of types of cases involving moral

turpitude and failure to maintain integrity is available at Instruction (3) under

Rule 14 of CCS (CCA) Rules.

SUSPENSIONS

1. At this stage itself, the competent authority has to examine whether pending

disciplinary proceedings the official is to be placed under suspension and issue

orders accordingly in the Form prescribed.

APPROPRIATE DISCIPLINARY AUTHORITY IN MAJOR PENALTY

PROCEEDINGS

1. None of the major penalties can be imposed on any person who is a member

of a Civil Service of the Union or an All India Service or holds a civil post

under the Union by an authority subordinate to that by which he was appointed.

Under no circumstances, the appointing authority can delegate his power to a

subordinate authority. The underlying idea is that a Government servant is



entitled to the judgment of the authority by whom he had been appointed or of

an authority superior to -that authority and that he should not be awarded any

major penalty by a lower authority in whose judgment he may not have the

same faith. The provisions will apply to dismissal or removal, whether in a

disciplinary case or on account of conviction of a Government servant in a

Court of Law or on any other ground.

2. It is, therefore, necessary that before any action is initiated under Rule 14

with a view to imposing any of the major penalties on an official, it should first

be verified by the present disciplinary authority whether or not he is lower in

rank than the officer who actually appointed the official. In case, the appointing

authority is of higher rank than the present disciplinary authority the fact

should be reported to the Department/Ministry concerned for issue of

President's Orders nominating another officer to act as the disciplinary

authority in that particular case as per Instruction (4) under Rule 12.

3. If in a particular case a Government servant was appointed by a higher

authority than the one which was competent to make appointment to the post of

Government servant was appointed by a particular authority but subsequently

the power to make appointment to that post or grade was delegated to a lower

authority, it is only that higher authority which actually appointed the

Government servant in question to the post from which he is sought to be

removed or dismissed, that can exercise the power of imposing any of the

major penalties. In the case of appointments made on the basis of selection,

that authority which makes the actual appointment and not that which made or

approved the selection will be the competent one. If a Government servant is

appointed by one authority in a temporary capacity and is confirmed by a

higher authority, the competent authority will be the higher authority which

confirmed the Government servant and not the authority which initially

appointed him.

4. An order imposing a major penalty passed by an authority subordinate to the

appointing authority contravenes the provisions of the rules and in the case of

punishment of dismissal/removal, the provisions of Article

311 (1) and hence defective and any subsequent confirmation of such an order

by the competent authority will not validate it. In such a case, it is necessary

for the competent authority to start fresh proceedings if the circumstances of

the case so warrant.



5. Disciplinary authority in respect of an official is to be determined with

reference to his posting at the relevant stage of the disciplinary case w id not

with reference to his posting and status at the time of commission of the

offence.

6. There is no bar for the authority who conducted the preliminary enquiry

functioning as disciplinary authority if he happens to be so. In case the charged

official makes allegation against the disciplinary authority, he is obviously

likely to be prejudiced in the case and cannot be reasonably expected to take

independent decision free from bias, the punishing authority should refrain

from dealing with the case himself and should refer it to the next higher

authority to determine whether an independent enquiry officer should be

appointed to enquire and report on the allegations made against the officer or

the case may be dealt with by the punishing authority himself. If the report is

found baseless, the disciplinary authority may be asked to take action and if

some substance is found in the allegations, the next higher authority should

deal with the case himself.

PROCEDURE FOR IMPOSING MINOR PENALTIES

1. On receipt of all the relevant papers connected with the preliminary enquiry

the competent authority should take a decision whether the proceedings should

be initiated for a major or a minor penalty. In cases in which the authority

decides that proceedings should be initiated for imposing a minor penalty, the

authority will inform the Government servant concerned in writing of the

proposal to take action against him in the form prescribed accompanied by a

statement of imputations of misconduct or misbehaviour for which action is

proposed to be taken, giving him such time as may be considered reasonable,

ordinarily not exceeding ten days, for making such representation as the

Government servant may wish to make against the proposal. The memorandum

should be signed only by the disciplinary authority, except when this power has

been delegated to others constitutionally or legally.

2. The grounds on which it is proposed to take action should be reduced to the

form of a definite charge or charges. The charges should be clear, specific and

precise. A separate charge should be framed in respect of each separate

offence. It is desirable that the charges should not be of a petty nature or



unnecessarily numerous. They should not, except where the charge is one of

inefficiency or incompetence, relate to matters which have already been the

subject of previous official enquiry and decision. Care should be taken that no

expression of opinion as to the guilt of the accused official is contained in the

wording of the charge. A charge may be framed only when there is some act in

violation of the rules in different service manuals, CCS (Conduct) Rules,

different circulars or general letters issued. It is, therefore, of greater

importance to quote that rule or order in support of the charge invariably, the

breach of which has constituted the charge.

3. The statement of allegations on which these charges are based should

contain a dispassionate and objective enumeration of the order of events or

succession of facts or any other corroborative material on which it is proposed

to rely for bringing home the charges. Care should be taken that no opinion or

anything that can be construed as an opinion as to the guilt of the official

should appear therein.

4. Rule 16 does not provide for the accused Government servant being given

the facility of inspecting records for preparing his written statement of defense.

There may, however, be cases in which documentary evidence provides the

main grounds for the action proposed to be taken. The denial of access to

records in such cases may handicap the Government servant in preparing his

representation. Requests for inspection of records in such cases have to be

considered by the disciplinary authority on merits.

5. After taking into consideration the representation of the Government servant

or without it, if no such representation is received from him by the date

specified, the disciplinary authority will proceed, after taking into account such

evidence as it may think fit, to record its findings on each imputation of

misconduct or misbehaviour. If as a result of its examination of the case and

after taking the representation made by the Government servant into account,

the disciplinary authority is satisfied that the allegations have not been proved,

the Government servant may be exonerated. An intimation of such exoneration

has to be sent to the Government servant in writing. In case the disciplinary

authority is of the opinion that the allegations against the Government servant

stand substantiated, it may proceed to impose upon him any of the minor

penalties specified in Rule 11 which it is competent to impose.



6. Under Rule 16 (1) (b) the disciplinary authority may, if it thinks fit, in the

circumstances of any particular case, decide that an enquiry should be held in

the manner laid down in sub-rules (3) to (23) of Rule 14, all the formalities

beginning with framing of articles of charge, statement of imputation, etc., will

have to be gone through. For example, in a case in which the Government

servant desires to be heard in person or has requested for access to records or

where the disciplinary authority considers it necessary to have the evidence of

a number of witnesses for substantiating the allegations, the disciplinary

authority may consider holding such an enquiry. In such cases, the procedure to

be followed will be the same as prescribed for an enquiry into a case in which a

major penalty is proposed to be imposed.

7. Under Rule 16 (1-A) if in a case after considering the representation made

by the Government servant it is proposed to withhold increments of pay and

such withholding of increments is likely to affect adversely the amount of

pension payable to the, Government servant or to withhold increments of pay

for a period exceeding three years or to withhold increments of pay with

cumulative effect for any period, the enquiry envisaged in Para. 5.6 supra has

to be held before making any order imposing on the Government servant any

such penalty. Separate form has been prescribed for initiation of further

proceedings.

8. When the intention is to issue a fresh charge-sheet later, the order cancelling

the original one or dropping the proceedings should be carefully worded so as

to mention the reasons for such an action and indicating the intention of issuing

a subsequent charge-sheet appropriate to the nature of charges.

PROCEDURE FOR IMPOSING MAJOR PENALTIES

1. Under Clause (2) of Article 311 no person who is a member of a civil

service of the Union or an All India Service or holds a civil post under the

Union shall be dismissed or removed or reduced in rank except after an inquiry

in which he has been informed of the charges against him and given a

reasonable opportunity of being heard in respect of those charges.

2. As soon as a decision has been taken by the competent authority to start

disciplinary proceedings for a major penalty, that authority will draw up on the

basis of the material gathered during the preliminary investigation, the charge-



sheet in the form prescribed, duly accompanied by a statement of articles of

charge, statement of imputations of misconduct or misbehaviour in support of

the articles of charge, list of documents with which the articles of charge

framed are proposed to be sustained and list of witnesses by whom the articles

of charge framed are proposed to be sustained. The memorandum should be

signed by the disciplinary authority, except when this power has been

delegated constitutionally or legally.

3. A charge may be described as the essence of an allegation setting out the

nature of the accusation in general terms, such as negligence in the per-

formance of official duties, inefficiency, breach of conduct rule, etc. The

articles of charge should be framed with great care. Each charge should be

expressed in clear and precise terms and should not be vague.

4. The following guidelines will be helpful in framing a charge sheet:-

(a) A separate charge should be framed in respect of each separate

transaction/event or a series of related transactions/events amounting to

misconduct/misbehaviour.

(b) If the transaction/event amounts to more than one type of misconduct

then all the misconducts should be mentioned.

(c) If a transaction/event shows that the Government servant must be

guilty of one or the other of misconducts depending on one or the other

set of circumstances, then the charge can be in the alternative.

(d) Multiplication or splitting up of charges on the basis of the same

allegation is to be avoided.

(e) The articles of charge should first give plain facts and then mention the

nature of misconduct/misbehaviour.

(f) The wording of the charge should not appear to be an expression of

opinion as to the guilt of the accused. Any statement which snacks of

expression of opinion and draws some positive conclusions against the

Government servant should be strictly avoided.

(g) A charge should not relate to a matter which had already been the

subject-matter of an inquiry resulting in conviction/punishment/ac-

quittal/exoneration, unless it is based on benefit of doubt or on technical

consideration.

(h) A charge should not refer to the report on preliminary investigation.



(i) There is no bar to include all charges of violation of departmental rules

as well as criminal offences which can be taken up departmentally, e.g.,

misappropriation of Government money, defalcation and theft of

departmental materials, etc. In the case of departmental proceedings,

reference to various clauses of the Indian Penal Code should be avoided.

The proceedings should be based on the failure to observe departmental

rules and regulations. For instance, in the case of theft of a registered or

insured article the charge against an employee may not be theft of that

article but failure to account for the article entrusted to him.

(j) All the data, figures, dates, etc., included in the imputation should be

carefully checked before the issue of the charge-sheet as lot of

difficulties crop up when come clerical error in these figures or dates

later on comes to notice.

5. Rule 3 (1) of the Central Civil Services (Conduct) Rules, 1964, provided that

a Government servant shall at all time maintain absolute integrity and devotion

to duty and do nothing unbecoming of a Government servant. This rule serves

the specific purpose of converting acts of misconduct not covered by other

specific provisions of the Rules. It is therefore, necessary to satisfy in the first

instance whether the alleged acts of misconduct do not attract the provisions of

any specific rule before taking recourse to Rule 3 (1) ibid. Where action is

taken under Rule 3 (1) particularly on grounds of unbecoming conduct, special

care should be taken to eliminate cases of a trivial nature and to ensure that

disciplinary proceedings under Rule 3 (1) are not initiated on grounds which

are unjustified.

6. The statement of imputation should give a full and precise recitation of the

specific and relevant acts of commission or omission on the part of the

Government servant in support of each charge including any admission or

confession made by the Government servant and any other circumstances

which it is proposed to take into consideration. In particular, in cases of

misconduct/misbehaviour, it should mention the conduct/behaviour expected or

the rule violated. It should be precise and factual. In particular, it would be

improper to call an Investigating Officer's report a statement of imputations.

While drafting the statement of imputations it would not be proper to mention

the defense given at the preliminary investigation and enter into a discussion of

the merits of the case. Wording of the imputations should, however, be clear



enough to justify the imputations in spite of the likely version of the

delinquent. It should be drafted in the third person and in the past tense.

7. The list of witnesses should contain the names of those witnesses who will

be able to give positive evidence to substantiate the allegations. All material

particulars given in the allegations, such as dates, names, figures, totals of

amounts, etc., should be carefully checked, with reference to the original

documents and records, before such documents are included in the list of

documents. In case, there are no documents or witnesses, NIL statements

should be appended as Annexures-III and IV to the charge-sheet.

8. When disciplinary proceedings are initiated on the complaint of a private

party, there should not normally be any necessity to indicate the name of the

complainant unless he is a material witness in the case. When, however,

proceedings are initiated on the basis of the evidence collected after making

investigations into the complaint, there should not be any necessity to indicate

the name of the complainant or the fact that the investigations were started as a

result of the particular complaint.

9. The charge-sheet together with its enclosures should be served in person if

he is on duty and his acknowledgement taken or sent by registered post,

acknowledgement due. If the Government servant evades acceptance of the

charge-sheet and/or refuses to accept the registered cover containing the same,

the charge-sheet will be deemed to have been duly delivered on him as refusal

of a registered letter normally tantamounts to proper service of its contents. If it

is not possible to trace the Government servant and serve the charges on him,

the disciplinary authority may take recourse to Rule 19 (ii) and finalize the

proceedings after dispensing with the inquiry on the ground that it is not

reasonably practicable to hold one.

10. Rule 14 (4) is not intended for submission of any elaborate statement of

defense but only to give an opportunity to the Government servant to admit or

deny his guilt. For admitting or denying the charges, no inspection of

documents is necessary. Hence the rules do not provide for inspection of

documents by the accused official for the submission of his written statement at

this stage. As a measure to cut down delay in the disposal of disciplinary case,

copies of statements of witnesses cited be supplied to the Government servant

along with the charge-sheet, wherever possible.



11. If the delinquent in reply to the charge-sheet tenders an unconditional,

unqualified and unreserved apology and thus owns his guilt, it implies that he

is admitting the charges and is begging to be excused. Such an unconditional

apology can be easily distinguishable from one in which the delinquent while

politely denying the charges, begs for pardon. The admission should, however,

be expressed in writing. It is not sufficient to say that it is implied in his

statement. It has been held that while one may not adopt the concept of

confession as construed under the Criminal Law for purposes of departmental

enquiry, the statement to be utilized as confession must, at any rate, admit the

material facts on the basis of which an inference about the guilt of the person

making the statement could be drawn in unambiguous terms.

12. If the written statement of defense all the charges are admitted by the

Government servant, the disciplinary authority may take such evidence as it

may think fit, record its findings on each charge and take further action on the

findings in the manner prescribed in Rule 15.

13. If the disciplinary authority finds that any or all of the charges have not

been admitted by the Government servant in his written defense or if no written

statement of defense is received by him by the specified date, the disciplinary

authority may itself inquire into such charges as are not admitted or appoint an

Inquiry Officer to inquire into the truth of the charges. Unless unavoidable

under special circumstances the Disciplinary Authority should refrain from

being the Inquiry Officer.

14. While appointing a separate Inquiry Officer the following points are to be

borne in mind. In making a selection, the disciplinary authority should pay due

regard to the seriousness of the alleged offence and also to the status of the

accused officer. Mere knowledge in a general way about an incident does not

debar a person from functioning as an Inquiry Officer, as such prior knowledge

cannot be presumed to bias him. But, if an officer who detects the misconduct

holds the enquiry, he may be said to have prejudged the issue. Similarly, where

the official is the complainant himself, and also the principal witness, he can be

said to be biased. In fairness to the accused officer, as well as to the Inquiry

Officer, the enquiry should not be entrusted to an officer who held the

preliminary enquiry and expressed a definite opinion on the allegations,

especially, where such opinion is adverse to the accused, or to an officer



directly subordinate to him. It has been held desirable that only disinterested

officers are appointed as Inquiry Officers. There is no bar to the immediate

superior officer holding an inquiry but, as a rule, the person who undertakes

this task should not be suspected of any prejudice or bias in such cases. The

inquiry should be conducted by an officer who is sufficiently senior to the

officer whose conduct is being inquired into, as inquiry by a junior officer

cannot command confidence which it deserves.

15. According to the existing instructions an application can be moved by a

Government servant against the appointment of a particular Inquiry Officer on

grounds of bias. This should obviously be done at the earliest stage, i.e., soon

after the appointment of the Inquiry Officer and not after the proceedings have

commenced and reached an advanced stage, unless there are compelling

grounds. If any application is moved, the proceedings should be stayed and the

application referred along with the relevant material to the appropriate

reviewing authority for consideration on merits, on the facts and circumstances

brought out alleging bias on the part of the Inquiry Officer and passing

appropriate orders thereon.

16. If an Inquiry Officer is changed in the middle of a case or if a case is

transferred to another Inquiry Officer, then it is within the discretion of the

Inquiry Officer to hear the case de novo or from the stage which it had reached,

keeping in mind the fact that the charged officer must receive fair and just

treatment consistent with avoidable waste of time.

17. Inquiry proceedings should not be stayed except under orders of a Court of

competent jurisdiction or under the written orders of the Disciplinary Authority

or when an application is made as referred to in Paragraph 15 above.

18. The disciplinary authority at this stage may also nominate a Presenting

Officer who would present on its behalf the case in support of the articles of

charge. Ordinarily a Government servant belonging to the departmental set up

who is conversant with the case will be appointed as the Presenting Officer. In

cases involving complicated points of law, where it may be considered

desirable, a legal practitioner may be appointed to present the case on behalf of

the disciplinary authority. In cases in which the initiation of disciplinary action

is the result of investigation made by the Special Police Establishment, there is



no objection to an official of that Establishment being nominated as the

Presenting Officer.

19. Under the rules the accused officer has also the right to take the assistance

of another Government servant or one under suspension or a retired

Government servant to present the case on his behalf. The term "another

Government servant" has to be interpreted liberally to include all civil servants

of the Union Government as defined in Rule 2 (h) of the CCS (CCA) Rules.

The retired Government servant should have retired from service under the

Central Government. The restrictions placed in this regard in respect of

employees in service and retired employees are: -

(i) The assisting Government servant should be from the headquarters

station of the Government servant or at the place where the inquiry is

held. If the Inquiry Officer so permits having regard to the circumstances

of the case, the assisting Government servant may be from any other

station.

(ii) The assisting Government servant should not have three cases on hand in

which he has to give assistance, while the retired Government servant

five cases.

For this purpose, the accused officer is not required to take prior permission of

the disciplinary authority. He need send only intimation to this effect to the

disciplinary authority. It is, however, necessary for the Government servant

nominated to assist the accused officer to obtain the permission of the former's

controlling authority to absent himself from office in order to assist the accused

Government servant during the enquiry. If, for any compelling reasons, it is not

practicable for the controlling authority of the assisting Government servant to

relieve him without undue delay or without serious detriment to the public

interest to present the case of the delinquent official, he should inform the

Inquiry Officer about it with reasons for being communicated to the accused

official well in time, so that the accused official could choose any other

Government servant to assist him. In other words, the rules do not vest any

discretion in the disciplinary authority in regard to the nomination of a

Government servant to present the case of the delinquent official.



20. The following points should be kept in view by the Disciplinary Authority

while considering the request of the charged official to nominate a

serving/retired Government servant to assist him:

(i) The Government servant should be permitted to have the assistance of a

legal practitioner if the Presenting Officer appointed by the Disciplinary

Authority is a legal practitioner or a Public Prosecutor or Prosecuting

Officer of the CBI or a Government Law Officer (such as Legal Adviser,

Junior Legal Adviser).

The above condition would apply if the retired Government servant is

also a legal practitioner.

(ii) Although no guidelines exist for permitting nomination of a legal

practitioner by the charged official, in a case where the Presenting

Officer appointed by the Disciplinary Authority is not a legal

practitioner, the discretion should be used in favour of the delinquent

official and he should be allowed to engage lawyers as a part of

reasonable opportunity if the facts and the mass of evidence are very

complicated and a layman will be at sea to understand the implications

thereof and prepare a proper defense.

The decision to allow the assistance of a legal practitioner to the accused

official has to be taken on the merit of the case in an impartial manner.

It should be ensured that any order refusing to allow the engagement of a legal

practitioner should specifically state that the circumstances of the case do not

warrant such an appointment.

RULE 14 INQUIRY

1. To enable the Inquiry Officer to hold the enquiry, the Disciplinary Authority

is required to send copies of the documents as indicated in sub-rule (6) of Rule

14, to him. The original documents should normally be available with

the Presenting Officer and only if there is no Presenting Officer

should these be sent to the Inquiry Officer.



2. On receipt of the documents, the Inquiry Officer will send a notice to the

charged officer asking him

(a) to present himself for a preliminary hearing at the appointed place

on a date and time, within ten days; and

(b) to intimate the name of his defense assistant.

3. Normally the venue of the enquiry should be where documents and

witnesses are readily available; but the Inquiry Authority is free to fix any

other venue according to the requirements of the case and convenience of the

parties, from time to time.

4. At the preliminary hearing, the charged officer will be required to state

categorically whether he pleads guilty to any of the articles of charge and if he

has any defense to make. If he pleads unequivocally guilty, the Inquiry Officer

will proceed to record his findings. If the charged officer refuses or omits to

plead or pleads not guilty, the Inquiry Officer will start the formal enquiry. If

the charged officer fails to appear at the preliminary hearing, the Inquiry

Officer may fix the dates and the place for regular hearing and send intimation

under acknowledgement due, to reach him in good time.

5. The Inquiry Officer will also record an order that the charged officer may for

the purpose of preparing his defense (a) inspect within five days documents, a

list of which was sent to him with the charges; (b) submit a list of witnesses to

be examined on his behalf with their addresses indicating what issues they will

help in clarifying; and (c) submit a list of additional documents which he

wishes to have access to, indicating the relevance of the documents to the

presentation of his case. If the charged officer fails to indicate and convince the

Inquiry Officer about the issues to which the deposition of his witnesses and

the production of additional documents are relevant, the Inquiry Officer may

reject the request for examining the wit nesses or requisitioning the documents.

If, however, he finds that the witnesses are relevant, they will be examined.

6. There are two types of documents to which a Government servant involved

in departmental enquiries may have a right of access in defending himself. In

the first category are included the documents on which the disciplinary

authority relies and intended to prove the charges, viz., those in Annexure-III

to the charge-sheet. In the second category fall the documents which even

though not relied upon by the disciplinary authority, are nevertheless required



by the Government servant for preparing his defense and defending himself.

While the right of access to the first category of documents is complete, it is

not unlimited in the case of the latter category. If the documents are relevant

the Inquiry Officer will arrange to have them requisitioned to be shown to the

charged officer. If not relevant, he may in writing refuse to requisition such

documents. The question of relevancy should be looked at from the point of

view of the defense and if there is any possible line of defense to which the

document may, in some way, be relevant, though the relevance is not clear to

the disciplinary authority at the time the request is made, the request for access

should not be rejected. Even when the Inquiry Officer has decided to call for

documents for making them available to the charged officer, the authority

having the custody of possession of the documents may, if it is satisfied for

reasons to be recorded that the production of such documents would be against

public interest or security of the State inform the Inquiry Officer accordingly.

Though it is open to the Government to deny access if in its opinion such

records are not relevant to the case or it is not desirable in the public interest to

allow such access, the power to refuse access to official records should be very

sparingly exercised. In every case, where it is decided to refuse access to any

official document, the reasons for refusal should be cogent and substantial and

should invariably be recorded in writing. The guiding principle is that the

power to access to any document must be exercised in such a way which does

not prevent the delinquent from defending himself adequately and does not

cause him any prejudice.

7. The Ministry of Law has held that under the existing framework of the rules,

no authority other than the Head of the Department can be said to have the

custody or the possession of documents of the Department though such custody

or possession may be `constructive'. In the circumstances, a subordinate

authority is not competent to claim privilege in respect of the requisitioned

documents. The authority concerned should transmit the requisition to the

Head of the Department for his decision and communicate the same to the

Inquiring Authority as soon as possible. Privilege for not producing documents

can be claimed only by the Head of the Department. Hence, whenever it is felt

that a document is confidential and it is considered that it will be prejudicial in

the interest of the State to produce the same in departmental proceedings, the

case should be referred to the Ministry concerned.



8. The following documents should not be summoned:

(a) Report of preliminary inquiry/investigation.

(b) File dealing with the disciplinary case against the Government

servant.

(c) Advice of the Central Vigilance Commission

(d) Advice of the Ministry of Law.

9. It is not ordinarily necessary to supply copies of the various documents and

it would be sufficient if the Government servant is given such access as is

permitted under the rules and instructions. Supply of copies of previous

statements of witnesses is, however, necessary in view of the provision in Note

below Rule 14 (11). Copies of the previous statements of all witnesses who are

to be examined during the enquiry are to be made available to the charged

officer well in time, where asked for, i.e., three clear days before the

examination of the witnesses, if not supplied along with the charge-sheet.

10. On the date and at the time fixed for the inspection of documents the

charged officer will be given facilities to see them. The inspection will be in

the presence of an officer deputed for the purpose and it should be ensured that

the documents are not tampered with during the course of inspection. The

charged officer may keep notes or extracts, but will not be allowed to take

Photostat copies. The Inquiry Officer may, however, arrange to supply

Photostat copy, in case he decides that authenticity of any documents is in

doubt.

11. During the enquiry, the Presenting Officer will produce all documentary

evidence and also have his witnesses examined. Normally, the Presenting

Officer should himself ensure that his witnesses are present. He may in

appropriate cases have summons issued by the Inquiry Officer through

registered post acknowledgement due. If any person is summoned in his of-

ficial capacity, the notice should be served through the controlling authority.

Notice to private witnesses may be sent direct to them or through the Pre-

senting Officer or the charged officer, as the case may be. A Government

servant cannot refuse to be a witness in an enquiry against another Government

servant. Non-compliance to summons can be treated as conduct unbecoming of

the public servant rendering himself liable for disciplinary action.



12. Examination of witnesses, departmental as well as defense, and recording

of evidence, is the important stage in the inquiry proceedings. Personal hearing

enables the Inquiry Officer to watch the demeanour of the witnesses.

Examination of witness will be in three parts--examination-in chief, cross-

examination and re-examination. The cross-examination of witnesses produced

in support of charges against a Government servant is the most powerful

weapon in his hands and is also a very valuable right. It has been held that this

right is a safeguard implicit in Article 311 (2) of the Constitution.

13. Although the rules of evidence contained in the Evidence Act are not

applicable to departmental proceedings, in the absence of any explanation

given to the term "cross-examination" in the departmental rules and

instructions, it has been held that it should ordinarily bear the same meaning as

it has in the Evidence Act "unless any part of such meaning can be shown to be

artificial and not warranted by the rules of natural justice". Though leading

questions (i.e., any question suggesting the answer which the person putting it

wishes or expects to receive, is called a leading question) are permissible in

cross-examination, they cannot be put in examination-in-chief or in re-

examination. Further, the scope of cross-examination is unlimited and need not

be confined to the testimony of the witness in the chief examination. They may

cover the entire field of defense. They must, however, be relevant to the facts

of the case or relate to the credibility of the witness or the evidence given by

him.

14. On the contrary, the re-examination which comes after cross-examination

should be confirmed only to the matters arising out of the cross-examination.

The witness cannot be examined on any new fact, except with the permission

of the Inquiry Officer and when such permission is granted, the delinquent will

automatically have a right of further cross-examination on the points newly

brought out. At the end of examination of each witness, the Inquiry Officer

may also put such questions as he thinks fit.

15. Admitted documents and facts can be taken note of straightway. Earlier

written statement, if any, given by a witness may be read out to him and he

may be specifically questioned whether he admits the same or not. If he does

so, the statement may be marked as an exhibit and the charged officer asked to

proceed with cross-examination. If the witness does not admit the statement in

full, then his statement has to be recorded from the very beginning. The



Presenting Officer should produce documents, which are disputed, through

witnesses. The witnesses should be examined in such a way as to bring out the

case in a logical and understandable manner. He will examine the witnesses

without putting leading questions.

16. After the examination is over, the witnesses may be cross-examined by

the charged officer or his defense assistant. This cross-examination is generally

utilized to bring out facts which have not come out in the examination, to

remove any discrepancies or to prove the reliability or otherwise of the

witnesses. It is the duty of the Inquiry Officer to see that witnesses understand

the question properly before answering it and to protect them against unfair

treatment. He should disallow questions if considered irrelevant, oppressive or

verbose.

General reputation or conduct of a witness should not be allowed to be the

subject-matter of examination or cross-examination; but certified copies of

conviction to the credit of a witness may be entertained which reflect on the

veracity of the witness.

17. After the cross-examination, the Presenting Officer can re-examine his

witnesses on any points on which he has been cross-examined, but not on any

new matter, unless specifically allowed by the Inquiry Officer, in which case,

the charged officer will have the right to further cross-examine the witness.

18. At the discretion of the Inquiry Officer and before the close of the case on

behalf of the Disciplinary Authority, the Presenting Officer may produce new

evidence not included in the original lists supplied to the accused officer, only

when there is an inherent lacuna or defect in the evidence which has been

produced originally. New evidence shall not be permitted or called for or any

witnesses shall not be recalled to fill up any gap in the evidence. Similarly, the

Inquiry Officer may himself call for new evidence or recall and re-examine any

witnesses.

19. After the witnesses on behalf of the Disciplinary Authority have been

examined, the accused officer will be required to state his defense orally or in

writing. He is entitled to produce evidence in support of his defense by

examining himself, if need be and any witness to be produced by him. The

charged officer or his defense assistant will proceed to examine his witnesses



who will then be cross-examined by the Presenting Officer and, if necessary,

re-examined again. Though the charged officer cannot be forced to give

evidence, if he offers himself as his own witness, he can be examined by the

defense assistant and cross-examined by the Presenting Officer.

20. On conclusion of the Government servant's case the Inquiry Officer may

generally question him on the circumstances appearing against him in the

evidence for the purpose of enabling the Government servant to explain any

circumstances appearing in the evidence against him. Thereafter the Presenting

Officer as well as the accused officer have the opportunity to state their

respective cases orally or to file written briefs, if they so desire. Normally the

Inquiry Officer has to hear the arguments that may be advanced by the parties

after their evidence has been closed. He can, however, on his own or on the

desire of the parties, take written briefs. If he does so, he should first take the

brief from the Presenting Officer, supply a copy of the same to the Government

servant and take the reply brief of the latter.

21. The entire proceedings conducted by the Inquiry Officer should be reduced

to writing. The record should include the names of all those present on each

hearing. The Inquiry Officer should invariably record a note on the very day

stating the gist of the request or representation made by the Presenting Officer

or the Government servant and the orders passed thereon. Such notes should

form part of the record of the inquiry. The depositions of each witness is to be

taken down on a separate sheet of paper at the head of which will be entered

the number of the case, the name of the witness and information as to his age,

parentage and calling, etc., to identify him. The depositions will generally be

recorded as narration, but on certain points it may be necessary to record the

questions and answers verbatim. As evidence of each witness is completed, the

Inquiry Officer will read the depositions, as typed or written, to the witness in

the presence of the Government servant. Verbal mistakes or mistakes

committed in typing in the depositions, if any, will be corrected in their

presence. However, if the witness denies the correctness of any part of the

record, the Inquiry Officer may, instead of correcting the evidence, record the

objection of the witness. The depositions of the witnesses are to be

countersigned at every page by the witnesses concerned, the Government

servant and the Inquiry Officer so that the validity of the proceedings are not

questioned by any one at a later date. The Inquiry Officer will record and sign

the following certificate at the end of deposition of each witness:-



“Read over to the witness in the presence of the Government servant and

admitted as correct/objection of witness recorded.”

If any witness refuses to sign the deposition, the Inquiry Officer will record this

fact and append his signature. If a witness deposes in a language other than

English, but the deposition is recorded in English, a translation in the language

in which the witness deposed should be read to him by the Inquiry Officer,

who will record a certificate that the deposition was translated and explained to

the witness in the language in which it was deposed.

22. Copies of statements of witnesses recorded from day-to-day should be

furnished to the Government servant and to the Presenting Officer each day at

the close of the day's proceedings and acquittance obtained.

23. The Inquiry Officer will maintain a daily order-sheet to record in brief the

business transacted on each day of hearing. Requests and representations made

by their party should also be recorded and disposed of in the sheet. In particular

the following points should find mention in the order-sheet:

(a) The additional documents and the witnesses asked for by the

charged officer in his defense.

(b) The additional documents and defense witnesses permitted.

(c) Reasons for disallowing the remaining documents and witnesses.

(d) Whether the additional documents permitted as relevant were

made available for inspection and were inspected by the charged

officer.

(e) If the authority having custody of any such document does not

consent to its production, the fact of such refusal.

24. Though the provisions of the Indian Evidence Act and the Criminal

Procedure Code are not applicable to departmental inquiries, yet as these

provisions are based on principles of natural justice, they should be followed in

the conduct of the departmental proceedings though not as meticulously as in

the Courts of Law. The Inquiry Officer will afford reasonable opportunity to

both sides to present their respective cases to their satisfaction.



DISCIPLINARY PRODEEDINGS

-Major and minor Penalties

INVESTIGATION OF COMPLANTS AND INITIATION OF

DISCIPLINARY PROCEEDING

Whenever complaint against a Govt. servant is received about the

commission of an offense, a preliminary enquiry should be conducted. The

appropriate disciplinary authority need not necessarily conduct this enquiry. An

officer other than the disciplinary authority may conduct this. This is held

mainly for the purpose of collection of facts in regard to the conduct and work

of the Govt. servant in which he may or may not be associated. At this enquiry

all available evidence and relevant documents should be collected. During the

course of such an enquiry the individual against who compliant has been

received should normally be given opportunity to say what he may have to say

about the allegation against him to find out if he is in a position to give any

satisfactory information or explanation, which may render any further

investigation unnecessary.

The investigation report along with preliminary evidences collected

should be sent to appropriate disciplinary authority by the Investigating

Officer. The investigating officer should not give any opinion or

recommendations for consideration by the disciplinary authority. On receipt of

the Investigating Report, the-disciplinary authority should examine the case

and come to the conclusion as to whether a prima facie case exists of a certain

offense/ misconduct/ misbehaviour/ dereliction of duty. If there is prima facie

evidence of commission of an offense beyond reasonable doubt for initiation of

criminal proceedings, he should do so. If on the other hand, prima facie

evidence is based only on preponderance of probability, then departmental

proceedings may be necessary. The departmental action may be initiated not

only for the violation of CCS (Conduct) Rules but also for perverse conduct

not covered under Conduct Rules.

INITIATION OF PROCEEDINGS

After collection of full facts and its evaluation, it is found that the Govt.

servant has committed misconduct; the disciplinary authority should decide



whether formal disciplinary proceeding should be instituted under CCS (CCA)

Rules for minor or for major penalty. The disciplinary authority should keep in

mind that the disciplinary action and the quantum of punishment are to be

commensurate with the gravity of the offense alleged to have been committed

by the Govt. servant. Major penalty proceedings should normally be initiated

for misuse of official position, disclosure of classified.-information, misuse of

official position, failure to maintain integrity etc. At his stage itself, the

competent authority would decide whether the Govt. servant should be

suspended or otherwise. If in the opinion of the competent authority that the

presence of the charged Govt. official in the office would hamper the

investigation, he may be suspended pending inquiry. The charge sheet should

be served to the charged officer within 3 months of his suspension. The

charged officer will be allowed to appeal against the suspension within 45 days

of his suspension provided the reasons for „ the suspension indicated in the

suspension order. If the reasons are not indicated in the suspension order, he

should file his appeal within 45 days of receipt of charge sheet. The charged

officer is eligible for subsistence allowance as admissible under rules during

the period of suspension. The appellate authority may confirm or set aside the

suspension order according to the merits of the case.

Court of Inquiry is not mandatory in minor penalty cases. However in

major penalty cases, court of inquiry should be convened. Disciplinary

authority while appointing Inquiry Officer should take into consideration the

seriousness of the offense and also the status of the accused officer. An officer

who is sufficiently senior to the officer whose conduct is being inquired into

should conduct the inquiry. The officer who has conducted the preliminary

investigation should not be appointed as Inquiry Officer. Similarly, the officer

who is the principal witness in the case should not be appointed as Inquiry

Officer. A presenting officer will also be appointed for conducting the inquiry.

On finaliasation of Disciplinary case, the Inquiry Officer will submit his report

indicating the charges that have been sustained and the have not been

established. A copy of the Inquiry Report is to be given to the in-charge officer

for submitting his representation if any. The appellate authority would examine

the representation and pass an order by confirming / modifying or set aside the

penalty accordingly to the merits of the case.



WRITING OF ACR AND HANDLING OF ADVERSE REMARKS

CONFIDENTIAL REPORT

Purpose and importance of Confidential Report: -

CR is an objective assessment of the work and conduct of a Government

servant. Assessments of CRs are the main criteria for confirmation, Promotion,

Review under FR 56 (j) for premature retirement etc. Writing and maintenance

of CRs therefore, assumes importance, not only in the interest of service but

also in the interest of the employee.

1. Responsibilities for maintenance of CRs: The Head of every Department

/ Office should regard it as his personal and special responsibility to

ensure that ACRs are properly maintained in respect of all persons

working under his direct or ultimate control.

2. Objectivity in confidential reports and assessment at more than one

level: - CR to be written by the Reporting Officer immediately superior

to the employee concerned and Reviewed by next higher authority. In

both cases they should have supervised the work of employee for not

less than three months. If they are under suspension, they should write

/Review the reports within two months of date of suspension or one

month of due date of completion of CRs, which ever is later. Writing /

Reviewing not permissible after this time limit. If, however, they are

under suspension during major part of the Writing / Reviewing period,

they should not write CRs. If the employee concerned happens to be a

relative, Reporting or Reviewing, as the case may be, to be done by the

next higher authority.

3. The Reviewing Officer is free to make his remarks on points not even

mentioned by the Reporting Officer. Such additional remarks would, in

fact, are necessary where the report is too brief, vague or cryptic

(mysterious).



4. Period of reporting: In every Department Confidential Reports should be

recorded annually according to financial year i. e. 1st April to 31st

March. (In some departments like Central Secretariat Service, Central

Secretariat clerical Service, Central Secretariat Stenographers Service,

Calendar year system is still continued). It has now been decided that the

reporting period of these officers to be changed from Calendar year to

financial year in order to fall in line with the majority services to

coincide with the period of Annual Action Plan of the Ministries /

Departments of the Govt. of India.

5. CR Format: CR formats for different levels of posts have been

prescribed with changes duly made after introduction of self-appraisal

system groups ‘C’ and ‘B’ also. Departments to follow these model

forms and prescribed formats suitably for other categories under their

control. Departments have also asked to introduce to bilingual forms.

6. History Sheet: A History sheet in a prescribed form may be added at

beginning of the character roll of Government servant belonging to the

Central Services. A passport size photograph of the concern officer

should be affixed at the right hand top corner of the History sheet, placed

in the beginning of the CR dossier, in so far as Group ‘A’ officers are

concerned. Any additional qualifications or experience acquired, if any,

by them may be entered in the sheet.

7. Self-appraisal or self assessment: CR to be performance orientated.

Groups ‘A’ ‘B’ and ‘C’ officers required to submit brief resume not

exceeding 300 words as Self-appraisal, relating to the period of Report.

Submission of lengthy notes in separate sheets to be avoided. To be

completed and submitted before due date, duly signed and dated. Self

appraisal is not necessary for a period of less than three months. The

reporting / reviewing officer can write/review the CR of an officer if it

has at least an experience of three months of work and conduct of the

officer reported upon. Part Reports: Part Reports necessary- (a) If an

officer transferred during the middle of the reporting year, he should

immediately write the CRs of his subordinates in respect of the year for

the period up to the date of his transfer, provided that the period is at

least six months, and the reports should be submitted to the reviewing



authority. (b) If the reviewing officer also transferred not

simultaneously with reporting officer, but after some times, he will hand

over CR to his successor and successor officer will review the report, if

he happens to be three months experience, other wise the previous

reviewing authority will review report at the end of the year. If however,

a reviewing authority retires and while there is no change in the

reporting officer and the subsequent reviewing officer does not have

three months experience of the work and the conduct of the reportee, the

reviewing portion will be left blank with suitable note, recorded therein.

Report to be written within one month of the expiry of report

period:

The annual report should be recoded within one month of the expiry of the

report and delay in this regard on the part of the reporting officer should be

adversely commented upon; if the officer to be reported upon delays

submission of self-appraisal, this should be adversely commented upon by

the reporting officer.

When there is no Reporting Officer having the requisite experience:

When there is no Reporting Officer having no experience of three months

or more during the period of report, the Reviewing himself may initiate the

report as a Reporting Officer, provided the Reviewing Officer has been the

same for the entire period of and he is in a position to fill in the columns to

be filled in by the Reporting Officer. When a report is thus initiated by the

Reporting Officer, it will have to be reviewed by the officer above the

Reviewing Officer.

Writing of CRs by Officers under Suspension:

If the Reporting/Reviewing officer is under suspension, it may be got

written/reviewed by the officer concerned within two months from the date

of his having been placed under suspension or written within one month

from the date of which report was due, which ever is later.



Whether a relative of a Government employee can write the report of

later:

If the close relative of the Reporting who may happen to his subordinate, in

such situation, the employee should abstain from the ACR of the employee

who is his close relative and instead reviewing officer should take on Role

of Reporting officer.

In similar relationship between the Reviewing officer on one hand and the

officer reported upon on the other, the same would apply in respect of the

reviewing officer and the role of the reviewing officer would be transferred

to the authority next higher up.

Writing of CR after Retirement:

When the reporting officer retires, he may allowed to give the report on his

subordinates within one month of his retirement. However, a reviewing

authority can not review the CR after his retirement. Thus while the grace

period of one month is available to the reporting officer, no such period is

prescribed for the reviewing officer.

Guidelines for Reporting:

1. Contents and manner of Reporting

2. Assessment for the period of report only

3. All column to b filled

4. Approved courses of training

5. Column for effectiveness in the development and protection of SCs/STs-

If applicable

6. Grading

7. Fairly goods-Such remarks against punctuality

8. Integrity

9. signature

Guidelines for Reviewing Officer:

1. Period of Report

2. To ensure correct Reporting

3. Reviewing Officer's remarks final



Custody and handling of CRs:

CRs to be in the custody of the designated Officers, an index is kept in each

CR. To ensure safe custody, a Register to be maintained to show the CR

files on hand, their movement etc., Proper handing/Taking over to be

ensured when the officer concerned transferred. (Movement of CRs also to

be kept confidential)

Time Schedule for Preparation of CRs

Nature of action Date by which to be completed

1. Distribution of blank CR forms to

all concerned (To officer to be

reported upon where self

appraisal has to be given and to

Reporting officers where self

appraisal is not to be given)

2. Submission of self appraisal to

Reporting Officer by officer to be

reported upon

3. Submission of Report by

Reporting officer to Reviewing

Officer

4. Where officer reported upon is

himself a Reporting officer for

subordinate under him

Report to be completed by Reviewing

Officer and sent to Administrative or

CR section / cell

31 March. (This may be

completed even a week

earlier)

15th April

7th May

22nd May

23rd May



WORK CULTURE AND ETHICS

Introduction

In this modern world the art of Management has become a part and

parcel of everyday life, be it at home, in the office or factory and in

Government. In all organizations, where a group of human beings assemble for

a common purpose irrespective of caste, creed, and religion, management

principles come into play through the management of resources, finance and

planning, priorities, policies and practice. Management is a systematic way of

carrying out activities in any field of human effort.

Its task is to make people capable of joint performance, to make their

weaknesses irrelevant It creates harmony in working together - equilibrium

in thoughts and actions, goals and achievements, plans and performance,

products and markets. It resolves situations of scarcity, be they in the physical,

technical or human fields, through maximum utilization with the minimum

available processes to achieve the goal. Lack of management causes disorder,

confusion, wastage, delay, destruction and even depression. Managing men,

money and materials in the best possible way, according to circumstances and

environment, is the most important and essential factor for a successful

management.

There is an important distinction between effectiveness and efficiency in

managing.

Effectiveness is doing the right things.

Efficiency is doing things right. The general principles of effective

management can be applied in every field, the differences being more in

application than in principle. The Manager's functions can be summed up as:

Forming a vision Planning the strategy to realize the vision. Cultivating the

art of leadership. Establishing institutional excellence. Building an innovative

organization. Developing human resources. Building teams and teamwork.

Delegation, motivation, and communication. Reviewing performance and

taking corrective steps when called for. Thus, management is a process of

aligning people and getting them committed to work for a common goal to the

maximum social benefit - in search of excellence.



The critical question in all managers' minds is how to be effective in their

job.

The answer to this fundamental question is , which repeatedly proclaims

that "you must try to manage yourself." The reason is that unless a manager

reaches a level of excellence and effectiveness, he or she will be merely a face

in the crowd.

Old truths in a new context

Enlightens us on all managerial techniques leading us towards a

harmonious and blissful state of affairs in place of the conflict, tensions, poor

productivity, absence of motivation and so on, common in most of Indian

enterprises today – and probably in enterprises in many other countries.

The modern (Western) management concepts of vision, leadership,

motivation, excellence in work, achieving goals, giving work meaning,

decision making and planning

There is one major difference. While Western management thought too

often deals with problems at material, external and peripheral levels. But our

old concept, tackles the issues from the grass roots level of human thinking.

Once the basic thinking of man is improved, it will automatically enhance the

quality of his actions and their results.

Motivation

Motivation – self and self-transcendence It has been presumed for many years

that satisfying lower order needs of workers - adequate food, clothing and

shelter, etc. are key factors in motivation. However, it is a common experience

that the dissatisfaction of the clerk and of the Director is identical - only their

scales and composition vary. It should be true that once the lower-order needs

are more than satisfied, the Director should have little problem in optimizing

his contribution to the organization and society. But more often than not, it

does not happen like that. ("The eagle soars high but keeps its eyes firmly fixed

on the dead animal below.") On the contrary, a lowly paid schoolteacher, or a

self-employed artisan, may well demonstrate higher levels of self-actualization

despite poorer satisfaction of their lower-order needs.



This situation is by the theory of self-transcendence propounded. Self-

transcendence involves renouncing egoism, putting others before oneself,

emphasizing team work, dignity, co-operation, harmony and trust – and, indeed

potentially sacrificing lower needs for higher goals, the opposite of Maslow.

"Work must be done with detachment." It is the ego that spoils work and the

ego is the centerpiece of most theories of motivation. We need not merely a

theory of motivation but a theory of inspiration.

The Great Indian poet, Rabindranath Tagore (1861-1941, known as

"Gurudev") says working for love is freedom in action.

"He who shares the wealth generated only after serving the people, through

work done as a sacrifice for them, is freed from all sins. On the contrary those

who earn wealth only for themselves, eat sins that lead to frustration and

failure."

Work Culture

Work culture: An effective work culture is about vigorous and arduous efforts

in pursuit of given or chosen tasks.

work culture - involves fearlessness, purity, self-control, sacrifice,

straightforwardness, self-denial, calmness, absence of fault-finding, absence of

greed, gentleness, modesty, absence of envy and pride. Asuri work culture -

involves egoism, delusion, personal desires, improper performance, work not

oriented towards service. Mere work ethic is not enough. The hardened

criminal exhibits an excellent work ethic. What is needed is a work ethic

conditioned by ethics in work.

The principle of reducing our attachment to personal gains from the work done is for attaining equanimity. It has been held that this principle leads to

lack of incentive for effort, striking at the very root of work ethic. To the

contrary, concentration on the task for its own sake leads to the achievement of

excellence – and indeed to the true mental happiness of the worker. Thus,

while commonplace theories of motivation may be said to lead us to the

bondage or extrinsic rewards, the principle leads us to the intrinsic rewards of

mental, and indeed moral, satisfaction.



Work results the theory of "detachment" from the extrinsic rewards of work in

saying:

If the result of sincere effort is a success, the entire credit should not be

appropriated by the doer alone. If the result of sincere effort is a failure, then

too the entire blame does not accrue to the doer.

Manager's mental health Sound

Mental health is the very goal of any human activity - more so management.

Sound mental health is that state of mind which can maintain a calm, positive

poise, or regain it when unsettled, in the midst of all the external vagaries of

work life and social existence. Internal constancy and peace are the pre-

requisites for a healthy stress-free mind.



LEADERSHIP AND MOTIVATION

LEADERSHIP

INTRODUCTION

In any work situation when two or more people join together or work for a

goal, a structure or a group develops and leadership emerges. The successful

organization has one major attribute that sets it apart from an unsuccessful

organization that is dynamic and effective leadership. For any workgroup to be

successful there is a need for effective leadership. So, there is a continual

search for persons who have the necessary ability to lead effectively.

DEFINITION OF LEADERSHIP

According to George R Terry, “Leadership is the activity of influencing people

to strive willingly for group objectives.”

Robert Tannenbaum, Irving R Wechsler and Fred Massarik defined leadership

as the “interpersonal influence exercised in a situation and directed, through the

communication process, towards the attainment of a specialized goal or goals”.

Thus, leadership is influencing people to follow in the achievement of a

common goal.

Leadership has been studied for decades but what makes a successful leader is

still a baffling question. All of us will agree that leadership is process of

influencing the activities of an individual or a group in efforts towards goal

achievement in a given situation.

From the above discussion it follows that the leadership process is a function of

the leader, the follower and other situational variables.



L = f ( l, f, s )

Where,

L = Leadership process,

L = leader, f = follower and s = situation

TRAIT Vs SITUATIONAL APPROACH

Earlier study on leadership concentrated on leadership traits. It suggested that

there were certain characteristics, such as physical energy or friendliness that

were essential for effective leadership. These inherent personal qualities like

intelligence, etc., felt to be transferable from one situation to another. Since

individuals did not have these qualities, only those who had them would be

considered potential leaders.

Subsequent research has revealed a different thing. As Eugene E Jennings

concluded, “Fifty years of study have failed to produce one personality trait or

set of qualities that can be used to discriminate leaders and non-leaders”.

This is not to say that certain traits may hinder or facilitate leadership, the key

is that no set of traits has been identified that clearly predicts success or failure.

The old assumption that “leadership is born” has been discredited completely.

Of course, it is now recognized that certain traits increase the likely hood that a

leader will be effective, but they do not guarantee effectiveness, and the

relative importance of different traits is dependent upon the nature of the

leadership situation. The focus in the situational approaches to leadership s on

observed behaviour, not on the hypothetical in born or acquired ability or

potential for leadership. The emphasis is on the behaviour of leaders and their

group members (followers) and various situations. It is believed that most

people can increase their effectiveness in leadership roles through education,

training and development. Any form of leadership is no optimal for all

situations. The nature of the situation in which the leader is to function is the

basic criterion for leader behaviour.



HOW LEADERSHIP INFLUENCES BEHIAVIOUR?

Leadership influences the behaviour of the followers for accomplishing a given

objective. There are a number of ways how leadership influences the

behaviour. Four common ways are given below.

i) Emulation: It requires no direct or personal contact of leader with the

followers. Public figures, television or film heroes are some examples whom

people want to imitate and often try to equal or surpass them.

ii) Suggestion: It involves direct interaction. The leader attempts to influence

the behaviour by placing or bringing an idea/ plan/ course of action for

consideration and possible action.

iii) Persuasion: It implies urging, reason or use of some inducement (rewards,

praise etc.) for the purpose of raising the desired response. It involves more

pressure than a mere suggestion, but definitely not coercion.

iv) Coercion: It involves forceful direction, compulsion, physical pressure or

compression.

LEADERSHIP STYLE

The leadership style basically varies on two aspects – concern for task and

concern for relationship. The leadership style is authoritarian when the leader

has concern for task, while the style is democratic when there is concern for

relationship.

It is generally agreed that a leader influences his followers by either two ways:

i) he can tell his followers what to do and how to do it

or

ii) he can share his leadership responsibilities with his followers by

involving them in the process of planning, decision-making and

execution of the task.



The former is the traditional authoritarian style, which emphasizes task

concern. The later is the more non-directive democratic style, which stresses

the concern for human relationships.

The authoritarian style of leader behaviour is often based on the assumption

that the leader derives power from the position he occupies, and that man is

inherently lazy and unreliable (Mc. Gregor’s Theory X), whereas the

democratic style assumed that the leader’s power is granted by the group he is

to lead and that men can be basically self-directed and creative at work if

properly motivated (Mc. Gregor’s Theory Y). As a result, in the authoritarian

style, all policies are open for group discussion and decision.

A third leadership style develops when democratic leader behaviour extends

beyond its boundary. This is known Laissez – Faire style. This style of

behaviour permits the members of the group to do whatever they want to do.

No one attempts to influence anyone else. Practically this style develops no

leadership at all the group.

LEADERSHIP SKILLS

With situational approach the leader is viewed as a product of the time, the

situation. A situational leader should posses the following three skills.

1) FLEXIBILITY 2) DIAGNOSIS 3) CONTRACTING

1) Flexibility means the ability to be flexible to use four different

Leadership Styles

Style 1: Directing - The leader provides specific instructions and closely

Supervises task accomplished.

Style 2: Coaching - The leader continues to direct and closely supervises

Task accomplishment, but also explains decisions, solicits

suggestions and supports progress.

Style 3: Supporting -The leader facilitates and supports subordinates’ efforts



Towards ask accomplishment and shares responsibility

for decision-making with them.

REMEMBER:

THERE IS NOTHING DIFFERENT STORKES

SO UNEQUAL FOR

AS THE EQUAL TREATMENT DIFFERENT FOLKS

UNEQUALS

1) Diagnostic skill means the ability to diagnose an individual’s performance

level and determining the appropriate leadership style suitable for the

individual.

A person’s performance or achievement depends upon two ingredients:

Competence and Commitment

In fact, four combinations of competence and commitment make up four

‘Development levels’.

The four-development level is

High

Competence

+

High

Commitment

High

Competence

+

Variable

Commitment

Some

Competence

+

High

Commitment

Low

Competence

+

High

Commitment

D4 D3 D2 D1

Developed -------------------------------------------------------------Developing

Now, let us see how we can match the leadership style to development level.



(A) Directing style (Style 1) is for people who lack of competence but are

enthusiastic and committed (D 1). The need direction and supervision to

get them started.

(B) Coaching style (Style 2) is for people who have some competence but

lack of commitment (D 2). The need direction and supervision because

they are still relatively inexperienced. They also need support and praise

to build them self-esteem and involvement in decision-making to restore

their commitment.

(C) Supporting style (Style 3) is for people who have competence but lack of

confidence or motivation (D 3). They do not need much direction but

support is necessary to bolster their confidence and motivation.

(D) Delegating style (Style 4) is for people who have both competence and

commitment (D 4). They are able and willing to work on a project by

themselves with little supervision or support.

Each goal should be SMART

S = Smart, M = Measurable, A = Attainable, R = Relevant,

T=Track able

To conclude, we may say that effective leader is one who can change his style

according to the situation, who can communicate with his staff and is able to

reach agreements with them not only about their tasks but also about the

amount of direction and support they will need to accomplish these tasks.



CORE VALUES REQUIREMENTS

FOR

EFFECTIVE LEADERSHIP

1. Integrity provides the foundation of Trust.

2. Character allows integrity to stand on its own.

3. Courage gives the moral strength to do the right thing in a

situation where the outcome is uncertain.

4. Competence is the watchword of master craftsman.

5. Tenacity drives individuals and teams to exercise

determination and persistence.

6. Service leads to customer satisfaction.

7. Loyalty allows you to recognize the importance of

accomplishing mission goals

EMPOWERMENT -------

It is the power that lies within each one of us.

It is the knowledge that we control our own destiny.

It is the believing that I am responsible for the choice I make.

It is not delegation of authority.

It is also not freedom without accompanying responsibility.



“BE A LEADER NOT A BOSS”

THE BOSS DRIVES HIS MEN

THE LEADER INSPIRES THEM

THE BOSS DEPENDS ON AUTHORITY

THE LEADER ON GOOD-WILL

THE BOSS EVOKES FEAR

THE LEADER RADIATES LOVE

THE BOSS SAYS “I”

THE LEADER SAYS “WE”

THE BOSS SAYS WHO IS WRONG

THE LEADER SHOWS WHAT IS WRONG

THE BOSS KNOWS HOW IT IS DONE

THE LEADER SHOWS HOW TO DO

THE BOSS ABUSES MEN

THE LEADER USES THEM

THE BOSS DEMANDS RESPECT

THE LEADER COMMANDS RESPECT

THE BOSS MAKES WORK DRUDGERY

THE LEADER MAKES IT GAY

HOW YOU SAY

WOULD YOU LIKE TO BE A BOSS

OR

A LEADER?



[Reproduced from “Efficiency for Small Manufacturers” by F. A. RYAN]

MOTIVATION

When we try to understand any aspect of human behaviour, our first question is

why? Why do men work? On this aspect, various answers have given by

Economist, Political theorists and Psychologists. They have suggested that men

work because:

They have an instinct to do so

They must earn food and shelter

They seek social approval

They try to avoid scorn of their fellows

We all expect different satisfaction in different proportions from our work. So,

don’t be annoyed when a worker’s attitude seems to say “What is in it for me?”

That is the signal for you to get busy and to find out some way to provide

satisfaction for him on his job. Your solution to winning employee’s

cooperation is to uncover an employee’s personal needs and then try to adjust

his working conditions so as to satisfy these needs at work. So, a study of his

motives is very much essential to understand his problem and to help him for

it’s solved.

Motivation is a broad term used in psychology to cover internal condition that

activate or energize the individual and that lead to goal directed behaviour.

Motivation in other wards can be defined as psychological energy directed

towards goals.

As a manager, our specified objectives are to achieve organizational goals

through the people, we manage, and then motivating is an important function

of our role as a manager or a team leader. In that sense, motivating is securing

commitment and willing performance from people in the direction of the

organizational goal.



An employee will strive to achieve organizational goals only, if he sees in

some way satisfaction or fulfillment of his own needs. As a result,

organizational objectives will be fulfilling through the process of behaviour or

performance of the employee.

Therefore, Manager’s role in motivating is an interesting job. Then, what is the

manager’s role in the process of motivation at the individual’s work place.

Broadly speaking a manager’s role in motivation is two fold.

1) To know and understand the needs and drives of those he manages, and

2) To provide the right environment or incentive to his managers so that the

resultant behaviour corresponds to high performance towards

achievement of the organizational goals.

A salient feature of the management task is as under:

1. Nature of Work

2. Condition of Work

3. Motivation of Work

Nature of Work : Physical labor is a curse imposed on men as a

Punishment for his sins

Condition of Work : Improving the condition of the job will cause the

worker’s natural dislike of it to be somewhat

mitigated.

Motivation of Work: Main positive incentive is money. Main negative

incentive is unemployment.

McGregor has termed it as theory ‘X’. It assumes that:

1. The average man is by nature indolent – he works as little as possible.

2. He lacks ambition, dislikes responsibilities

3. He is inherently self-centered, indifferent to organizational needs

4. He is by nature resistant to change.

In accomplishing its task with these assumptions as guides management has

conceived of a range of possibilities.



At one extreme management can be “hard” or “strong”. The methods for

directing behaviour involve coercion and threat close supervision, tight

controls over behaviour. At the other, extreme management can be “soft” or

“weak”. The methods for directing behaviour involve being permissive,

satisfying people’s demands for achieving harmony.

This range has been fairly completely explored during the past half century and

management has learned some things from the exploration. There are

difficulties in the “hard” approach. There are also difficulties in the “soft”

approach. People take advantage of the soft approach. They expect

continuously more and more but they give less and less to their organization.

Presently, the most popular theme on these managerial aspects is “firm but

fair”. This is an attempt to gain the advantages for both the hard and also the

soft approaches.

The findings, which are beginning to emerge from the social sciences challenge

this whole set of, believe about man and human nature and about the task of

management. The evidence is far from conclusive certainly but it is suggestive.

This approach of theory ‘X’ is based on mistaken notions of what cause is and

what is effect. Perhaps the best way to indicate why the conventional approach

of management is inadequate is to consider the subject of motivation. Abraham

Maslow proved that human needs operate in a kind of hierarchy. Such as, a

higher order need gets activated normally only when the lower order needs are

reasonably taken care of. Both the needs are as follow:

LOWER ORDER NEEDS

Self-actualization needs

Esteem (Ego) needs

Social (Belonging) needs

Safety & Security needs

Physiological needs

Man is a wanting animal. As soon as one of his needs is satisfied, another

will appear in its place. This process is unending. It continues from birth to

death.



The man whose lower level needs are satisfied is not motivated to satisfy

those needs any longer. For practical purposes they exist no longer.

Management often asks “Why are not people more productive?” When

management pay good wages, provide good working conditions, pay

excellent fringe benefits and steady employment yet people do not seem to

be willing to put more than minimum effort.

Gradually, a new theory has come with the basis of certain assumptions.

This is a process of creating opportunities, realizing potentials, removing

obstacles, encouraging growth and providing guidance. Peter Drucker has

called it as “Management by Objectives”. The application of the theory is

always slow. Progress is usually achieved in small quantum. Some

innovative ideas, which are entirely consistent with the theory, are today

being applied with some success. The applications are as under:

1. Decentralization and Delegation.

2. Job Enlargement.

3. Participation and Consultative Management.

4. Self-Performance Appraisal.

5. Belief in oneself and in other people.

6. Setting a good example.

7. Placement of employees in proper jobs.

8. Keeping employees informed.

9. Giving adequate incentive and rewards.

10. Recognizing achievements of subordinates.

11. Developing team spirit.

12. Giving information about the job itself.

13. Providing an opportunity for job security.

14. Employing fear judiciously.

De-motivators:

We have already discussed the important motivators but it would also be useful

to remember some of de-motivators.

These are:



1. Lack of clear objectives.

2. Loose discipline.

3. Abdication of leadership.

4. Inadequate Contract.

5. Difference between words & deeds

6. Environmental factors.

7. Credibility gap.

There is no doubt that man is the most important resource for a manager.

However, how this resource is to be employed optimally depends on our

understanding of man and how he can be motivated to achieve good results

for the organization. Whatever we have discuss so far is a outline of a

practical approach and this approach is based on the need for a genuine

concern for the man and the use of higher order motivators which could be

used effectively along with a degree of sensitivity.



Role duties, responsibilities and powers of SO (A)/AAOs

The SO (A)/AAOs of a section is responsible to the ACDA-in-Charge/Senior

Accounts Officer/Accounts Officer, for the efficient management of his

section, for keeping the work current and for ensuring that the efficiency of the

work is maintained at the highest level. His main duties are briefly as follows:

1. He must have a thorough knowledge of all branches of the work with which

his section deals and must ensure that the procedure laid down for the disposal

of all such work is followed.

2. Under the orders of the ACDA-in-Charge/Senior Accounts Officer/Accounts

Officer, he must distribute work so as to secure the maximum output in the

minimum of time. He must know precisely from day to day.

(a) the number of letters unanswered and why;

(b) the number of accounts, bills and vouchers un-audited and why;

(c) the number of accounts, returns and statements overdue from his

section and the reasons why;

(d) the number of accounts, returns and statements due to the section

but not received. He should promptly bring to the notice of the

ACDA-in-Charge/Senior Accounts Officer/Accounts Officer all

cases in which delay or accumulation is anticipated:

3. He must scrutinize carefully all replies to correspondence, statements and

returns prepared by his section which are required to be issued under the

signature of the ACDA-in-Charge/Senior Accounts Officer/Accounts Officer.

The objects of this scrutiny is to ensure

(a) In the case of draft replies

(1) that the reply is correct;

(2) that it deals with all the points raised;

(3) that it is couched in clear and intelligible terms;

(4) that due dates for issue of reminders are clearly and prominently

noted on all office copies of documents on which further action is

necessary.

(b) In the case of statements, returns, etc. that the statistics or information given

are accurate in respect of the period which they cover.



4. In dealing with correspondence he must take care to see that it is not

protracted. Every letter written must be with the object of reaching finality and

he should on no account pass drafts which are of a temporizing nature and are

likely to prolong the settlement of the point at issue. He will see that when a

case is submitted to or through his ACDA-in-Charge/Senior Accounts

Officer/Accounts Officer reference is made to all relevant rules and up-to-date

corrections thereto.

5. In the case of returns, statement accounts, letters, replies to objections, etc.,

due to the section, the periodic issue of reminders must not be considered by

him as a discharge of the responsibilities of his section. Unless good and

definite reasons are known to the cause of delay, he should ordinarily after the

issue of the first reminder which brings no response, bring the matter to the

notice of the ACDA-in-Charge/Senior Accounts Officer/Accounts Officer for

special action. This is particularly essential in the case of outstanding demands

accounts and replies to objections.

6. In regard to the supervision of audit of accounts carried out by his section,

he is not expected to go over the entire ground covered by auditors. It will be

sufficient for him to institute test checks on their audit. These test checks

should be designed so as to satisfy himself that the audit has been properly

done. But if on applying a test check to an account he finds that it has not been

correctly audited. It might be necessary for him to increase the scope of his test

check on that particular account. If such a test check brings out evidence of

careless work or other unsatisfactory features, it is his duty to arrange, under

the orders of the ACDA-in-Charge/Senior Accounts Officer/ Accounts Officer,

for the audit to be done over again and done properly, and at the same time, to

take steps to prevent a recurrence of incorrect or unsatisfactory audit. The

disciplinary aspect of the case will also be brought to the notice of the ACDA-

in-Charge/Senior Accounts Officer/Accounts Officer where required.

7. With regard to bills, the duty of checking arithmetical calculations, rates etc.,

is primarily that of the auditing staff. The Assistant Accounts Officers/Section

Officers (Accounts) should check arithmetical calculations in 5% of the

documents disposed of by him in a day, if there is enough load, otherwise, in a

week, irrespective of the amount involved in the documents. The Assistant

Accounts Officers/Section Officers (Accounts) should make suitable en-

facement on the document or documents so checked. Maintenance of separate



record of the checking done by the Assistant Accounts Officer/Section Officer

(Accounts) is not necessary. With regard to the rates etc., the Assistant

Accounts Officer/Section Officer (Accounts) should institute a periodical Test

Check. For the rest, his duty in checking bills will be to see, inter-alia, that the

charge is authorised, that it is accompanied by the necessary certificates, etc.

and that all conditions connected with the charge have been fulfilled and that it

purports to be correctly signed by the proper 'authority, where necessary.

The following checks will be exercised by Assistant Accounts Officer/Section

Officer (Accounts) for ensuring audit verification of the specimen signature of

claimants before payment of bills. In all the cases where verification is done it

will be so indicated on the vouchers.

SI.

No Nature of the claims Percentage of check

(i)

Verification of specimen

signature of claimants and

sanctioning authorities before

payment of personal claims

received from gazetted officers.

100% in respect of claims over

Rs.1000.

(ii)

Verification of specimen

signature of the officers

preferring the claims in respect

of local purchase bills.

5% in respect of claims below

Rs.25, 000.

100% in respect of claims for

Rs.25.000 and above.

.

Assistant Accounts Officer/Section Officer (Accounts) will also ensure

that the Auditors exercise 100% check of specimen signature in respect of all

claims and sanctions, and that the endorsement of verification of specimen

signature is so indicated on the bills/sanctions.

Note: The extent of check of arithmetical calculations by the Assistant

Accounts Officers/Section Officers (Accounts) prescribed above, will apply in

the case of all documents requiring action in accounting, and audit.



8. Objection statements on accounts or bills must be carefully scrutinised by

him to see that they are valid and clearly set out and also that the objections are

not raised piece-meal. If the passing of a bill or an account is dependent on

some action to be taken or condition to be fulfilled by the authorities

concerned, the action required or the conditions to be satisfied are to be clearly

and unmistakably defined.

9. He must review carefully all registers which the section is responsible for

maintaining and must see that they are written up to-date neatly and in their

correct form and that they are submitted to the ACDA-in-Charge/Senior

Accounts Officer/Accounts Officer for inspection on the due dates. He is

responsible for the safe custody of valuable registers like Demand Registers,

Register of Payment to Local Purchase Contractors, Audit Progress Registers

etc.

10. He must constantly review all outstanding demands and objections and

bring to the notice of the ACDA-in-Charge/Senior Accounts Officer/Accounts

Officer all cases in which outside authorities are responsible for undue delay in

their settlement.

11. He must see that the duties of writing up section note books are suitably

distributed to certain assistants in the section, that such distribution is left

clearly as a continuous record and that a proper handing over of these duties is

carried out at every change among the assistants performing them. He should

see that no congestion occurs in the transmission of batches of orders of

decisions requiring note. He must examine the section note books at frequent

intervals to see that they are kept up-to-date and watch that the notes are

extracted neatly and intelligently and that the indexing is done in the best

possible way to facilitate easy reference.

12. He should see that the duties of correcting regulations and pamphlets of

instructions or other publications affecting the work of the section are duly

distributed to assistants, that the distribution has been placed on record so that

no evasion of responsibility is possible at any time, and that such duties are

formally handed over when any change in assistants takes place. He should

frequently examine these books of publications to see that they are being kept



up-to-date and that the initials of the assistants responsible are entered up in the

fly leaf appended as a register of corrections.

13. The maintenance of section files and current records in an orderly manner

should always receive his closest attention. He should occasionally examine

the files to see that they are properly linked and cross-linked in the prescribed

manner.

14. A section cannot do its work efficiently unless there is a high standard of

conduct and discipline among its personnel. The Assistant Accounts

Officer/Section Officer (Accounts) is in closest touch with the members of his

section. He knows or ought to know the character and temperament of each

individual intimately, and for this reason the measure of his responsibility for

maintaining discipline, regularity in attendance, punctuality and for ensuring

the prompt despatch of work is great. He is expected to be courteous and firm

with his men and should give them all the assistance and guidance they require.



DELEGATION OF POWERS TO SECTION OFFICERS (ACCOUNTS)

OF THE DEFENCE ACCOUNTS DEPARTMENT

The following powers are vested in the Section Officers (Accounts) of

the Defence Accounts Department

(i) Powers to grant casual leave up to two days to Class III and Class

IV staff working under them (except, restricted holidays.)

(ii) Issue of leave admissibility reports, except in the case of

LPR/Terminal leave, in their capacity as Section Officer

(Accounts) maintaining the leave accounts.

(iii) Writing of Confidential Reports/assessment reports of Class III

and Class IV staff serving under them.

(iv) Issue of orders regarding destruction of time expired records other

than Confidential Reports and service documents. (This will,

however, be subject to the overriding provisions in the relevant

office Manual, other connected orders etc)

(v) Classification of Punching Media up to Rs.10, 000/-.

(vi) Powers to deal with cases relating to admission to Provident Fund,

allotment of Account Nos. and furnishing of Annual Statement of

Accounts.

(vii) Waiver of Audit objections of the value of Rs.50 and below and

write off of irrecoverable amounts due to any cause of the value of

Rs.25.

(viii) Routine correspondence



MONITORING AND CONTROL MECHANISM

ACTION PLAN AND MONITORING

Formulation.- In order that the programmes and projects undertaken by a

department are implemented in a systematic manner, each department will

formulate an annual action plan in the month of January. The action plan will

reflect the manner and time-frame of action with month wise break-up of

targets to be achieved in respect of each of the activities to be performed during

the ensuing financial year.

Accountability.- The action plan will identify the levels of accountability,

both direct and supervisory, for implementation of each action point.

Achievement of action plan targets will form an important element of

performance appraisal of each employee.

Finalisation. The department will send by 31st January two copies of the

action plan to Cabinet Secretariat and one copy each to Prime Minister's

Office, Planning Commission and Ministry of Programmed Implementation.

The plan will be discussed and finalised at meetings to be held for this purpose

in the month of February.

Review.-Each officer will review the progress made against action points

pertaining to his charge every week and take appropriate steps for effective and

timely implementation of the tasks assigned. Secretary of the department will

review the performance of the department as a whole in respect of the action

plan items in a monthly meeting with senior officers.

Monitoring.- Monthly performance report on the items of action plan

indicating details of targeted and actual performance with comments on

variance, if any, will be sent by the department to Prime Minister's Office,

Cabinet Secretariat and Ministry of Programmed Implementation. In addition,

a quarterly report on the progress achieved in key items and indicators

identified by the Prime Minister's Office for special monitoring will be sent to

that office.



MECHANISM

USE OF MECHANICAL AIDS

Purpose of mechanisation.-Use of mechanical aids in the disposal of business

in Government departments is intended to facilitate faster processing of

information, more accurate analysis of facts and figures, higher efficiency and

productivity, and elimination of fatigue arising from performing repetitive jobs

manually.

Areas amenable to mechanisation.-The following areas of office work are

suitable for mechanisation:

(a) storage and retrieval of information;

(b) processing of information;

(c) document creation and duplication; and

(d) Communication.

Computer.-A computer may be used for storing, retrieving and processing of

large quantities of information of all types in a fast and accurate manner. It

facilitates quick updating of information.

(2) Computers can be broadly classified into three categories, viz.,

mainframes, minicomputers and micro or personal computers. The most

appropriate computing system for a department will be decided in consultation

with the National Informatics Centre of the Department of Electronics.

Word processor.--(1) A word processor is a microcomputer which can be used

for storing, altering and rearranging in any desired manner pages of text in

large numbers. The output from a word processor is of high quality and is

useful in offices which have substantial report writing work involving repeated

editing.

(2) A micro or personal computer (PC) can also be made to serve word

processing functions with the help of an appropriate software package.

Electronic typewriter.-An electronic typewriter can perform all the functions

that a word processor is capable of subject to display and memory limitations.

It is suitable for offices, where typing load is high.



Photocopier- (1) A photocopier produces copies of any document on

plain paper faster than cyclostyling. It may be used in offices where copying

load is high.

(2) As photocopying is relatively expensive, it is advisable to use the

facility only when the number of copies needed does not exceed fifteen.

Dictaphone.-This is a compact machine which enables an officer to record

dictation at his convenience without having to wait for his stenographer. The

cassette containing the dictated message can be handed over later to the

stenographer who will type the matter straightaway without taking it down in

long or shorthand first.

Microfilming of records.-A microfilm is a largely reduced photographic

image of a document which can be magnified to any desired degree in order to

be read or printed. It is amenable to computer aided retrieval systems.

Microfilming of records can bring about nearly 98 per cent savings in the space

occupied by original records, besides assuring their longevity. It may be used

in offices where a large number of records are required to be maintained

permanently.

Internal Communication aids.-Electronic Private Automatic Exchange

(EPAX) provides fast and efficient internal communication facility and helps in

reducing the frequent movement of persons and files within the office.

Miscellaneous paper handling equipment.-Paper collators, cutting and

stitching machines, binding machines and document shredders are some of the

devices which save time and labour involved in activities such as set-making,

stitching of files and reports and weeding out of unwanted records.



AUDIT OF PERSONAL CLAIMS

PERSONAL CLAIMS

1. The types of personal claims are:

Reimbursement of tuition fees, C.E.A. claims, Reimbursement of

medical claims, TA/DA, LTC, Temporary advance and withdrawal from G.P

Fund.

Reimbursement of tuition fees - is applicable to all Govt. employees

irrespective of the pay limit. The assistance is admissible only if the child

(children) studies (study) in a recognised school. If husband and wife are

Central Govt. employees, the assistance will be admissible to one of them only.

The age-limit of the child should be between 5 to 20 years. Assistance is not

admissible for the child if studying more than 2 years in the same class; it is

admissible for a child who is receipt of scholarship. If the Govt. employee

ceases to be in service due to any reason, assistance will be admissible till the

end of the academic year in which the event takes place.

C.E.A - is admissible to a Govt. employee @Rs.50/- per month per child for

primary, secondary and higher secondary classes when he is compelled to keep

his child to a station other than his duty station and subject to the condition that

there is no school of requisite standard.

Re-imbursement of Medical Claims-

Reimbursement of medical claim is admissible when a Central Govt.

employee falls ill beyond the CGHS area and gets the treatment from the

A.M.A. This is also admissible if the treatment is from any Govt. hospital and

referred by the AMA of the Area where the patient falls ill.

Medical advance is also admissible for in-patient treatment in a

recognised hospital.

TA/DA - is admissible for (i) Permanent transfer and (ii) Temporary duty

outside the HQrs station.



When a Central Govt. employee is transferred to other station at public

interest, he is entitled to get apart from TA and Daily allowance, the road

mileage, lump sum transfer grant, packing allowance, entitled amount for

transporting the personal effects.

TA/DA on tour - is admissible when a Central Govt. employee is detailed in

public interest to any place of duty. TA is entitled to him as per gradation of

the employee as in TA Rules, He is also entitled to DA for halt at the outstation

at the entitled rate as applicable for the city', In addition he is entitled to

journey DO Road mileage to and fro is also admissible.

L.T.C - A Central Govt. employee is entitled to Home Town LTC once in

every year or once in a block of two years as the case may be. In this case he

has to touch his Home as declared and notified in his Service Book.

He is also entitled to LTC for anywhere in India once in a block of four

years provided he surrenders one Home Town LTC block of two years.

Temporary advance and withdrawal from GP Fund - Govt. employee may

take advance from his GP Fund accumulation in connection with certain

happenings. This is admissible 50% of the accumulation and repayable in

maximum of 36 installments.

Withdrawal from GP Fund can be done if he has completed 20 years of

service subject to a maximum of 3/4th accumulation.

Withdrawal can also be made after completion of 15 years of service in

connection with purchase of land for construction of a house and / or for

meeting expenditure towards construction of his house.

H.R.A - is admissible when a Central Govt. employee resides in a rented house

and also for a Govt. employee who resides in his own house but incurring some

expenditure towards up-keep and maintenance of his house. This is admissible

according to the rate of city of his duty.

C.C.A - A Central Govt. employee is entitled to CCA at the prevailing rate of

the city of duty.



O.T.A - is admissible to the` non-gazetted employees for the work to be

completed in public interest within a certain period. This is admissible at

entitled rates over and above the normal time of work.

Advance for purchase of Bi-cycle - Non-gazetted Govt. servants whose Basic

Pay plus DP plus stagnation increment does not exceed Rs.7500/- pm. are

eligible. Amount of advance is Rs.1500/- or the anticipated price including

sales tax whichever is less.

Table Fan advance – Group 'D' employee living in a house provided with

electricity and a plug point, and not having a fan in the house. Anticipated

price, limited to Rs.1000/- is less is given as advance.

Festival advance - Non-gazetted employee whose basic pay plus DP plus

stagnation increment does not exceed Rs.12, 450/- p.m. is entitled to festival

advance for a sum of Rs.1, 500/-.

PAY AND ALLOWANCES – ENTITLEMENTS & ORDERS

To sum up the writing on entitlement of pay and allowances, it may be

stated that the section Officers (Accounts) being on supervisory duty, have to

pay vital role to scrutinize the entitlement of pay and allowances and

compulsory as well as terminal/ casual recovery of demands against any

particular employee with reference to the demands noted in the Demand

Register (s) and Rules/ Orders on the subject.

The Section Officer (Accounts) should scrutinize to see that: -

(1) The Pay and allowances in respect of the employees have been

drawn as per sanctioned strength.

(2) The categories of the employees for whom Pay and allowances are

drawn are authorised.

(3) The last charge has been linked and remarks to that effect have been

recorded in the next/ current charge and the last charge has also accordingly

been remarked.



(4) In case of new name(s) is/ are found in the current/ next charge, the

relevant Part II Office Order/ D O II/ F O II has been linked.

(5) In case of "Transfer in" - entitlement through Last Pay Certificate has

been verified.

(6) In case of "Transfer Out" - His name has been deleted from Pay Roll

with proper authority.

(7) Basic. Pay for each individual/ employee has been drawn correctly

with reference to the appropriate scale of pay.

(8) Increment has been drawn in time and relevant Periodical Increment

Certificate has been enclosed with the Pay Roll.

(9) In case of increase of pay due to fixation/ re-fixation of Pay, relevant

Part II Office Order has been consulted and remarks to that effect have been

recorded on the Pay Roll against the affected employee.

(10) Leave Part IT Orders have been consulted while drawing Pay.

(11) In case of Suspension - The affected employee's pay bill has been

drawn separately.

(12) In case of retiring employees - Pay Bills are to be drawn separately

and not with other Regular Employees for the last 3 (Three) months.

(13) Dearness Allowances has to calculate with reference to the

percentage declared by the Govt.

(14) House Rent Allowance and City Compensatory Allowance are to be

drawn as per city rate.

(15) Further, while drawing H R A, it is to be seen as to whether he

occupies Govt. accommodation or not. If occupies Govt. accommodation, he is

not entitled to House Rent Allowance.



(16) Non practicing allowance (NPA) - Entitlement as per rule on the

subject.

(17) Special Compensatory Allowance, Remote Locality allowance,

Risk allowance - Drawn at the rate applicable for the areas and entitlement as

per Govt. Orders.

(18) Stagnation Increment: If any employee stagnates for more than 2

years at the maximum of the scale, he is entitled to one stagnation increment

for each of 2 years of stagnation but not more than 3 stagnation increments.

Periodical Increment Certificate for stagnation increment has been prepared in

the normal manner like normal increment.

(19) Any other entitlement, if sanctioned, has to be scrutinised with

reference to the relevant authority.

(20) Then the Gross entitlement has been arrived at.

DEDUCTIONS / RECOVERIES

(1) Compulsory recoveries, like, General Provident Fund, Group

Insurance, Professional Tax etc. have been recovered correctly.

(2) Any other demand with reference to Demand Register has been

recovered.

(3) Total deduction / recovery have then been arrived at and Net Payable

amount struck.

All the columns of the Pay Bills have been totaled and cross tallied.

Pass order has been given with reference to the Summary Total.

Punching Medium has been prepared correctly and Cheque Slip where

necessary has been prepared correctly.



Scrutiny of Supply order and payment of bills

Payment of Contractor's Bills for Local Purchase of Stores

To guard against double payments, full particulars of all payments made to

contractors such as the number and date of supply orders, local purchase

vouchers, etc, and the name and station of the unit/formation to which the

articles have been supplied, etc. should be noted in the 'register of payments to

local purchase contractors' (i.e. Income tax register). Before a contractor's bill

is passed for payment, all supply orders, local purchase vouchers, etc.

supporting the bill, even though they may be marked as 'original' should be

verified with the entries in the above register to ensure that a previous payment

therefore has not been made.

This verification by the auditor should be test checked by another auditor to the

extent of cent percent. They will also endorse a certificate to this effect on the

bill, which will be looked for by the SO (A)/AAO/officer before passing the

bill finally for payment. The verification made by the auditors will be subjected

to a test check by the SO (A)/AAO/officer and suitable steps taken to prevent

recurrence of any errors or omissions that may come to notice during the test

check.

All the vouchers for which payment is authorised will be prominently enfaced

‘cancelled’. The local purchase bills with supporting documents, will after

payment, be transmitted to test audit staff and on return from them will be, sent

to the Local Audit Officer concerned for verifying credit for the stores in the

consignees' books.

The detailed procedure to be followed for the cancellation of vouchers, their

scheduling to the Local Audit Officers and final recording is laid down in Para

516 of Office Manual Part II vol. I as amended from time to time.

In the Ordnance and Clothing Factories the local purchase bills, after payment

by Accounts Officers attached to Factories; will be recorded in their offices and

will be produced, when called for, to the Test Audit staff during their

periodical visits for audit.



In the case of a bill preferred by Army Supply Corps, contractor or other

supplier, no payment shall be made except when supported by the original

supply order. The contractor who loses his copy shall prefer a claim on the

C.D.A., who will subject the bill to the usual audit acting on the following

certificates and the unit's copy:

(1) a certificate from the unit/formation concerned for the supply

made, and

(2) a certificate signed by the contractor to the effect that payment

has not been obtained by him previously and that he shall not

again prefer a claim if the lost voucher is subsequently recovered.

In such cases verification of credit of stores is also necessary by the Local

Audit Officer concerned before payment is made.

In cases where payment is made first by the executive and au it comes later,

i.e. in the case of post-audit, verification of credits in consignees' books, before

the final post-audit enfacement.

Hired Land Transport

Audit of Bills

When Government transport is not available to meet demands or where

Government transport cannot be used due to mileage or P.O.L. restrictions

Local Station/Formation Commander will place demands for transport within

the terms of the contract on the hired transport contractor. If no hired transport

contract exists, Local Station/Formation Commander will hire it locally with

the prior sanction of the competent financial authority.

316. When transport is hired through contract, bills of transport contractors for

carriage of stores should be preferred on IAFA-68 through the Local

Station/Formation Commander concerned. It should be seen in audit that:

(1) the bills of contractors and agents have been prepared and signed

in ink by the person making the claim and s b-~ muted in original; duly

supported by the original transport indents (IAFZ2150) : .



(2) the various parts of the supporting indents have beef properly

completed by the appropriate authorities;

(3) the indents relating to services rendered under each contractors

are numbered serially and separately (the serial to run for the period of the

currency o the contract);

(4) the bill is supported by a certificate

(5) the bill is a complete claim for all the services rendered during the

month to which it pertains and in case it is not possible to include any indents

pertaining to that period in the bill, the number of such indents is noted on the

bill and brief reasons given for their exclusion;

(6) the number and date of receipt and issue vouchers under which the

stores were received/despatched have been noted by the units/formations using

hired transport, in Part III of the transport indents;

(7) charges for the hire of transport are only claimed for the transport

actually supplied-as indicated in art of the indent by the indenting officer or his

representative; and

(8) the charges claimed are in accordance with the rates and conditions

specified in the contract agreement on record.

Bills of transport contractors for carriage of passengers are required to be

preferred by the contractors on IAFA-68 through the Local Station/Formation

Commander concerned. It should be seen in audit that:

(1) the bills are supported by road warrants;

(2) the warrants have been issued by the competent authority;

(3) the individuals to whom warrants have been issued are entitled to

travel on them and the warrants have been signed by the officers and other or

by Officers-in-Charge of Parties, in token of the accommodation having been

provided

(4) the number of seats and the class of accommodation asked for and

provided by the contractor is separately shown in the columns provided in the

road warrants; and

(5) the charges claimed are in accordance with the rates and conditions

specified in the contract agreement on record.

In cases when transport is hired locally, the bills should be supported by the

sanction of the competent financial authority and the certificate of Local

Station/Formation Commander regarding the reasonableness of the rates

charged.



Statutory audit LTAR, Draft Para, Audit Para

Nature of Audit

The accounts and financial transactions of the Defence Services are under the

control of the Defence Accounts Department. A statutory audit of these

accounts is conducted by the Directors of Audit, Defence Services, Air Force

and Navy and Ordnance Factories on behalf of the Comptroller and Auditor-

General of India in order to enable the Comptroller and Auditor General to

discharge his statutory responsibilities under the Constitution in regard to the

audit of the Defence Services expenditure.

The statutory audit is a test audit, it is conducted by the Directors of Audit,

Defence Services, Air Force and Navy and Ordnance Factories who are

assisted by Joint and Deputy Directors. These Directors of Audit, audit all

sanctions of the Ministry of Defence and the Ministry of Defence (Finance),

scrutinize all Codes and Regulations issued for the use and guidance of the

Defence Accounts Department, and prepare annually a Report on the Defence

Services, in which observations of the Statutory Audit on the Appropriation

Accounts prepared by the Financial Adviser (Defence Services) is also

included. The audit in the commands is conducted continuously and it is seen

that the accounts of the Defence Services, as included in the Combined Finance

and Revenue Accounts, are a correct presentation of facts, and that they

represent money that has really been spent in the manner in which it is shown

to have been spent.

Central Audit and Local Audit

The test audit may be broadly divided into (i) Central Audit and (ii) Local

Audit.

In the office of each Controller of Defence Accounts, the audit staff of the

office of the Joint/Deputy Directors of Audit tests the work done by the office

of the Controller. The detailed procedure for the audit of each section has two

stages



The first stage is the audit of vouchers against rules and orders. These require

special study; and the audit staff has, therefore, to know the various Pay and

Allowances, Pension, Travel and Financial Regulations of the Army/ Navy/Air

Force, Defence Account and Audit Rules, the various Regulations, Act and

Instructions that govern military service and discipline in the armed forces.

The second stage consists of: -

(i) the test check of classification of vouchers relating to each section,

(ii) the verification of posting of vouchers into the detailed compilations,

(iii) the check of the posting of totals of detailed heads into the sectional

compilations, and

(iv) a test check for verification that the punching media are correctly

posted in the compilation. It is also verified that the checks prescribed to

ensure the correctness of the accounts compiled mechanically are

adequate and are actually carried out.

The duty which falls to the test audit staff when conducting audit locally is to

visit Military Engineer Service formations, Ordnance Depots, Supply Depots,

Remound Depots, E.M.E. Workshops, Military Farms, Hospitals, Ordnance

Factories and other formations and similar formations on the Air Force/Navy

sides and to test check those of their original accounts records which are not

submitted to the Defence Accounts Officer concerned but are checked locally

by a staff deputed by him for the purpose. This work resembles that done by

the local inspection staff of a civil Accountant-General as described in Chapter

18 with this difference that the staff members of the Defence Audit Offices not

only review the work of the units and formations themselves, but also conduct

a test check of the audit already conducted by the Defence Accounts

Department.

Draft Paragraphs

The draft paragraphs proposed for inclusion in the Report of Comptroller and

Auditor General of India are sent by the Director/Jt./Deputy/Assistant Director,

AO Defence Services to the Controller concerned for verification of facts. The

Controller should return the draft Para within six weeks of its receipt as far as

possible. On receipt of the remarks of the Controller, the former will amend the

draft paragraph, if necessary; and send it to the DGADS for further action.



After the Director General of Audit Defence Services has accepted the draft

paragraph, he will send three copies thereof (six copies in case of paragraphs

pertaining to the Department of Defence Production) to the Ministry of

Defence and one copy of the draft paragraph to the branch concern of the

Services Headquarters for advance information and to enable the branch

concerned to collect material to ensure quick examination and disposal of the

draft paragraph. The Ministry of Defence will, before according their final

concurrence, refer the file to the branch concerned who will, after recording its

remarks, return the file to that Ministry through the D.F.A. concerned. The

CGDA will also be consulted in cases involving accounts matters of Defence

Accounts Department. The DGADS will be informed of the acceptance of the

Para by Ministry of Defence through a self contained note and the file passed

to DFA (B) for record.

Controllers will invariably bring to the notice of the local administrative

authorities and discuss with them all draft pares proposed by the audit

authorities. A copy of each of the draft Paras as finally concurred in by the

Controller will also be furnished to the administrative authorities concerned.

As the draft paragraphs, by inclusion in the report of the Comptroller and

Auditor General of India, Union Government (Defence Services), will

ultimately come before the Public Accounts Committee, they should receive in

Controllers' Office the most careful attention at the highest level possible. The

draft paragraphs received from the local representative of the DGADS will

invariably be brought to the notice of the Command Headquarter

simultaneously endorsing a copy thereof to the local administrative authorities

concerned. The lower formation will however, furnish their replies/necessary

details to Command Headquarters/LAO, concerned who in turn will forward

the same to CsDA with their comments. Controllers may allow the Command

Headquarters a period of 30 days for furnishing the final replies thereto. In

important cases, the matter should be discussed by the Controller with the

administrative authorities before the draft paragraphs are concurred in.

Normally no draft pare should be concurred in without the personal knowledge

of the Controller.

In order to ensure that the office of the CGDA gets all the necessary

information in time and is fully posted with complete details of the case to deal

with the draft Paras when subsequently referred to him, the Controllers should



endorse to the CGDA a copy of each draft Para after it has been concurred in

by them and returned to the DA/Jt. DA/DDA/ADA/AODS concerned. The

advance copy of the draft Para should be accompanied by a brief and self

contained explanatory note on the circumstances of the case indicating, inter

alia: -

(a) Whether the irregularity was discovered in internal audit or by the

test audit staff. If not detected by the Defence Ac4punts Department,

brief reasons therefore should be furnished:

(b) If the items was discovered in internal audit, whether it was reported

to the administrative authorities, and if so, with what result and

(c) Whether the draft paragraphs were brought to the notice of the

administrative authorities; where the draft paras were discussed with those

authorities a gist of the discussion should be supplied.

The Controllers should examine the draft Paras with a view to ascertaining

whether any failure to detect the irregularity or to take proper and prompt

action after detection, can be attributed to the DAD. The Controller’s opinion

on this point should be expressed in the explanatory note to the CGDA.

Information regarding the period to which the irregularity pertains, when it was

detected in internal audit, when it was- reported to the higher authorities and

the result of this reference, the extent and nature of failure on the part of the

executive, details of disciplinary and remedial measures taken, if any etc.,

which will be helpful in assessing the extent to which the Defence Accounts

Department could be held responsible for failure, should invariably be

furnished to the CGDA in the explanatory note. In cases where failure can be

attributed to the Defence Accounts Department, the Controllers should indicate

clearly the responsibility of the individuals concerned and the disciplinary

action taken or proposed to be taken against them.

After taking into consideration the facts communicated by Controller and other

factors known to him, the CGDA will suitably endorse the file containing the

draft paragraphs proposed by the DGADS for inclusion in the report of the

Comptroller and Auditor General of India. Union Government (Defence

Services) when such cases are referred to him.



GENERAL INSTRUCTIONS IN RESPECT OF HANDLING OF

COURT CASES

Procedure in accepting the Notices/Documents issued by the Registry the

Central Administrative Tribunal has brought to the notice of the Department of

Personnel and Training that the Ministries/Departments while receiving

Notices/Documents from the Tribunal are not giving details of the receipt

obtained by them. It is hereby requested that the name and designation of the

officer receiving the Notices/Documents along with office stamp, date of

receipt and time of receipt may be indicated on the acknowledgement slips

before these are returned to the Central Administrative Tribunal.

[Dept, of Per. & Trg., OM No.A-11019/21 /88-AT Dated the -August, 1988]

Correspondence can be had only with the Counsel for defense and not directly

with the Chairman or Registry It has come to the notice of the Government that

Officers of the Central Government are writing letters to the Chairman and the

Registry of the Central Administrative Tribunal in connection with the cases

pending in the Tribunal. It is hereby clarified that such direct correspondence

with the Chairman or the Registry of the Tribunal by the Departments

concerned is not correct. It is, therefore, brought to the notice of all concerned

that the Ministries/Departments concerned may contact the Counsel appointed

for defending the case for all the information relating to the pending cases.

[Dept, of Per. & Trg., OM No.A-11019/36/87-AT Dated the 24/03/87]

Filing of reply and other documents by the respondents

1. Each respondent intending to contest the application, shall file in

triplicate the reply to the application and the documents relied

upon in paper-book form with the Registry within one month of

the service of notice of the application on him.

2. In the reply filed under sub-Para (1), the respondent, shall

specifically admit, deny or explain the facts stated by the applicant

in his application and may also state such additional facts as may

be found necessary for the just decision of the case. It shall be

signed and verified as a written statement by the respondent or any

other person duly authorized by him in writing in the same



manner as provided for in Order 6, Rule 15 of the Code of Civil

Procedure, 1908 (5 of 1908).

3. The documents referred to in sub-Para (2) shall also be filed along

with the reply and the same shall be marked as R-1, R-2, and R-3

and so on.

4. The respondent shall also serve a copy of the reply along with

documents as mentioned in sub-Para (1) on the applicant or his

legal practitioner, if any, and file proof of such service in the

Registry.

5. The Tribunal may allow filing of the reply after the expiry of the

prescribed period.

6. The Tribunal may permit the parties to amend the pleadings in the

same manner as provided under Order 6, Rule 17 of the Code of

Civil Procedure, 1908 (5 of 1908).

Filing of written statements before the Benches to be as expeditiously as

possible

1. The Central Administrative Tribunal has been established with the

primary objective of speedy disposal of applications filed by the

Government employees in respect of their grievances relating to

service matters. It is understood from the Central Administrative

Tribunal that in a number of cases Central Government

Department to whom notices were issued did not put in their

appearance on the dates fixed. While the Central Administrative

Tribunal could, in such cases proceed to hear the cases ex pane;

they had given adjournments to facilitate the Government

Departments to comply with the requirements.

2. Ministries/Departments should ensure that notices received from

the Central Administrative Tribunal are complied within time to

enable it to dispose of applications filed before it as expeditiously

as possible. An adjournment of hearing should be sought for only

on ground, which could be fully justified. If, for any reason, the

Ministry/Department is unable to file their statement on the date

fixed, they should at least produce, through a responsible officer,

the required records/documents before the Tribunal on the date

fixed as it would be possible for the Tribunal to proceed with the

case further on the basis of the records/ documents even without a

written statement.



[Dept, of Per. & Trg., letter No.A-11019/38/85-AT, dated 25/02/87]

Timely submission of the statements and appearance by Standing Counsel or

authorised officer before the Benches on the due dates to be ensured The

Central Govt. Counsels to present the cases of Central Govt. Departments

before the Benches , of the Central Administrative Tribunal wherever such

Departments are respondents have been appointed and their names

communicated to the Ministries / Departments, etc.

As per Section 23(2) of the Administrative Tribunals Act, 1985, as amended by

the Administrative Tribunals (Amendment) Act, 1986, "the Central Govt. may

authorise one or more legal practitioners or any of its officers to act as

Presenting Officers and every person so authorised by it may present its case

with respect to any application before a Tribunal". In view of this, it has been

decided that whenever an application is filed before a Bench of the Tribunal

and a Central Govt. Department/Ministry or one of the officers under its

control is made a respondent, having regard to the importance of the case

concerned, the concerned Department/Ministry can also decide to present the

case before the Bench of the Tribunal directly through one of its officers who

should be at least a Group `A' officer of the Central Govt. If such a decision is

taken, the concerned Ministry/Department may write to the Register of the

Bench of the Tribunal authorising a particular officer to present the case on

behalf of the Govt. Wherever the concerned Ministry/Department feels having

regard to the number of cases which are pending before the Bench of the

Tribunal, that it will be advantageous to authorise one of its officers to present

the cases before the Tribunal, a letter authorising a particular officer in a

general way may be issued to the Registrar of the concerned Bench of the

Tribunal. Since the power to authorise an officer to present the case before the

Tribunal vests only with the Central Govt, it is necessary to obtain the approval

of the Minister concerned for such authorisation unless this power is delegated

to the Secretary of the Ministry/Department.

It has also been brought to the notice of this Ministry that in certain cases

where notices were issued by the Central Administrative Tribunal, the

concerned Govt. Departments, failed to appear before the Bench on the date

fixed or deputed a very junior official with records. It is enjoined that whenever

notice is received from the Tribunal (unless it is decided to present the case

through an officer) the Department concerned should immediately get in touch



with the Senior Standing Counsel/Standing Counsel attached to the particular

Bench for handling the case himself or allotting the case to one of the

Additional Standing Counsels attached to the Bench. The concerned Govt.

Counsel should be fully briefed. It should be ensured that the Govt. Counsel or

the authorised officer appears before the Bench of the Tribunal on the fixed

date.

All the Ministries/Departments and the subordinate offices should ensure

timely submission of the statements before the Benches of the Tribunal and

appearance of the Central Govt. Counsels or authorised departmental

representative on the date fixed for hearing of cases.

[Dept. of Per. & Trg., OM No.11019/58/85-AT, dated 26/05/86]

Primary responsibility for contesting cases will be with the Administrative

Ministry / Department concerned on the basis of specific facts and

circumstances relevant to them

While the Ministry of Personnel, Public Grievances and Pensions is the nodal

Ministry responsible for formulating policies and framing rules relating to

pension and other retirement benefits, seniority, promotion, fixation of pay,

disciplinary proceedings, reservation for Scheduled castes, Scheduled Tribes,

Ex-Servicemen, etc., and other aspects of personnel administration, the

Administrative Ministries/Departments are responsible for considering

individual cases of Govt. servants and issuing appropriate orders thereon in

accordance with the rules and instructions on the subject and in consultation

with the Ministry of Personnel, Public Grievances and Pension, if considered

necessary.

2. A number of petitions are filed by Government servants in various

Courts and the Central Administrative Tribunals challenging the orders issued

by the Administrative Ministries/Departments in individual cases in which the

relevant rules and instructions on the basis of which the impugned orders have

been issued are also challenged. In most of these cases, the Ministry of

Personnel, Public Grievances and Pensions is also impleaded as one of the

respondents for the reason that the relevant rules and instructions were issued

by the Ministry or that the impugned orders were issued in consultation with

the Ministry.



3. The existing practice is that, in all such cases the petitions are contested

by the Administrative Ministry/Department concerned both on its behalf and

on behalf of the Ministry of Personnel, Public Grievances and Pensions, if

necessary, in consultation with the latter. However, recently in some cases, the

Administrative Ministries/Departments insisted on the Ministry of Personnel,

Public Grievances and Pensions defending the Government action on the

ground that the rules/instructions challenged in the petitions were issued by

that Ministry. This is not the correct procedure to follow. Since each case is to

be contested on the basis of the specific facts and circumstances relevant to it,

the Administrative Ministry/Department will be in a better position to defend

the case. If, however, any clarification is required on the interpretation or

application of the rules or instructions relevant to the case, the concerned

Department in the Ministry of Personnel, Public Grievances and Pensions may

be approached for that purpose. Reference relating to pension and other

retirement benefits may be made to the Department of Pensions and

Pensioners' Welfare and in respect of other matters relating to seniority,

promotion, etc., the Department of Personnel, and Training may be consulted.

This Ministry will continue to handle such references with utmost priority.

However, the primary responsibility for contesting such cases on behalf of the

Government will be that of the Administrative Ministry/Department concerned.

[Dept, of Per. & Trg., OM No 20036/23/88-Estt.(D) dated 6/01/89]

Rates of fees for Counsels in various High Courts as revised applicable to

Counsels presenting cases before CAT

The DOP&T is receiving references seeking clarifications regarding the rates

of fee payable to the Central Government Counsel/Advocates appointed as

Presenting Officers in various Benches of the Central Administrative Tribunal.

It may be reiterated that the rates of fees for the Counsels appointed for

presenting the cases before Central Administrative Tribunal will be the same as

prescribed and applicable to Central Government Counsels/Panel Counsels in

High Court. The Ministry of Law and Justice, the Appointing authority of

Counsels in various High Courts, have since revised the rates of fees for

Counsels in various High Courts with effect from 1.4.1987. The revised rates

of fees for Counsels in High Courts will henceforth, be applicable to Counsels

appointed for presenting the cases before the Central Administrative Tribunal.



(Dept. of Per. & Trg., O.M. No. A-11019/38/85-AT, dated 13/06/88)

Need for proper utilization of services of Panel Counsels/Central

Government Counsels for conduct of cases on behalf of the Union of India:

1. It has been brought to the notice of the DOP&T that the services of

Central Government Counsels appointed by this Department for conducting

cases on behalf of the Union of India before various Benches of the Central

Administrative Tribunal are not being utilized by some Ministries/Departments

with the result that the Government Counsels are sometimes not aware of the

cases listed before any bench of the Tribunal on a particular day. In such cases,

briefs are given by certain Ministries/departments to the Central Government

Counsels appointed by the Ministry of Law and Justice for concerned High

Court.

2. The matter has been considered in the Department and it has been

decided that the instructions issued by us vide our O.M. of even number; dated

25-2-1987 and 12-8-1988 are adhered to strictly. In other words, all cases

coming before a Bench of the Tribunal are required to be entrusted to the

Central Government Counsels appointed by this Department except at places

such as Ahmedabad, Jodhpur, Jabalpur and Earnakulam where no Government

Counsels have been appointed or adequate number of Government Counsels is

yet to be appointed. In respect of the places mentioned above and at such

places where Circuit sittings of the Tribunal are being held, services of Central

Government Counsels appointed by the Ministry of Law and Justice for

presenting cases before the High Court may be utilized to handle the cases on

behalf of the Central Government in the Tribunal.

3. If, however, it is considered necessary, to appoint/engage Advocates,

other than the empanelled Counsels circulated by this Department, approval of

the Minister-in-Charge of the Administrative Ministry may be obtained before

such appointment. It may be mentioned in this connection that rates of fee for

engagement/appointment of Counsels in such cases will be the same as are

prescribed and applicable to Central Government Standing/Additional Central

Government Standing Counsel for presenting applications in a High Court.

(Dept. of Per. & Trg., O.M. No.A11019/38/85-AT, dated the 10'hApril 1989.)



As the various Ministries/Departments are aware, Central Government

Standing Counsels have been appointed by the Department of Personnel and

Training at various places for defending cases before the Central

Administrative Tribunal. A list of such Counsels appointed has been circulated

to all Ministries/ Departments with a view to ensure that their services are

made use of for defending cases in the Central Administrative Tribunal on

behalf of the Government of India. It is only in exceptional cases where it is

felt necessary to appoint Counsels outside the panel, private Counsels be

engaged to take care of cases that too with the approval of the Minister

concerned. Instances have, however, come to the notice of this department that

private Counsels are appointed by various Ministries/Departments in a routine

way. It is once again reiterated that as far as possible services of Counsels

whose lists have been circulated by this Department may be utilized and

wherever it is found unavoidable, private Counsels be appointed after

following the procedure prescribed in this Department's O.M. of even number,

dated 13.7.1988 and 10.4.1989.

(Dept. & Trg. O.M. No. A-11019/38/89-AT, dated 29/08/89)

Appointment of Counsel outside CGSC panel only with the approval of

the Minister of the Administrative Ministry

The names of the Central Govt. Counsel appointed to different Benches of the

Central Administrative Tribunal is enclosed (not printed). In respect of

Benches for whom no specific names have been mentioned, the Standing

Counsels for the Central Govt. attached to the High Court are authorised to

present cases of the Central Administrative Tribunal. More Counsels are being

appointed to all Benches, which will be intimated separately.

The Central Government Departments are free to choose any Counsel included

in the panel to present their cases or request the Standing Counsel to allot a

Counsel to deal with their cases. If the number of cases filed before any Bench

of the Tribunal in respect of a Ministry/Department is considerable and it is felt

that it would be better to engage a Counsel exclusively to represent the

Department, there is no objection for the Ministry/Department to appoint a

Counsel who is not included in the panel. The selection of Counsel in such

cases should be with the approval of the Minister of the Administrative

Ministry. Such Counsel may be appointed without mentioning any period of



tenure and they may be informed that their engagement can be cancelled at any

time. The terms and conditions for payment of fees to such Counsel will be the

same as are applicable to the Central Government Counsel/Panel Counsel in

respect of cases coming before the High Courts.

[Dept. of Per. & Trg., Lr.No.A-11019/38/85-AT, dated 25/02/87]

Ministry of Law and Deptt of Pers & Trg to be consulted before

implementing Court orders

It has come to the notice of this department that in cases where the Courts have

passed orders against the Government of India instructions, the administrative

Ministry/Department has not consulted the Law Ministry on the question of

filing appeal against such orders, before implementation of such orders.

2. The matter has been considered in this Department and it has been

decided that whenever there is any Court order against the Government of

India Instructions on service matters, the Administrative Ministry/

Department/Office shall consult the Department of Legal Affairs and the

Department of Personnel and Training on the question of filing appeal against

such an order, as far as possible, well in time, that is before the time limit, if

any, prescribed in such order or before the time limit for filing appeal. No such

orders shall be implemented by the concerned Departments/Ministries without

first referring the matter to the Department of Legal Affairs for advice and to

Department of Personnel and Training.

3. The Ministries/Departments are requested to note the above instructions

for strict compliance.

[Dept, of Per. & Trg., OM No.28027/9/99-Estt. (A) Dated 1/05/2000]

Judgements’ bearing on pay and allowances to be implemented only in

consultation with Nodal Ministry

It has been pointed out by Ministry of Finance that Court judgments which

have a bearing on pay and allowances should be implemented only in

consultation with Department of Personnel and Training. It is learnt that certain

Circles (on their own) are implementing the CAT judgments having a bearing

on pay and allowances without referring to Telecom Headquarters who in turn



will have to consult Department of Personnel and Training before clearance for

implementation.

Ministry of Finance has expressed displeasure at our deciding issues of pay and

allowances which will have a wider impact without consulting them time and

again, instructions have been issued by this Department, that issues with a

bearing on pay and allowances are to be decided in consultation with nodal

Ministry, but these instructions are not being adhered to properly in some

cases.

It is therefore requested that every such case is invariably referred to

Directorate for consulting it with the nodal Ministry. Circles are not to

implement such CAT/Court decisions on their own.

[G.I., Dept, of Telecom. Letter No.50-60/94-PAT dated 13/12/94]

Communications to Government servants or their Associations /Unions

and submissions before Courts/Central Administrative Tribunal

I As per the Allocations of Business Rules, each

Ministry/Department is responsible to discharge the functions

allocated to it as well as to handle the administrative problems

relating to service conditions of the employees under its

administrative control. Similarly, U.T. Administration is

responsible for all matters concerning staff under their control.

The Decision-making process, however, involves consultation

with/concurrence of other Ministries/Departments. In such cases,

the views/comments of the Ministry/Department which has been

consulted in the matter may be advisory in nature while in other

cases such views/comments may be mandatory. In case there is a

difference of opinion between two Ministries/Departments, these

differences are sorted out by following such procedure as is laid

down in this behalf. In all such cases whatever be the final

decision, it is the decision of the Government and not the decision

of any individual, Ministry/Department.

II It has been observed that while handling service matters/cases of

the Government servants, the administrative

Ministries/Departments in their communications to the

Government servants/Association etc. or even in the affidavits



filed/submissions made before the Supreme Court/Tribunal etc.

make specific references to a Ministry/Department under whose

advice/directives a particular decision has been taken. This gives

an impression that the decision is that of the Ministry/Department

which has been consulted and not that of the Government. Such

allusion places the Government in an embarrassing position

particularly when legal aspects are involved. It is, therefore,

stressed that while communicating decision(s) on the

representation(s)/complaint(s) etc. submitted by the Government

servants or their Associations, etc. the final decision should be in

the name of the appropriate authority and in no circumstances, the

communication should convey or give an impression that the

decision was based on the advice of a particular

Ministry/Department which accepted/ rejected the demand(s).

Exceptions may be made in respect of the sanctions etc. where

according to financial regulations, under rules/or other mandatory

provisions, it may be obligatory to mention the name of the

specific authority with whose concurrence, or in consultation with

whom the sanction has been issued.

III Similarly, in case of affidavits filed or oral submissions made

before Courts/Central Administrative Tribunal in matters

pertaining to writ petitions/applications filled by the Government

servants or their Associations etc., the submissions should be

made on behalf of the Government. In no case, the name of any

specific Ministry/Department, are mentioned in these submissions.

Even in cases where the matter is pending before a

Ministry/Department, the submission made should be that the

matter is under consideration of the Government and not that of

any particular administrative Ministry/ Department.

IV In service matters/cases filed by Government servants

Associations, Government of India is one of the Respondents, all

such cases have to be defended by the Administrative

Ministry/Department/ Organization where the Government servant

is serving or served last. In case other Ministries Departments

have been made respondents they are to be treated as pro-forma

Respondents and the matter has to be defended by the

administrative Ministry on behalf of the Government of India i.e.,

on its behalf as well as on behalf of other Ministries/Departments.



In brief, there has to be only one counter-affidavit on behalf of the

Government and it has to be prepared and filed by the Ministry/

Department etc. where the petitioner/applicant is serving.

However, where more than one Ministry/ Departments has been

made parties, those Ministries/Departments should be consulted or

the draft counter reply should be shown to them.

V Further, it is observed that Court/CAT cases are not handled

expeditiously and within the time schedule. Some times,

references are made to the nodal Ministries/Departments dealing

with policy matters or to the Ministry of Law at the last moment

viz. a few days before the Ministry date fixed by the Court

Tribunal. This does not give sufficient time to these

Ministries/Departments to carefully examine the issues involved.

It is, therefore, stressed that on receipt of the Notice along with the

original Application/Petition the administrative

Department/Authority should immediately prepare Para-wise

comments counter affidavit. Wherever necessary the specific

points may be brought out clearly on which comments of other

nodal Ministries like Finance or Department of Personnel &

Training etc, are required. There upon reference should be made

to the concerned Ministry/ Department on priority basis.

Thereafter, the matter may be referred to the Ministry of

Law/Standing Government Counsel engaged in the matter for

necessary vetting and filing the matter before the Tribunal/Court.

The Ministry should also make arrangements for appearance

before the Court/ Tribunal as and when the matter comes for

hearing and for this purpose proper liaison with the Government

counsel should always be maintained.

VI In cases where the matter is decided against the Government,

immediate steps should be taken to analyze the judgement and a

view taken in consultation with the nodal Ministry concerned as to

whether the judgement should be implemented or a SLP needs be

filed in the matter. The reference to nodal Ministry for their advice

should be made well before the last date for filing Review

Application before the CAT itself or SLP need be filed should be

clearly brought out and the matter referred to Ministry of Law for

their advice. It is the primary duty of the administrative Ministry



concerned to follow the matter at every stage and ensure filing of

the counter-affidavit or SLP within the time schedule laid down

by the Tribunal/Court. In case delay in filing the reply is

apprehended, necessary steps to seek extension in time or stay

orders may be taken with the assistances of Standing Counsels.

VII In certain cases, the Tribunal/CAT may not deliver substantive

judgement in the matter and may direct the Government to take a

final view in the matter based on certain guidelines etc. The

Tribunal/Court may desire final decision by a specific date. In all

such cases, it is essential to ensure compliance of the orders within

the specified time. In case any delay is expected in reaching a final

decision in the matter, extension of time from tribunal/Court

should always be sought for. In such cases also, it has to be

ensured that the matter is referred to different consulting

agencies/Departments well before the last date of taking a final

decision.

VIII In brief, the administrative Ministry has to ensure that in all cases

timely action is taken and in no case the litigation is allowed to

prolong to the extent that it results in contempt proceedings.

IX All the Ministries and U.T. administrations are requested to ensure

that these instructions are strictly followed by all concerned under

their administrative control.

[GOI Min of Finance, Deptt of Expdr. OM F.No.7 (32)-E-III/92 dated

24/05/93]



Budget control, Vote on Account

Re-appropriation

BUDGET

ORIGIN

In India, the first budget was introduced in the year 1800 by Sir James

Wilson, Finance Member of Viceroy's Council - British Model was

transplanted.

A1M:

(1) Budget was introduced as an instrument to ensure accountability

of Executives to Parliament.

(2) In 1921, the post of C&AG was created and his report on the

financial transactions of the Govt. was brought under scrutiny by

legislative committee called Public Accounts Committee.

(3) The Deptt of Finance used budgeting system for exercising

necessary financial control over spending authorities.

(4) With the separation of "Accounting Functions" from audit in

1975, C&AG was relieved of his responsibility of compiling of

accounts. As far as DAD was concerned in the year 1964,

accounting work was separated from Audit.

PROCEDURE FOR BUDGETING:

(1) Article 112 (I) of constitution, requires the Govt. to present to both

houses of Parliament before commencement of each financial year an "Annual

Financial Statement" known as Budget showing estimated receipts &

expenditure of Union Govt. for that year. It is submitted in two parts: (a)

General Budget & (b) Railway Budget. The formulation of Budget is done by

Minister of Finance with the assistance of admin & executive authorities,

keeping in view the state of economy & prevailing economic conditions in the

country.



(2) Provision for committed expenditure which is not controllable, viz. debt

repayment, interest payment, defense, salaries, food subsidies, etc. (This

accounts for 75% of the budget) Balance 25% only is available for plan

expenditure.

(3) Stages of approval of Budget by Parliament:

(a) General discussion on the Budget.

(b) Discussion & voting on the demands for grants

(c) Passing of Appropriation Bill, &

(d) Passing of Finance Bill.

The third stage, viz. "Appropriation Bill" is generally not to exceed the amount

included "demands for grants". Passing of appropriation bill marks the

authorisation by Parliament to Govt. expenditure.

Finance Bill contains proposals of Govt. for raising the required revenue to

meet the proposed expenditure.

(4) BUDGETARY CONTROL BY PARLIAMENT:

(a) Parliament exercises financial control through three financial

committees, viz:

(i) Public Accounts Committee,

(ii) (ii) Estimates Committees, &

(iii) Committee on Public Undertakings

(b) (i) PAC discuss the reports of C&AG, i.e. a small percentage of audit

Para.

(ii) Estimates Committee discusses and debates the efficiency appraisal

of Depts., i.e. finding out where economy and efficiency could be effected

in functioning Deptts, &

(iii) Committee on Public Undertakings (set up in 1964) combines the

functions of PAC with Estimates committee.



(5) PERFORMANCE BUDGETING:

(a) Concept/ Definitions:

(i) Budget is now an exercise for marshalling of fiscal and

organisational resources for attainment of benefits - i.e. secure the

goal of efficiency with economy.

(ii) It is a process for systematically relating the spending of funds to

the accomplishment of planned objectives

(iii) The annual budget is in essence of a work plan specifying the

programmed targets to be achieved during the financial year.

(b) Method

The essence of P.B. lies in formulation of objectives which should be

operational and capable of being converted into work assignments.

(i) Object/Line Item Classification serves the purpose of financial

accountability and ensuring legality 8y regularity of expenditure.

(ii) Functional classification relates to budgeting in terms of

functions, programmes, activities and projects.

Illustration

FUNCTION : Agriculture, Education, Public Health

PROGRAMME : High Yielding Variety

ACTIVITY : Development of Rice Crop

While objective classification lays emphasis on inputs on which money

is proposed to be spent thereby indicating the nature of expenditure viz.



salaries, TA, Minor Works, etc. programmed/ activity classification highlights

the purpose of budgeted expenditure.

(iii) Essence of P.B. is to fix physical targets for

accomplishment in respect of each programmed and activity to

enable working out of corresponding financial estimates. For this

purpose, pre-determined norms/yardsticks/ standards for

measuring inputs 8 outputs are to be carefully fixed.

(iv) Drawbacks of P.B: Qualitative output cannot be measured

easily

(v) The P.B. has close links with new scheme of classification.

(i) Major Head - Assigned to each function -

E.G. Medicines

(i-a) Sub Major Head - Sub Functions:

(a) allopathic

(b) Other systems of Medicine

(ii) Minor Head - Each Programmed

(iii) Sub-Heads - Activities, Schemes,

Organizations covered by programmed.

(iv) Detailed Head - Item wise.

The above classification has a link between budget account heads, plan

heads of development and to facilitate monitoring, analysis of expenditure on

functions, programmed activities to aid management functions.

(vi) For successful operation of P.B. a style of management based on

decentralized responsibility is, necessary by laying emphasis on

operating levels where resources are utilized, services are rendered

and work is accomplished.



(vii) P.B. also requires efficient control and reporting

systems, at top level, middle level and operational (lower level) in

order to obtain a correct picture of physical accomplishment

and related cost of each programmed / activity. This

could otherwise be called Management Accounting System.

However, under present Government, account system, which is done on

cash basis, it is difficult to know the cost assignable to an activity.

(viii) Zero Based Budgeting (ZBB): It requires, should not take earlier

years expenditure as base, but should start

on a clean slate, i.e. for ensuing year's budget and ground balance

should be zero.

(a) Implications:

(i) Every year activities of an organisation should be viewed afresh

and priorities among competing claims for allocation of funds

settled by using techniques like cost benefit-cost effective

analysis. It means that complete re-examination of all ongoing

programmes and activities should be carried out by taking a total

look instead of following incremental approach to budgeting.

(ii) Identity and remove duplication or multiplication of activity by a

number of agencies of the same organisation. This is to eliminate

multiplication of infrastructural operations by various agencies.

(iii) Looking for a better alternative for incurring expenditure like solar

equipment instead of election gadget.

(iv) Aims of optimising expenditure by making it productive and

efficient. Evaluation of actual achievement by a sound system of

monitoring and review performance. Performance budgeting as an

essential adjunct of ZBB would ensure productivity and efficiency

of expenditure.

(b) How Being Followed:

(i) In the economic surveys for 1985-86 & 1986-87 presented to

Parliament embodies the requirement of initiating ZBB in all

Government Departments from 1987-88.



(ii) (a) Identification of decision units.

(b) Formulation & development of decision packages

(c) Evaluation of ranking of decision package in order of

priority.

(d) Preparation of budget by allocating resources to activities

or decision packages by utilising hierarchical funding cut

off levels.

What is Decision Unit?

It consists of programmed, scheme, project or an operation. Discretions

& options available should be suitably made use of by analytical study 8v

review of expenditure.

Decision Package

It comprises of comprehensive justification for budget estimates of an

activity by enquiring

(a) into the need for proposed expenditure

(b) specific purpose it will serve

(c) better alternative way of incurring expenditure.

(C) Methodology 8s Problems:

(i) Need for ZBB has arisen because of resource crunch and to solve

the problems of allocating scarce resources among competing

demands.

(ii) Financing high priority decisions packages at the cost of low

priority packages.

Problems

(i) Too much paperwork of unmanageable proportions. Linking of

ZBB with PB is necessary to increase the usefulness of the latter.

(ii) Involves extensive review of expenditure roughly 1/3 in a year

(iii) Constraints: Non-availability of trained person for applying

evaluative analysis/techniques like cost benefit - cost - effective



analysis. Designing a sound M.I.S. (Management Information

System) so as to achieve the desired objective.

(iv) Results of such analysis would lead to re-deployment of

manpower, material, machining, equipment which may become

redundant.

23. RDR Heads & Classification Of hand book

24 Reconciliation and clearance of suspense head 0/018/65

25. Focal point branch-

26.Defence Profoma Accounts-OMRO/DMRO

27. Defence exchange account

28. Review of balances

Procurement & contract

BUDGETARY CONTROL OVER DEFENCE EXPENDITURE

INTRODUCTORY

The main features of the budget and accounting heads relating to the Defence

Services are

(i) The expenditure on Revenue Account is distinguished from

that on Capital Account. Generally, the expenditure on

Revenue Account represents the recurring or operating

expenditure, white the expenditure on Capital Account is used

for creation of durable capital assets.

(ii) The classification of expenditure on Armed Forces is generally

according to the nature of charge, and not with reference to the

unit formations on which it is incurred. Thus pay and

allowances of army personnel are booked to the same minor

head, irrespective of unit/formation where they may be serving.

(iii) In case of cert in distinct organisations, established for a

specific role, the entire expenditure on the organisation is

sought to be identified in the budget accounts, irrespective of

the nature of expenditure. Thus, separate minor heads exist for

Research and Development Organization, Director General

Quality Assurance, Military Farms, National Cadet Corps,

Rashtriya Rifles etc., where under all categories of expenditure



(like pay and allowances, transportation, stores, works and

miscellaneous etc.) on these organisations are included.

(iv) Inter-Services adjustments are made for the cost of stores and

equipment etc. supplied from one Service to another, so that

the expenditure on each Service is available distinctly.

(v) The accounting heads have been so arranged as to enable the

administrative authorities to have sufficient data, necessary for

the exercise of closer and more effective budgetary control

over expenditure.

The Demands for Grants for meeting expenditure on Defence Services are

passed by Parliament each year, and within the amounts of these Demands for

Grants, Ministry of Defence arrange; for financing of services for which that

Ministry is responsible. The provisions made in these Demands for Grants are

based on estimate of requirements, within the constraints of total resources

available and the demands on these resources.

Soon after the presentation of the Demands for Grants in the Parliament, the

authorities at Service Headquarters and other central controlling authorities

will notify to their lower formations the allotments under the locally controlled

heads. These allotments will be treated as 'Provisional' and no expenditure

against them can be incurred till passing of the Demands for Grants.

VOTE ON ACCOUNT

Under Article 114(3) of the Constitution, no amount can be withdrawn from

the Consolidated Fund without the enactment of a law by Parliament.

Therefore, after the Demands for Grants are passed, Parliament's approval to

the withdrawal from the Consolidated Fund of the amounts voted and of the

amounts required to meet the expenditure charged on the Consolidated Fund is

sought through an Appropriation Bill.

The process of detailed consideration of the Demands for Grants is not

completed before the commencement of a new financial year. To enable the

Government to cant' on its normal activities from 1st April till such time as the

Appropriation Bill is enacted, a Vote on Account is obtained from Parliament

through an Appropriation (Vote on Account) Bill.



Generally, the provision included in the "Vote on Account" represents the sums

,required for meeting the expenditure likely to be incurred during April and

May, i.e., broadly one sixth of the estimated gross expenditure included

in the Demands for Grants. The period for which "Vote on Account"

is taken may vary depending upon the situation. After the

Appropriation (Vote on Account) Bill is passed and assented to by

the President (generally before the commencement of the new

financial year), the controlling authorities have to ensure that the

expenditure in excess of the provision in Vote-on-Account is not

incurred.

Note 1: The purpose of the 'Vote on Account' is to keep the

Government functioning, pending the passing of the Demands for

Grants for the full financial year. Expenditure on ‘New Services'

should not, therefore, be incurred before the grants for the full, year

are passed and the connected Appropriation Bill is enacted.

Note 2: Some delay may occur in certain type of cases it the issue of

provisional allotment letters. In such an event, while taking

appropriate action to call for the allotment letters, request for

provisional payments in the absence of allotment letters may be

considered by the Controllers under the discretionary power vested in

them in Paras 53 etc. seq. of the Defence Audit Code (1992).

Note 3: In certain cases where the expenditure in the months of April

and May is more as compared to other month of the year or the

expenditure is of an obligatory nature which cannot be deferred it

may not be possible to restrict the expenditure to 1/6th of the Budget

Estimates for the particular head. The Controllers may authorise

provisional payments in such cases also, so long as the 'Vote on

Account" in respect of the Demand is Grant as a whole is not

exceeded.



CONTROL OVER EXPENDITURE

The expenditure against Central Controlled Heads is monitored by

controlling authorities at Armed Forces Headquarters and no

distribution of provision is made b subordinate authorities for these

heads. It is in the case of expenditure compliable to "Locally

Controlled Heads" that the Defence Account; Department, jointly

with the administrative and executive authorities plays an important

part in keeping a watch on the progress of expenditure against the

sanctioned allotments.

To enable the administrative Branches of the Armed Forces

Headquarters and the Sections of the Ministry of Defence (Finance)

to watch the progress of expenditure against the grants, the EDP

Centre, New Delhi will furnish to them relevant extracts of compiled

actual from the printed All India Compilations for Service Heads by

10th of the month following that to which the actual relate.

EXPENDITURE SUSCEPTIBLE TO LOCAL CONTROL

List of accounting heads under which expenditure is susceptible to local

control is given in Appendix 8. The following provisions relate to these heads,

except that in case of MES heads, the MES Regulations apply.

The three main stages of budgetary control against allotments are:

(1) Initial distribution of budget grants.

(2) Watching expenditure against allotments, and

(3) Re-appropriation.

INITIAL DISTRIBUTION OF BUDGET GRANTS

The ultimate responsibility for ensuring that the expenditure does not exceed

the corresponding budget allotment rests on the Principal Staff Officer/Senior

Officer at the Services Headquarters/Departments within whose control the

relative activities fall.



The amounts provided in the Defence Services Estimates for expenditure

subject to local control are allotted to Commands and other formations by the

aforesaid authorities. These authorities keep back certain amounts as 'Reserve'

to meet unforeseen requirements from the formations. The quantum of this

'Reserve' is decided by the controlling officer at the Services Headquarters, in

consultation with the concerned Integrated Finance.

The authorities at lower stages in the chain of control have the discretion to

hold in 'Reserve' a portion of the allotment placed at their disposal.

All communications of allotment from the Services Headquarters/Departments

issue with the concurrence of the respective Integrated Finance and these are

endorsed to the Controllers of Defence Accounts concerned. Sub-allotments by

Commands or formation Headquarters are also notified to the Controllers con-

cerned.

WATCHING EXPENDITURE AGAINST ALLOTMENTS

It is the primary responsibility of the authorities to whom allotments are made,

to watch the progress of expenditure and to see that the expenditure does not

exceed the allotment. In order to facilitate this, the Controllers of Defence

Accounts; will render monthly statements to the allottees showing the serial

numbers of the claims admitted in audit and the amounts debited against the

allotment. These statements will be sent by the Controllers by the 25th of the

month following that to which they relate.

Note : Bills, etc., sent to the Controllers for payment or adjustment against a

particular allotment are required to be serially numbered, to enable the

administrative authorities to reconcile the statistics kept by them and those

furnished by the Controllers.

The Controllers of Defence Accounts will also simultaneously keep a watch on

the progress of expenditure against sanctioned allotments and bring to the

'notice of the allottees and the immediate higher authorities cases in which the

trend of expenditure is, in the opinion of the Controllers, abnormally heavy or

unusually low.



Note 1: For the budgetary control to be meaningful and strict, it is of utmost

importance that the compiled actual should be as accurate and up-to-date as

possible. Accordingly, the Controllers will ensure that all transactions arising

in their respective audit areas (including Inter-Services adjustments to the

extent permissible) are brought to account promptly. This requirement equally

applies to transactions which are passed on to them through Settlement

Accounts and Exchange Accounts by the Civil and other Defence Accounts

Officers respectively.

Note 2: If an item of expenditure is accounted for in the books of a Controller

in respect of a locally controlled head, the progress of which is watched by

another Controller, the amount involved will be intimated by the former to the

latter through the monthly statement.

The procedure of highlighting high/low trend of expenditure enables the

controlling authorities to initiate prompt remedial measures. In cases where

savings can be foreseen, they may surrender such portion of the allotment as is

not likely to be necessary for the rest of the financial year. In cases where the

progress of expenditure in the financial year has been rather high, either the

expenditure in the remaining part of the financial year has to be regulated to

contain it within the sanctioned allotment or higher authorities have to be

approached for additional allotment with full justification for the increase.

Note: The excesses over modified allotments under locally controlled heads

coming to notice after the close of the year will be dealt with in the manner laid

down in Rule 120 F.R.I. Pt I Vol 1. (1983 Edition).

In cases where additional allotment becomes inevitable action to obtain it is

required to be taken by the administrative authorities promptly and sufficiently

early. This is necessary to avoid delay in settlement of claims as no payment in

excess of sanctioned allotment under locally controlled heads can be made,

save in exceptional cases under the personal orders of the Controller of

Defence Accounts concerned (or the Officer designated by him, see Para 55 of

Defence Audit Code) who may authorise provisional payment at his discretion

whenever he considers such a course to be in the best of interests of the State.

In cases where it is found that the administrative authorities fail to be vigilant

in applying promptly for additional allotment of funds where provisional

payments have been authorised, the Controller will ask the authority concerned



(endorsing a copy to the next higher administrative authority) to take urgent

action in the matter, adding a warning that further provisional payments will

not be made unless application for additional allotment, with reasons in support

is submitted through him promptly. If this warning has no effect and the

Controller is personally satisfied that there has been laxity on the part of the

administrative authorities he should refuse further provisional payments and

report his action to the authorities at the Defence Headquarters and the

Integrated Finance concerned through the CGDA.

RE-APPROPRIATION

The procedure of re-appropriation provides some flexibility by which savings

in the budget provision under one head can be utilized to meet excess

expenditure under another head, provided the heads are in the same Demand

for Grant voted by the Parliament. Since the Revenue expenditure and Capital

expenditure of Defence Services are provided in separate Demands for Grants,

no re-appropriation between Revenue and Capital heads is permissible. The

cardinal principle is that an authority can re-appropriate only in respect of

savings arising out of the allotments placed at his disposal. The normal rules

governing re-appropriation of funds in the case of Defence Services Estimates

are summarized in the succeeding sub-Paras.

Powers of re-appropriation between different minor heads under a major head

are exercised by the Government of India.

Full powers of re-appropriation between the subheads within the minor head

under each Demand have beer delegated to the Ministry of Defence.

Powers of re-appropriation are also exercised by the following lower

authorities

(a) Central Controlling Authorities;

(b) Command Headquarters;

(c) Independent Area Headquarters;

(d) Air Force Commands; and

(e) Independent Stations

In the case of direct controlling officers of the Headquarters, re-appropriations

are permissible only between control heads falling under the same subhead. In



the case of the Navy, powers of re-appropriation between different detailed

heads falling under the same minor head are exercised by Naval Headquarters.

The powers of re-appropriation between different sub-heads falling under the

e minor head are confined to Principal Staff Officers except in se of

Military Engineer Services which are governed by the instructions laid down in

MES Regulations and such other instructio1 as may be issued by Government

from time to time.

Powers to re-appropriate expenditure not exceeding ten percent of the original

budget provision between different Sub-heads falling within the same Minor

head will be confined to the DSD, DMT, DDSD (FP) AG, OMG, DOS and

DGAFMS in respect of the Minor heads controlled by each except in the case

of Military Engineer Services which are governed by separate orders on the

subject. Similarly in respect of Navy and Air Force, these powers are vested in

VCNS and Directorate of Financial Planning Air HOr. respectively.

No re-appropriation is permissible between funds allotted for `Charged' items

of expenditure in terms of Article 112 (3) of the Constitution and voted items

of expenditure.

Re-appropriations are permissible only between expenditure heads. Thus,

excess receipts and recoveries which are required to be accounted for as such

cannot be utilized to meet expenditure in excess of sanctioned grant.

All re-appropriations are formally sanctioned and copies endorsed to the

Accounts authorities. Re-appropriations are sanctioned by the Principal Staff

Officers and the Ministry of Defence in consultation with the Integrated

Financial Advisers.

Sanction of Government of India is required to any re-appropriation which

affects the following

(a) Savings due to non-expenditure of amount provided for a specific

measure.

(b) An error in estimates.

Note: No formal re-appropriation is sanctioned for transferring funds under the

same control head between Commands, Areas, Sub-Areas, Institutions, Depots,



etc. Such transfers are effected by first withdrawing savings surrendered by one

Command, etc. and then re-allotting as required.

(ii) By 15tn August-in respect of the preceding financial year's actual (to the

DFA (MO) direct).

The amounts actually compiled by the Chief Controller of Accounts (Factories)

in respect of loans granted to the T.D.E. personnel will be furnished by him

separately in addition.



BUDGBT DOCUMENTS

PRESENTED TO INDIAN PARLIAMENT

Annual Financial Statement

1. Under article 112 of the constitution, a statement of estimated receipts

and expenditure of the Government of India has to be laid before

parliament in respect of every financial year, which runs from Ist April

to 31 March. This I statement is the main budget document and is

normally laid in Parliament in (the current year) in the month of

February for the following financial year. The Annual financial

statement shows the estimated receipts and payments of Government

under the three parts in which Government accounts are kept. (i)

Consolidated fund, (ii) Contingency Fund and (iii) Public Account.

2. All revenues received by Government, loans raised by it, and its receipts

from recoveries of loans granted by it, from the Consolidated Fund. All

expenditure of Government is incurred from the Consolidated Fund and

no amount can be withdrawn from the fund without authorization from

Parliament.

3. Occasions may arise when Government may have to meet urgent

unforeseen expenditure pending authorization from Parliament. The

Contingency Fund is an imprest placed at the disposal of the President to

incur such expenditure. Parliamentary approval for such expenditure and

for withdrawal of an equivalent amount from the Consolidated Fund is

subsequently obtained and the amount spent from Contingency fund is

recouped to the Fund. The corpus of the Fund authorized by the

Parliament, at present is Rs. 50crores.

4. Besides the normal receipts and expenditures of Government which

relate to the Consolidated Fund, certain other transactions enter

Government accounts, in respect of which the Government acts more as

a banker. For example, transactions relating to provident funds, small

savings collections, other deposits, etc. The moneys thus received are

kept in the Public Account and the connected disbursements are also



made there from. Generally speaking, Public Account funds do not

belong to Government and have to be paid back some time or the other

to the persons and authorities who deposited them. A parliamentary

authorization for payments from the Public Account is, therefore, not

required. In a few cases, a part of the revenue of Government is set apart

in separate funds for expenditure on specific objects like sugar

development, replacement of depreciated assets of commercial

undertakings, etc. These amounts are withdrawn from the consolidated

Fund with the approval of Parliament and department in the Public

Account for expenditure on the specific objects. The actual expenditure

on the specific objects is, however, again submitted for vote of

parliament even though the moneys have already been earmarked by

parliament for transfer to the funds.

5. Under the Constitution, Budget has to distinguish expenditure on

revenue account from other expenditure. Government budget, therefore,

comprises (i) Revenue Budget and (ii) Capital Budget.

6. Revenue Budget consists of the revenue receipts of Government (tax

revenues and other revenues) and the expenditure met from these

revenues. Tax revenues comprise proceeds of taxes and other duties

levied by the Union. The estimates of revenue receipts shown in the

Annual Financial Statement take into account the effect of the taxation

proposals made in the Finance Bill. Other receipts of Government

mainly consist of interest and dividend on investments made by

Government. Revenue expenditure is for the normal running of

Government departments and various services, interest charges on debt

incurred by Government, subsidies, etc. Broadly speaking, expenditure,

which does not result in creation of assets, is treated as revenue

expenditure. All grants given to State Governments and other parties are

also treated as revenue expenditure even though some of the grants may

be for creation of assets.

7. Capital Budget consists of capital receipts and payments. The main items

of capital receipts are loans raised by Government from the public which

are called Market loans, borrowings by Government from Reserve Bank

and other parties through sale of Treasury Bills, loans received from

foreign Governments and bodies and recoveries of loans granted by



Central Government to State and Union territory Governments and other

parties. Capital payments consist of capital expenditure on State and

Union territory Governments, Government companies, Corporations and

other parties. Capital Budget also incorporates transactions in the Public

Account.

Accounting Classification

8. The estimates of receipts and disbursements in the Annual Financial

Statement and of expenditure in the Demands for Grants are shown

according to the accounting classification prescribed under article 150 of

the Constitution. This classification is intended to allow Parliament and

the public to make a meaningful expenditure.

9. Under the constitution, certain items of expenditure like emoluments of

the President, salaries and allowances of the Chairman and the Deputy

Chairman of the Rajya Sabha and the Speaker and the Deputy Speaker

of the Lok Sabha, salaries, allowances and pensions of Judges of the

Supreme Court and the Comptroller and Auditor General of India,

interest on the repayment of loans raised by Government and payments

made to satisfy decrees of courts etc. are charged on the Consolidated

Fund and are not required to be voted by the Lok Sabha. The Annual

Financial Statement shows the expenditure charged on the Consolidated

Fund separately.

Demands for Grants

10. The estimates of expenditure from the Consolidated Fund included in the

Annual Financial Statement and required to be voted by the Lok Sabha

are submitted in the form of Demands for Grants in pursuance of article

113 of the Constitution. Generally, one Demand for grant is presented in

respect of each Ministry or Department. However, in respect of large

Ministries or Departments more than one Demand is presented. Each

Demand normally includes the total provisions required for a service,

that is, provisions on account of revenue expenditure, capital

expenditure, Grants to state and union territory Governments and also

loans and advances to the service. In regard to Union Territories

without Legislature, a separate Demand is presented for each of the



Union territories. Where the provision for a service is entirely for

expenditure charged on the charged on the Consolidated Fund, for

example interest- payments, a separate Appropriation, as distinct from a

Demand, is presented for that expenditure and it is not required to be

voted by the Parliament. Where, however, expenditure on a service

includes both ‘Voted and ‘Charged’ items of expenditure, the latter are

also included in the Demand presented for that service but the ‘voted’

and `charged' provisions are shown separately in that Demand.

11. The Demands for Grants are presented to the Lok Sabha along with the

Annual Financial Statement. Each Demand first gives the totals of

`voted' and `charged' expenditure as also the 'revenue' and `capital'

expenditure included in the Demand separately and also the grand total

of the amount of expenditure for which Demand is presented. This is

followed by the estimates of expenditure under different major heads of

account. The break up of the expenditure under each major head

between "Plan" and 'Non-Plan' is also given. The amounts of recoveries

taken in reduction of expenditure in the accounts are also shown. A

summary of Demands for grants is given at the beginning of thus

document, while details of "New Service" or `New Instrument of

Service" such as formation of a new company, undertaking a new

scheme etc., if any, are indicated at the end of the document.

Finance Bill

12. The proposals of government for levy of new taxes, modification of the

existing tax structure or continuance of the existing tax structure beyond

the period approved by Parliament are submitted to Parliament through

the Finance Bill.

13 The Budget documents presented in terms of the Constitution have to

fulfill certain legal and procedural requirements and hence may not by

themselves give a clear indication of the major features of the Budget.

To facilitate and easy comprehension of the Budget, these are described

now. The same have been elucidated below to facilitate an easy

comprehension of the budget.

Budget at a Glance



14. The document Budget at a Glance shows in brief receipts and

disbursements along with broad details of tax revenues and other

receipts. This document also exhibits broad break-up of expenditure -

Plan and Non-Plan, allocation of Plan Outlays by Sectors as well as by

Ministries/Departments and details of resources transferred by the

Central Government to State and Union Territory Governments. This

document also shows the revenue deficit, the primary deficit, the

budgetary deficit and the fiscal deficit of the Central Government. The

excess of Government's revenue expenditure over revenue receipts

constitutes revenue deficit of Government. Taking into account the

capital expenditure and capital receipts also there is a gap between

receipts and expenditure of a year. This gap which is covered by issue of

91 days Treasury Bills, (mostly held by Reserve Bank), constitutes

overall budgetary deficit. Apart from, this borrowing through Treasury

Bills, Government also borrows funds under many schemes, which form

part of capital receipts. The difference between the total expenditure of

Government by way of revenue, capital and loans net of repayments on

the one hand, and revenue receipts of Government and Capital receipts

which are not in the nature of borrowing but which finally accrue to

Government on the other, constitutes fiscal deficit. Primary deficit is

measured by fiscal deficit reduced by gross interest payments.

Expenditure Budget Vol. 1

15. Expenditure Budget Vol. I deals with revenue and capital disbursements

of various Ministries/ Departments and gives the estimates in respect of

each under `Plan' and `Non Plan'. This also gives analysis of various

types of expenditure and broad reasons for the variations in estimates.

16. Under the present accounting and budgetary procedures, certain classes

of receipts, like payments made by one department to another and

receipts of capital projects` or schemes are taken in reduction of the

expenditure of the receiving department. The estimates of expenditure

included in the Annual Financial Statement are for the net expenditure as

will be reflected in the accounts, that is, after taking into account the

recoveries. The document Expenditure Budget makes certain other

refinements like netting expenditure of related receipts so that inflation



of receipts and expenditure figure are avoided and there can be a better

appreciation of the magnitudes of various expenditure. In separate

annexure guarantees given by Central Government and outstanding as at

the end of and contributions to International bodies are shown. A

statement showing the estimated strength of establishment of various

Government Departments and provision made therefore is also included

in the documents.

Expenditure Budget Vo1.2

17. To understand the objectives underlying the expenditure proposed in the

Demands for Grants a brief description of the various items of

expenditure on major programmes included in the Demands together

with the reasons for variation between the original budget and revised

budget for the current year, and the requirements for the budget year are

given in this volume.

Receipts Budget

18. Estimates of receipts included in the "Annual Financial Statement are

further analyzed in the Document "Receipts Budget". The document

gives details of revenue receipts and capital receipts and explains the

estimates. Trend of receipts over the years and details of External

Assistance received are also included.

19. To facilitate understanding of the taxation, proposals made in the

Finance Bill, the provisions of the Bill are explained in the document

titled Memorandum explaining the provisions in the Finance Bill.

Detailed Demands for Grants

20. The Demands for Grants are followed by the Detailed Demands for

Grants laid on the table of the Lok Sabha some time after the

presentation of the Budget, but before the discussion on Demands for

Grants commences. These Detailed Demands for Grants show further

details of the provisions included in the Demands of Grant as also of

actual expenditure during the previous year. A break up of the estimates

relating to each programmed/organization, wherever the amount



involved is not less than Rs.10lakhs, is given under a number of detailed

heads which indicate the categories and nature of expenditure Incurred

on that programmed, like salaries, wages, travel expenses, material and

equipment, grants-in-aid, etc. At the end of these Detailed Demands are

shown the details of recoveries' taken in reduction of expenditure in the

accounts. Physical and financial aspects of major programmes and

schemes are included in the Performance Budgets presented to

Parliament separately by the Ministries/ Departments.

Resources transferred to States

21. The Sate Governments are paid grants and loans for various Plan and

Non-Plan schemes. Besides, sizeable amounts of tax revenues collected

by the Central Government in the form of income tax, union excise

duties and estate duty are also transferred to the State Governments.

Some of the States also get grants to cover the gap in their revenue

resources, as recommended by the Finance Commission. The total

resources transferred to State and Union territory Governments are

indicated in a statement incorporated in the document Budget at a

Glance. Further details of these transfers by way of share of tax, grants-

in-aid and loans are given in Expenditure Budget Vol. 1. The share of

Union excise duties and bulk of the grants and loans are paid by the

Ministry of Finance and are included in the Demand "Transfers to State

Governments" presented on its behalf. The grants and loans paid by

other Ministries are provided for in the Demands of respective

Ministries.

Plan Outlay

22. Plan expenditure forms a sizeable proportion of the total expenditure of

the Central Government. These Demands for Grants of the various

Ministries show the Plan expenditure under each head separately from

the non-Plan expenditure. The Expenditure Budget Vol. 1 also gives the

total Plan provisions for each of the Ministries arranged under the

various heads of development and highlights the budget provisions for

the more important Plan programmes and schemes. A description of

important schemes included in the Plan along with the objectives targets



and achievements is given in the Performance Budget of the respective

Ministry. Variations in the estimates of Plan expenditure are also

explained in this document.

Performance Budget

23. Performance Budgets are prepared and circulated to Members of

Parliament by all Ministries/ Departments dealing with developmental

activities. The Performance Budget presents the budget of the Ministry/

Department in terms of functions, programmes and activities and gives

appraised reports separately in respect of major central sector projects/

programmes estimated to cost Rs.100crores or more. It also includes a

statement on the programmes and performance of the various public

sector undertakings under the Ministry/ Department indicating, among

other things, the capacity installed and utilized, physical targets and

achievements, results of operation, return on capital etc. Performance

Budget serves the management as a tool of administrative and financial

control in the implementation of development programmes.

Public Sector Enterprises

24. A large part of the Plan expenditure incurred by the Central Government

is through public sector enterprises. Budgetary support for financing

outlays of these enterprises is provided by Government either through

investment in share capital or through loans. Expenditure Budget Vol. 1

shows the estimates of capital and loan disbursements to public sector

enterprises for both the current and the following financial years for Plan

and Non-Plan purposes and also the extra-budgetary resources available

for financing their Plans. A detailed report on the working of public

sector enterprises is given in the document titled Public Enterprises. A

report on the working of the enterprises under the control of the various

administrative Ministries' is circulated to members of Parliament

separately. The annual reports along with the audited accounts of each of

the Government companies are also separately laid before Parliament.

Besides, the reports of the Comptroller and Auditor-General; of India on

the working of various public sector enterprises are also laid before

Parliament. .



Commercial Department

25. The Railways and Telecommunication 'services are the principal

departmentally-run commercial undertakings of Government. The

Budget of the Railways and the Demands for Grants relating to Railway

expenditure are presented to Parliament separately. The total receipts

and expenditure of the Railways are incorporated in the Annual

Financial Statement of the Government of India. However, to portray to

actual working of these departments and not inflate either receipts or

expenditure, the expenditure as reflected in the Receipts Budget 8b

Expenditure Budget Vol. 1 and 2 has been taken net of receipts. The

Demands for Grants of the Department of Telecommunications are

presented along with other Demands of the Central Government.

26. The receipts and expenditure of the Defence Department shown in the

Annual Financial Statement are explained in greater detail in the

document Defence Services Estimates presented along with the Detailed

Demands for Grants of the Ministry of Defence.

27. The details of grants given to bodies other than State and Union territory

Governments are given in the statements of Grants-in-aid paid to non-

Government bodies appended to Detailed Demands for Grants of the

various Ministries.

Annual report

28. A descriptive account of the activities of each Ministry/ Department

during the current year is given in the document Annual Report which is

brought out separately by each Ministry/ department and circulated to

Members of parliament at the time of discussion on the Demands for

Grants.

Economic Survey

29. The Budget of the Central Government is not merely a statement of

receipts and expenditure. Since independence, with the launching of

Five-Year Plans, it has also become a significant statement of

government policy. The Budget reflects and shapes, and is, in turn,



shaped by the country's economic life. A background of the economic

trends in the country during the current year will enable a better

appreciation of the mobilization of, resources and their allocation

reflected in the Budget. The document Economic Survey circulated to

members of parliament in advance provides this background. The

Economic Survey analyses the trends in agricultural, industrial

production, money supply, prices, imports slid exports and other relevant

economic factors having a bearing on the Budget.

30. The Budget of the Government has an impact on the economy as a

whole. For a better appreciation of the impact of governmental receipts

and expenditure on the other sectors of the economy, it is necessary to

group them in terms of economic magnitudes, for example, how much is

set side for capital formation, how much is spent directly by the

Government and how much is transferred by Government to other

sectors of the economy by way of grants, loans etc. This analysis is

contained in the document Economic and Functional Classification of

the Central Government Budget, which is brought out by the Ministry of

Finance separately.

Appropriation Bills

31. After the Demands for Grants are voted by the Lok Sabha, Parliament's

approval to the withdrawal from the Consolidated Fund of the amounts

so voted and of the amount required to meet the expenditure charged on

the consolidated Fund is sought through the Appropriation Bill. Under

article 114 of the constitution, no -amount can be withdrawn from the

consolidated Fund without the enactment of such a law by Parliament.

32. The process of detailed consideration of the Demands for Grants is not

completed before the commencement of the new financial year. To

enable Government to carry on its normal activities from Ist April till

such time as the Appropriation Bill is enacted, a Vote on Account is

obtained from parliament through an Appropriation (Vote on Account)

Bill.



ZERO-BASE BUDGETING IN INDIA - A TOOL FOR PLANNING

CONTROLLING AND RATIONAL ALLOCATION OF RESOURCES

1. INTRODUCTION

India - a developing country, at last has adopted the concept of Zero-

Base Budgeting (ZBB) in Budget of its own as well as those of Public Sector

and other Government Organisations. The obvious reason may be to make a

departure from ritualistic, mechanical budgeting which was bereft from

rationale. The ZBB is definitely a better management tool which involves an

operating manager directly in the budgeting process who identifies what are the

different means available for performing a function with identification of clear

incremental effort level. Through this process, the management or owner

becomes aware of consequences of funding or not funding a function or project

and thereby assessing the cost-benefits. The final ranking of decision packages

ultimately identifies the funding direction and priority decision for the year.

Hence, ZBB is an effective Management tool which in addition to planning and

guiding, controlling and motivating, incorporates accountability of the

operating manager preparing the budget scheme, which is to be justified from

"Zero Base".

ZBB is a tool and so it is applicable to all the activities of an organisation

wherever there is discretion and can be applied to all units of all type and sizes.

ZBB even though applied in India for the first time (at least openly by name),

the techniques have been practiced in countries like USA and Europe (to name

some places). But the indirect application of this technique can be traced to

many professionally managed companies in the private sector. In spite of that,

the concept ZBB is still considered to be at a developing stage and therefore

the knowledge development in this field is ever changing and expanding to a

better one.

2. HISTORY OF DEVELOPMENT

In 1964 while preparing the Budget for the US Department of Agriculture,

Zero-base Budgeting was used in the world for the first time by the Secretary.

But their experiment was not so successful because of various problems in

implementing the same and so it was later discontinued. Later, an organisation



named Texas Instruments has since 1969 pioneered the thought of adoption of

ZBB in their annual budget which helped them in adopting Discretionary costs

on a Zero-Base Budgeting system and to implement Zero-Base Budgeting in

selective divisions since 1970.

In 1970, Jimmy Carter, as Governor of Georgia, appointed Peter A. Phyrr as

Consultant and introduced Zero-base Budgeting System in that state after

making some changes and made it more relevant to Planning, Budgeting and

Control functions of the Government. At present many a corporation has

adopted ZBB and is running it to the satisfaction of the organisation.

Zero Base Budgeting as a term may be defined as a process of allocation

according to the projected result. This demands each manager to justify in

detail his entire budgeted activities known as Decision Packages which are

systematically analysed, evaluated and ranked in order of priorities. The focus

here is on Decision' Making with respect to a specific project identified with

effectiveness (both cost and return). Compared to traditional budgeting system,

this new technique involves the Operational Manager more in the entire

planning and decision making activity which automatically secures his

commitments and therefore is implemented better with attainment of corporate

objectives.

3. THE TECHNIQUES

As regard the technique, it is very simple. For every organisation, there are

various kinds of routine and non-routine activities, there are discretionary

expenses and nondiscretionary expenses, there are jobs where `standards can

be determined, there are non-standard jobs. For routine standard, non-

discretionary, activities, ' input-output relationships can be controlled by

standard costing or other cost control system. It is the discretionary cost-non-

routine activities, where input management is required to be done based on

expected output.

There are four specific steps in ZBB technique. These are:

(A) Determining and Analysing Objectives of the Firm,

(B) Identification of Decision Units,



(C) Determining the Decision packages,

(D) Formulating the Decision Packages (each discrete activity)

(E) Evaluating and Ranking the Decision Package by Cost/ Benefit

Analysis,

(F) Implementation through Resource Allocation.

To explain further –

(A) Determining and Analysing Objectives of Firm: To establish an

effective ZBB System, the organisational objective must be laid down

very specifically. There must be strategic planning and operational

planning atmosphere. The top management may

- determine objectives for each organisational entity,

- establish operational guidelines,

- establish acceptable expenditure guidelines for the upcoming

budget year.

Having fulfilled these tasks, the operational Managers identify the

decision units of formulation of Decision Packages.

(B) Identification of Decision Units: A Decision Unit is a tangible activity

or group of activities for which a single manager has the responsibility

for successful performance or achievement. The Decision Unit may be

identified in different ways in different areas under different managers.

A Decision Unit may be the traditional cost centre, a group of people

(e.g. Accounts Staff or Maintenance Staff), projects, R&D, etc. But the

necessary condition is that there should be a measurable output

commensurate with resources committed during the budgeted year.

(C) Determining the Decision Packages: Determining Decision Packages

will lead to preparation of documents identifying the following:

- Description of function,

- Goals hold objectives of the function,

- Specific measures of the performance,

- The benefits to be derived from its funding,

- The consequence to result from its non-funding,

- The projected cost of the package,

- Alternative ways of performing the same activity.



The Decision packages can be either mutually exclusive packages or

incremental packages. The first one will be identifying the alternative

way of performing of the same functions which are ranked according to

priority vide which some packages are chosen and the others are

discarded. The incremental packages identify the sequential level of

output and funding which may be expanded on a particular function.

(D) Formulating the Decision Packages: For formulation, one has to

identify the functions, which may be a department, cost centre, a

division or a project having several separate objectives which may be

related or unrelated. Each objective would call for a separate activity

which can be identified as a decision unit. The decision packages for

each decision unit are formulated at the lowest operational -level with

cost benefit data. The manager of the decision unit must justify his

proposal from a base or zero. Theoretically for each decision unit the

manager must –

(a) Analyse all proposed activities into decision packages,

(b) Identify them as minimum activity or incremental similar activity or

new activity.

(c) Determine a rank-order for alternative decision packages.

Once developed and justified the decision packages are ready for ranking.

(E) Evaluating and Ranking the Decision package by Cost/Benefit

Analysis: This is the most crucial part for the ZBB system. Here all the

packages are ranked in order of decreasing benefit. The Packages are

identified at each successive expenditure level and the disadvantages of

all non-funding the additional decision packages below a cut-off level.

This ranking process begins at the lowest managerial level where the

decision packages are developed which are then forwarded to the next

higher management level where they are merged with other comparable

level decision packages for review and re -ranking with respect to the

proper level of goal of the organisation as perceived at the organisational

level.



The same process is repeated till the final ranking is done at the top most

level and those final ranking becomes the basis for resources allocation,

i.e. for determining the final budget.

(F) Implementation through Resource Allocation: The final decision

packages which forms the basis of resource allocation is implemented

through forecasting the available resources and initiating the action. If

any change in funding decision occurs during the budgeted year, the

ranking of the decision packages can be reexamined to determine

whether re-ranking should be made, whether additional decision

packages can be accepted or whether decision packages in. the process

should be re-evaluated for termination.

Adequate feed-backs must be supplemented for effective operation of

Zero-base Budgeting System in any organisation. There should also be

appropriate discussions amongst the managers regarding the reasons for

those funding decisions.

4. BENEFITS AND LIMITATIONS OF THE ZBB SYSTEM

Zero Base Budgeting is applicable for any kind of organisation whether

industrial, government or services and non-profit making organisations.

Though, this is not a cure of ineffective budgeting system but it provides

significant benefits at the discretionary spending areas. Zero -Base

Budgeting is appropriate for all kinds of functions but less applicable

where no direct cost benefit ratio exists. There is no denying the fact that

every level of management benefits from the ZBB Process and System,

whether sharpening the planning and control tools, or evaluating the

results of different limitations like the time required to implement and

maintain the system that is considered to be uneconomical in many

cases.

In the initial years the process takes a long time which subsequently

reduces as the organisation gains experience. The expenses that are

required for introducing ZBB as compared to conventional budgeting

might be higher in most of the cases. There may be greater amount of

paper work associated with ZBB compared to the conventional system

that also gets reduced over the years. Lastly, the political and other



behavioral characteristics of the organisation may dilute the positive

benefits available from ZBB System.

Ultimately it is the human factor, which has to be taken into

consideration for effective implementation of the system. Once people in

the organisation are convinced of the benefits they will come forward

and extend their cooperation to make it a success.



Internal Audit –Its role and strengthening of Internal Audit

INTERNAL AUDITING

In India major importance is attached to the system of internal audit in

Government. It is recognised that the continuing examination of the accounting

and financial records, of systems and procedures, and of compliance with

stated management policies, are essential elements of internal audit and a

positive help to public administration. Accordingly each ministry and

department of the Union Government has a special unit under the direct control

and supervision of Financial Advisers.

All ministries and departments prepare their own internal audit manuals which

detail the duties and functions of the internal audit unit. The findings of this

unit are submitted to the permanent secretaries of the ministries concerned.

The audit by the CAG also lays a great deal of stress on the adequacy of

internal audit systems. In those instances where the CAG is of the opinion that

these systems need to be strengthened, appropriate comments and

recommendations are made in his reports.



Reconciliation of Balances in the Suspense Head 0/018/65 -Advances PAO

(ORS)

Field Imprest Holders obtain funds for their Imprest in the shape of lump-sum

advances on cash requisitions (IAFF - 1036) either from the Regional

Controllers and their credited sub officers of from the field cashier. The

advances are initially or from the field cashier. The advances are initially

compiled by debit to Code No. 0/018/65 by the Regional Controller and by the

CDA (O), Pune in case of the advances paid by field cashier. Similarly

advances of pay to Army recruit paid by the recruiting officers and those paid

to GHORKHAS by Gorkha Recruiting officers are also compiled to Code No

0/018/65 by the Regional Controllers. These Defence Inter Departmental

schedules will be adjusted by the Imprest Section by contra debit to Code No,

0/018/65.

In addition to the above transactions which are initially compiled to Code Head

0/018/65 by other controllers. Certain other transactions i.e., advance paid to

Army personnel by Naval and Air Force authorities etc. are compiled to Code

Head 0/018/65. It is the responsibility of Imprest Section

To exercise an exhaustive check to see how far the entire amount

compiled initially to code Head 0/018/65 by various controllers

(including this organisation) have been received either by the PAOs or

by the main office.

To arrive at the difference periodically with reference to the

reconciliation statement furnished by the PAOs vide Para 211

To prepare a classified list of the difference which can be explained and

To research the unexplained difference exceeding 0.1%.

Each PAO will receive from EDP Centre list showing amounts debited to the

suspense Head on behalf of the PAO for the clearance of which it is

responsible. They will be compared with the demands (IAFF- 524) separately

notified by the Regional CsDA/ CDA (O) to the PAOs and posted in the

respective Imprest Holders ledger and omissions and errors will be rectified in

communication with the CsDA concerned. The statement of advances of pay to



recruits furnished by the Regional CsDA vide Para 205 will be compared and

similarly dealt with. As payment made by field cashiers to Imprest Holders will

be notified by CDA (O) only in the month following that of payment, and the

amount will be compiled by that officer to 0/018/65 only in that month. These

amounts will appear in the lists from EDP centre for the exceeding month. The

PAOs will therefore, await next month's EDP list and scrutinize them before

making any reference in regard to discrepancies to the CDA(O) Pune

In order to ascertain the balances outstanding under suspense Head (0/018/65),

the Imprest Section will initially prepare a monthly reconciliation statement as

per format in r/o transactions pertaining to Imprest Accounts, and R.O.

Advances in Para 210 Office Manual Part X Vol. I, and Para -22.

Authority: - Para 190 to 210 & Para 20 to 22 Office Manual Part X Vol.-I.

.



DEFENCE PROFORMA ACCOUNT

AND

FOCAL POINT

INTRODUCTORY

The balances of the Defence Services have been created proforma in the books

of the Reserve Bank of India w.e.f. Ist April, 1962. These balances form part of

the balances of the Central Government for regulating the ways and means

arrangements. There is one Central Account in the books of the Reserve Bank

of India for the Defence Services as a whole but in the details working up to

this single account, the total figures for each Controller will be available

separately in the books of the Reserve Bank. The transactions with or on behalf

of the Defence Services arising in the accounts of Post &

Telegraph/Railways/Dept. of Supply in the Ministry of Commerce (stores

transactions) and those relating to High Commission of India, London and ISM

Washington (ILAC & Washington Account) received through Principal

Accounts Officer of Ministry of External Affairs will be adjusted with the

Reserve Bank against the balance of the Defence Proforma Account and of the

Government concerned. These adjustments will centrally be effected by the

Central Accounts Section of the Reserve Bark of India at Nagpur.

The transactions of the Defence Services taking place in the branches and

offices of the Reserve Bank of India and the State Bank of India and its

Associates (other than payments made on the authority of pay orders issued by

Treasury Officers, e.g., payment of pension to Defence Pensioners) will be

taken direct against the Defence Proforma Account. In the case of non-bank

treasuries, however, Defence transactions will be incorporated in the treasury

accounts, and will be accounted for in the settlement Accounts of the Civil

Accountants General concerned.

Note: Amounts pertaining to the Defence Department paid into the Bank

treasuries accompanied by the Treasury Challans under Rule 470 of the

Compilation of Treasury Rules Vol. 1 will be incorporated by the Banks in the

treasury officers' accounts for eventual adjustment through the Civil

Accountant General concerned.



DEFENCE TRANSACTIONS AT BANK TREASURIES

(a) Each dealing Branch of the State Bank of India/its Associate bank

will furnish to the Focal Point Branch concerned every day the daily scroll in

respect of the Defence transactions occurring in their books, duly supported by

the Military Receivable Orders and paid cheques. A copy of the daily scroll

without supporting documents will be sent to the Controller of Defence

Accounts concerned by the dealing branches. The dealing branches of the

Reserve Bank of India will act as the FPB and directly send their main scroll to

the Controller of Defence Accounts concerned duly supported by the

MROs/Paid cheques. In cases where the Associate bank concerned has less

than ten of its branches handling the transactions of a CDA/Defence

Accounting Circle concerned, they will directly remit such transaction to the

Focal Point Branch of the SBI accredited to the CDA/D.A.C concerned. The

procedure of sending scrolls through the focal point branches however is not

applicable to payments of Defence Pension made by Public Sector Banks and

reimbursed by the SBI. Such scrolls will be sent directly to the CCDA (P)

Allahabad by the SBI branches concerned.

(b) There will be separate scrolls for receipts and payments. The

credit scrolls will show receipt number given by the Bank to each M.R.O., the

name of Depositor and its amount. The debit scrolls will stow the cheque

number, date and amount of each cheque. The debit and credit scrolls will bear

separate consecutive serial numbers for each Controller of Defence Accounts

marked DEF/R and DEF/P for Receipts and Payments respectively. The series

will be numbered consecutively for each financial: year i.e. from Ist April to

31st March. This would enable a Controller to detect immediately the non-

receipt of any debit/credit scroll relating to his office.

The Focal Point Branches will prepare Main scrolls based on the daily scrolls

received from dealing branches and allot consecutive serial numbers to their

main scrolls. The Main scrolls duly supported with the daily scrolls of branches

and MROs/Paid cheques will be sent daily to the Controller for their

verification and certification on the Main scroll.

The Focal Point Branches will also send date wise monthly statements (DMS)

(containing details of each day's transactions) to the Defence Accounting



Circles by the third of the following month which will be certified by the latter

and a certified copy returned to the Focal Point Branch within 3 days.

Wherever the FPBs of SBI act as Focal Point Branches for the Associate Banks

also, the main scrolls will be prepared separately for SBI and each of the

Associated Bank concerned such as State Bank of Hyderabad, State Bank of

Travancore etc. Similarly such FPBs will prepare separate DMS for each bank

(viz. SBI. SBT. SBH etc.)

Error scrolls will be prepared by the Focal Point Branches in respect of

discrepancies noticed by them/pointed out by the Defence Accounting Circles

at the time of certi6catior, on main scrolls or the date wise monthly statements.

The daily scrolls will be received in the Accounts Section of the Controller'

Offices. Accounts Section will maintain a Register in manuscript for recording

date-wise the receipt of Bank scrolls (with their number and amounts-debit and

credits separately) and disposal of accompanying vouchers. Separate pages in

the Register will be allotted for each bank. The total of this Register will be

agreed with the monthly total as contained in the DMS and that reflected by the

Central Accounts Section of the Reserve Bank of India, Nagpur. When the

MROs/paid cheques are handed over to the staff concerned for further linking

etc., their initials will be obtained on the Main Scrolls. The receipts and

payments compiled by the CDA for the month will be reconciled with the

DMS total

Compilation to be made under Suspense Head under Defence Proforma

Account, on introduction of FPB Scheme with effect from 1-10-93

Since the Focal Point Branch Scheme is applicable only to Banking

Transactions viz., Cheques & M.R.Os and NOT to inter-Government advices

in order to identify the booking and clearance, the category code 03 may be

prefixed to the following code Heads.

1) R.BI SUSPENSE Unclassified (Code Head 0/020/83) w.e.f. 1-10-93.

2) Public Sector Bank Suspense (Code Head 0/020/76) w.e.f. 1-4-98.



However clearance of the transactions pertaining to the period prior to

introduction of Focal Point i.e. 1-10-93 will continue to be booked with

category code prefix '77' to Code Head 0/020/83.

DEFENCE TRANSACTIONS AT NON-BANK TREASURIES

(a) For Defence transactions at Non-bank Treasuries and payments made at

Bank treasuries through the intervention of the Treasury Officer (e.g. payment

of pensions to Defence pensioners), the paid vouchers and M.R.Os. etc. along

with the Schedules of payments (in duplicate) and receipts (in duplicate) will

be sent by the Treasuries direct to the Controller of Defence Accounts

concerned bimonthly on the 11th and the last of the following month, copies of

such schedules being also sent to the respective Civil Accountants General.

The schedules of payments and receipts will bear separate consecutive series

for each Controller of Defence Accounts. These schedules will be received in

the Accounts Sections and entered in a manuscript register maintained for this

purpose for each Treasury. The total of this Register will be agreed with the

total depicted in the inward monthly settlement accounts of the Accountant

General concerned.

(b) Controllers of Defence Accounts will send one of the copies of the

aforesaid schedules (without the vouchers, etc.) duly countersigned, to the

Civil Accountant General to enable him to verify subsequently the correctness

of the original schedules sent to him direct by the Treasury.

Note: The Treasury Officers will be responsible for obtaining vouchers and for

ensuring the, they are correct in point of form, contain sufficient details and are

arithmetically accurate.

ADVICE OF CLEARANCE

The total amount due to/from P&T excluding Department of

Telecommunication) Railways, Dept. of Supply in the Ministry, of Commerce

(stores transactions) should be advised monthly to the Reserve Bank of India;

Nagpur by the Controllers of Defence Accounts, for adjustment against the

balances of the above Department/Ministry as the case may be. These advices

should be sent to the Central Accounts Section of the Reserve Bank of India,

Nagpur at periodical intervals, viz. on the l0th, the 20th and at the end of the



month, the last one being always marked "Final". As a general rule, the advice

should be based on accepted vouchers or bills.

As far as possible a consolidated advice embodying all the transactions relating

to P&T/Railways/Dept. of Supply during the period should be prepared and

sent to the Reserve Bank of - India. Extracts of this advice to the Bank should

be sent to P&T/Railways/Dept. of Supply concerned along with the supporting

schedules or vouchers.

Monetary settlement in respect of Defence transactions which are adjustable in

the books of AG/P&AO Ministries & Departments of Central Govt. will be in

cash.

MEMO OF CLEARANCE BY THE RESERVE BANK

The Reserve Bank will, on receipt of each advice make the necessary

adjustment in the account of the party concerned and Issue intimation both to

the debtor and to the creditor party to the transactions. It should be watched

that there is no delay in the receipt of such intimations from the Bank.

MONTHLY SETTLEMENT ACCOUNT

(i) As soon as the accounts of a month are closed, the Controller of

Defence Accounts shall prepare and send to the Accounts Officer,

P&T/Railways/Dept. of Supply a monthly settlement account in the prescribed

form for the amounts booked in his account working up to the total net debit or

credit advised to the Reserve Bank during the month. This account will cover

only those items in respect of which the initiative rests with the Defence

Department.

(ii) Similarly, a monthly settlement account will be received every month from

the Accounts Officers I.e., Railways/P&T, Dept, of Supply, Ministry of

External Affairs (in respect of London and Washington transactions) with

which the Defence has an account, in respect of items for which the initiative

rests with them.

The dates as prescribed will be observed for rendering the monthly settlement

accounts mentioned above. The dates of despatch by Defence Accounts



Officers are 5th of the second month for Accounts from April to February, 5th

May for March preliminary and 10th Aug for March Supplementary

corrections

ACCOUNTS HEADS

The following heads should be operated for adjustment of transactions under

the Defence Proforma Account:

"L"-Suspense & Miscellaneous

(a) Reserve Bank Suspense-Classified

(b) Reserve Bank Suspense-Unclassified.

(c) Remittance into Banks/Treasuries

(d) Cheques & Bills

(e) Reserve Bank Deposits

ADJUSTMENTS OF THE TRANSACTIONS RELATING TO THE

MONTHS OF FEBRUARY AND MARCH

Special steps should be taken for the prompt clearance of transactions relating

to the accounts of the last two months of the year, viz. February and March.

The books of the Reserve Bank for the month of March will be closed by the

25th April, after which no transaction involving inter-Government adjustments

will be cleared by the Bank in that March's account. To facilitate early

settlement of the accounts for March, adjustments which originate in the

accounts for February and earlier months should be completely settled and

advised to the Reserve Bank in good time before the end of March. Adjustment

in the month of March should be advised to the Reserve Bank to the extent

possible before the expiry of that month and what is left over should be

communicated to the Central Accounts Section, Reserve Bank on the 5th, 15th

and 25th April by telegram if necessary (or on the previous dates, If any of

these dates is a holiday). All telegrams sent by the Controller by the 25th April

will be accepted by the Central Accounts Section of Reserve Bank of India,

Nagpur for incorporation in the accounts of the preceding financial year. The

last advise to be sent by the 25th April should include a certificate by the



Controller of Defence Accounts that no further adjustment will be intimated to

the Bank in respect of the financial year just ended, Any further adjustment

pertaining to the preceding year should be taken into the accounts of the

subsequent years but occasions for such postponement should seldom arise.

Note: If any item of large magnitude (say, above Re. 1, 00,000) affecting other

department of the Central Government which is not incorporated in the

Defence Proforma Accounts of the same year comes to light after the accounts

of Me financial year are closed by rite Reserve Bank, the details of such

transaction together with an explanation of the circumstances which led to the

delay will be furnished by the Controllers to the Controller General of Defence

Accounts. After obtaining the permission of the Controller General of

Accounts for carrying out adjustment of those transactions they will be

accounted in the accounts of the same financial year, outside the books of

Reserve Bank by correction to the "Reserve Bank Deposits-Defence" on a

proforma basis.



EXCHANGE ACCOUNTS BETWEEN CONTROLLERS OF DEFENCE

ACCOUNTS

&

SETTLEMENT ACCOUNT

GENERAL

The Defence Exchange Accounts will be operated for a adjustment of

transactions of the following types only. In all other cases, the receipts and

charges pertaining to Defence Services will be finally compiled in the books of

the Controllers by whom they are realised or incurred: -

(vi) Transactions pertaining to Debt and Remittance heads.

(vii) Transactions for the settlement or adjustment of which a

particular Controller is centrally responsible e.g. ILAC

transactions which are settled centrally by the CDA (HOrs);

transactions which cannot be booked to final heads by different

CsDA such as GPF recoveries etc.

(viii) Imprest Advance Payments to Naval/Air Force personnel from

Army sources and vice versa. Payments made by Regional

Controllers, CDA (Navy), CDA (Air Force) and CDA (O)

towards Army Imprest are not to be passed on through Defence

Exchange Accounts; such amounts will be transferred annually

to the books of the CDA (ORs) concerned by the EDP Centre

Delhi with reference to prefixes operated to code head

0/018/65 such as 05, 11, 17 to identify CDA (ORs) South

North and Central respectively.

Note 1: Expenditure debatable to locally controlled heads incurred by one

Controller on behalf of another (excepting the expenditure relating to M.E.S.

which will continue to be passed on through Defence Exchange Accounts) will

be finally brought to account against the relevant Service Heads concerned by

the Controller incurring the expenditure instead of debiting it through Defence

Exchange Accounts against the Controller on whose behalf the expenditure is

incurred. A monthly statement of such expenditure will, however, be furnished

by the former Controller to the latter Controller to enable him to watch the

progress of expenditure against the allotment.



Note 2: Adjustment on account of bulk issue of stores and equipment from one

service to another (i.e. between Army, Air Force and Navy), together with the

cost of incidental charges (viz. Rail, Freight, Sea Freight etc) incurred thereon

by the supplying services will be made by the Controller of the receiving

service in his books (for exceptions see notes 3, 4, and 5). Such inter-service

transactions will be adjusted as "deductions" from expenditure under the

relevant "deduct head" regardless of the year of transaction.

Note 3: All Issues from Ordnance and Equipment Factories to Army, Navy and

Air Force will be priced and straightway debited to Service heads of Army,

Navy and Air Force by contra credit to deduct head of O.F. Organization by the

Accounts Officer attached to each Factory.

Note 4: The provision of Note 2 above does not apply to issue of stores and

equipment to Institutions like the Joint Services Wing of the National Defence

Academy for which no inter-department adjustment will be made for the

reason that although such institutions are placed under the administrative

control of any one of the Services, they are intended and used for the benefit of

all the three Services.

Note 5: Transfer-, of unserviceable and salvaged stores between Army, Navy

and Air Force will be made without any financial adjustment.

Note 6: 'Services' rendered by Army to the Air Force and the Navy and vice

versa are treated as free. For instance, no inter-department adjustments are to

be made in respect of the costs of recruiting, accounting establishments,

medical treatment, services rendered by Repair Organisations, transport

provided by Army Service Corps from Army sources, issue of stock mixtures,

sera, vaccines and emergent requirements of expendable medical stores

obtained from hospitals for administration to patients etc.

Note.7 : Advances of Pay and Travelling Allowances to individuals transferred

from the payment of one Controller to that of another will normally be finally

adjusted in the accounts of the Controller who pays the advances, unless the

transaction falls under clauses (ff) or (iii) above. A note of the advances will

however be made on the Last pay certificates of the individuals or

communicated through I.A.F.A. 524 so that the Controller in whose payment

they are transferred may effect recoveries from them



Exceptions

Payments on account of the following common services will be charged to the

respective services (Navy or Air Force Estimates) as the case may be:

(a) Pay and Allowances, transportation charges, ration and equipment

issued in replacement (i.e. other than initial issues or issues to complete

deficiency of authorised scales) and miscellaneous charges, in respect of

Ministry of Defence Security Corps Platoons serving with Navy and Air Force.

(b) Departmental charges covering the cost of supervisory establishments,

and tools and plants at 112% and 1.1% respectively on the cost of works

executed by the M.E.S. for the Navy and Air Force.

Note 8 : Amounts of travelling allowances which are paid in advance or on

final adjustment of the travelling allowance bills, to Officers and others of the

Defence Accounts Department transferred under the orders of the Controller

General of Defence Accounts from the office of one Controller to that of

another and which are to be met from the Reserve Fund at the disposal of the

Controller General of Defence Accounts will be finally adjusted in the

accounts of the Controller by whom they are paid and communicated to the

Controller General of Defence Accounts through quarterly statements.

Advances of travelling allowances paid will, however, be intimated to the

Controllers who finally deal with the travelling allowance bills.

Note 9: Amounts paid by Military Treasure Chest Officers on letters of

authority will, subject to the exceptions noted in the above Para, be finally

adjusted in the accounts of the Controllers in whose audit areas the Treasure

Chests are located. The amounts paid will, however, be intimated to the

Controller concerned through Demand Statements, etc. The amounts paid by

Military Treasure Chest Officers on cheques issued by Controllers other than

those in whose audit areas the Treasure Chests are located, will be debited to

the Controller concerned through the Defence Exchange Account.

Note 10: The expenditure on railway warrants and credit notes will, subject to

the general exceptions enumerated above, is finally adjusted by the Chief



Controller of Accounts (Factories) in his own books against the appropriate

service heads. The charges in respect of credit notes for conveyance of MES

stores for works will be debited by the Chief Controller of Accounts (Factories)

to the regional Controller concerned through the Defence Exchange Account.

Sea and inland water charges as well as the cost of road warrants will, unless

covered by Note 2 above, be finally adjusted by the Controllers incurring the

charges in their own compilation. The Controllers will, however, send to each

manufacturing establishment by the 15th of the month following each quarter,

a statement showing particulars of the charges pertaining to it which have been

compiled by them during the preceding quarter.

As regards rail charges audited and authorised for payment on I.A.F.A. 468,

etc. by, and recoveries effected at the instance of the Chief Controller of

Accounts (Factories); the Controllers will finally compile those charges or

recoveries in their own compilation under the heads indicated thereon. EDP

Centre Delhi will furnish to the Chief Controller of Accounts (Factories)

monthly a copy of All India compilation in respect of the detailed head for Rail

charges, to enable him to take into consideration the total amount booked under

that head in framing budget and other periodical estimates.



ID SCHEDULES ACTION BY THE ORIGINATING CONTROLLER'S

OFFICE

A Defence ID Schedule in I.A.F. (CDA) 338-A is prepared for each original

item compiled to Defence Exchange Account Head, with reference to the

particulars shown in the original vouchers, punching media etc. It is prepared

in a Controller's office in quintuplicate by the Audit/Accounts section

concerned at the time of preparation of the Punching Medium by that section.

The distribution of the five copies of the DID Schedule will be as under –

Three copies to the responding Controller concerned. One copy to the

Accounts Section of the originating Controller, and another one as office copy.

The Accounts section of the originating CDA will verify whether all the DID

Schedules in question have in fact been floated by the various sections of the

CDA with reference to the copy of DID Schedules sent to them by the various

Audit Sections at the time of floating the schedules. The omissions if any, will

be got rectified immediately. A certificate in this regard should be put up by

the Accounts Section to the JCDA every month.

(a) To enable the Controllers to ensure that no omissions occur in preparation

of schedules In respect of original items, EDP Centre, Delhi will furnish to

them the originating 'DID Schedules Report by 15th of the month following ,

that , in which: the Defence Exchange Accounts Heads in question were

operated. A floppy of the originating DID Schedule Report will also be sent by

EDP Centre New Delhi to EDP Centre, Meerut. While preparing 'tie lists, the

EDP Centre New Delhi will indicate the DID Schedule Numbers with

reference to the compilation, the DIDS bearing 15 digit numbers showing the

originating CDA, Section Number, Class of Voucher, Voucher Number, the

month and the year.

(b) All Sections of Controller's Office will operate separate Punching Media

for each transaction with a Controller so that the responding Controller can

settle these transactions, individually and clear the schedules promptly. As

regards AAOs CE's consolidated Punching Medium, which would normally

Involve floating of 2 or more schedules in respect of amount booked against

exchange Account Head of a particular Controller, the AAO's GE will prepare

an abstract of such schedules indicating all details of original debit/credit and

forward the same along with the original consolidated Punching Medium to



EDP Centre Delhi, who will watch for the same and allot DID Schedule

numbers accordingly i.e. one DIDs for each item of the abstract.

Note 1: DID Schedules need not be prepared in respect of items which do

not pertain to Defence Exchange Account Heads but have been erroneously

compiled thereto and which consequently appear in the detailed lists sent by

the EDP Centre. In such cases the section concerned will be asked to withdraw

the amount and to book it to the proper head. Such withdrawals will be

classified as minus receipt and minus charge as the case may be. The original

and rectification DIDS will be sent together to the responding CDA through a

D.O. letter, who will respond both the schedules by operating the Exchange

Account head per contra adjustment to code head 0/020/72.

Note 2: If it is found that an item, for which a schedule has been prepared, does

not appear in the detailed lists received from the EDP Centre, the matter should

be settled through separate communication with the EDP Centre.

The original; duplicate and another copy of schedules together with the

supporting vouchers, will be sent by Audit Section of the originating Controller

without waiting for the sectional compilation, to the Accounts Section of the

responding Controller who will enter them in a control register.

It is the responsibility of the Audit Section concerned to, ensue that all DID

schedules floated by them are duly supported by vouchers, complete details of

transactions, Personal Number/Account Number wherever applicable, imprest

Account Number etc.

ACTION BY THE RESPONDING CONTROLLER'S OFFICE-

METHOD OF ADJUSTMENT OF DEFENCE ID SCHEDULES

The responding Controller is responsible for the prompt adjustment of all ID

Schedules sent to him.

Original credit/debit is adjusted by responding debit/credit, plus or minus as the

case may be, to the code head allotted for affording response to the originating

Controller, by contra adjustment to the code head to which the transaction

pertains. Each schedule -should be responded to separately.



The adjustment is recorded on part B of the original, duplicate and the third

copy of Defence ID Schedule. The original copy of the schedule thus

completed which will be treated as a punching medium will be sent to the

EDP/DDP Centre concerned and the duplicate copy retained as an office copy.

The third copy will be sent to the DDP centre for generating the responding

schedule report. A floppy of the responding side report will also be sent to EDP

Centre Meerut. A print out of responding side report will also be sent to the

originating Controller concerned to enable them to monitor the adjustment of

DID schedules floated by them. An original item is always responded to

through Class 8 voucher except in the case of M.E.S. transactions. Where such

adjustment is made through Class 4 vouchers. The AAO GE M.E.S. should

invariably send to the EDP Centre concerned a simple statement of the Defence

I.D. Schedules adjusted in a month, along with the monthly consolidated

punching medium for the month.

If any transaction is not adjustable either wholly or In part for any reason viz.

want of supporting documents, sanction, details etc. the Defence ID Schedule

in question should not be retuned to the originating Controller but adjusted in

full and contra adjustment made by re-debit/re-credit of the whole or part

amount (according as it is wholly or partly to be rejected by him) to the code

head of the originating Controller allotted for passing on original items. Such

contra adjustment is treated as an original item for the purpose of preparing

Defence Schedules to the parties concerned.

CLEARANCE OF OUTSTANDING ITEMS

Based on the floppies received for the originating DID schedules from the EDP

centre Delhi and the responding side report from the DDP centres the list of

items outstanding under Defence Exchange Account heads will be prepared by

the EDP Centre Meerut. The Defence ID Schedules far a month received from

the originating Controllers and the Defence ID Schedules shown in the lists of

responding items are paired by mechanical process on the basis of ID Schedule

numbers and the unpaired items with full details are listed out section-wise by

the EDP Centre Meerut.

(a) With a view to facilitate the responding Controllers to obtain the

wanting UIDS, a list or originating items which Is printed and sent to the

originating Controller will also be sent to responding Controller.



(b) A summary of unpaired items (originating as well as responding) will be

prepared by EDP Centre, Meerut and sent to Controllers thrice in a year as

shown below. On Its receipt it should be put up to the Controller for his

information regarding the progress ct clearance of the Defence Exchange

Account items. This serves the purpose of a progress register.

List for manual linking

Item of originating DIDS responded to correctly but which cannot be linked

through mechanical process due to exhibition of incorrect DID Schedule

Number, responded through more than one DID Schedule etc. are to be listed

and sent to EDP Centre for manual linking. Incorrect responses are to be

rectified immediately on receipt of outstanding lists.

Normally an item should not appear as outstanding in the second list received

from EDP Centre. If, however, such an item is found to appear in the second

list, it should be put up to CDA/Jt.CDA for conducting a special enquiry with a

view to effecting its clearance.

If a Defence I.D. Schedule for an item appearing as outstanding in the second

successive list has not been received for any reason, in spite of Issue of

reminders the item should be immediately re-debited/re-credited to the

originating Controller and a Defence I.D. Schedule issued.

ACCOUNTS FOR MARCH SUPPLEMENTARY AND MARCH

SUPPLEMENTARY CORRECTIONS

The Defence Exchange Accounts for March Supplementary and March

Supplementary Corrections should include only responding entries and no

original items should appear except with the consent of the other party to the

account.



DEFENCE EXCHANGE ACCOUNTS

Under the mechanical system, no monthly Defence Exchange Account, as

such, is prepared and exchanged between parties to the account. As stated in

the preceding paragraphs, only

I.D. Schedules are prepared for original items, and the EDP Centre Meerut,

centrally links the original and responding transactions by mechanical: process:

ANNUAL ABSTRACTS OF PROGRESS REGISTERS

An Annual Consolidated Abstract of Progress Registers In respect of Exchange

Accounts between the Controllers of Defence Accounts embodying all

outstanding items remaining outstanding or, 31st March is prepared after the

close of financial year by the EDP Centre Meerut

To enable the EDP Centre to complete proforma and submit the complete

report to the CGDA by the 20th Dec, CsDA will furnish a statement to that

office showing heads of account which will be affected by adjustment of

outstanding DID Schedules (separately for receipts and charges) to reach them

latest by the 15th December.

The EDP Centre, Meerut will send the extracts to the respective Controllers of

Defence Accounts concerned who will send their appreciation report direct to

the CGDA New Delhi by 31st January of the financial year following the year

to which the report relates giving the reasons for the outstanding and action

taken for their clearance.

In respect of items over one lakh detailed information relating to the

outstanding and the position regarding clearance should be shown against each

item.

Copies of the Annual Abstracts are also sent by EDP Centre Meerut, to the

Controllers concerned for information regarding the state of outstanding under

Defence Exchange Account transactions in their offices.



Review of Balances

General

The accounts of the year are not complete until the balances upon the Ledger

under the Debt and other balanced heads have been verified. Accordingly, after

the books of the year have been closed, an explanatory statement of closing

balances, called the Review of Balances, will be prepared in the form of a

general report which will take up each of the heads in succession. The report,

which will be typed/printed through computer should contain: -

(1) A statement of each ledger balance which is to be explained.

(With year-wise break-up)

(2) An explanation of the nature and condition of the liability

involved in ft.

(3) A statement of the nature of the detailed accounts kept of the

transactions connected with it; and how far the final results of

these detailed accounts work up to, and agrees with, the balance

on the ledger.

(4) Information as to whether the person or persons by whom the

balance is owned or from whom it is due admits its correctness

and, if they do not, where the difference lies. This does not apply

to such items as Deposits.

Part of the explanations under heads (2) and (3) wound necessarily be the same

year after year and there may not be any real necessity to repeat every year the

same information, for which reference may be given to a previous report.

Particulars of each sub head under the Head "Deposits," "Advances",

"Suspense Accounts" and "Loans and Advances by Central Government"

should be given separately in the Review.

The Review, which will contain final figures of the year, will be subjected to

test audit by the test audit staff and will bear an audit certificate by the DADS

concerned. Since the report is normally required by CGDA by the 3rd week of

August (the exact date is being intimated by CGDA, every year), the review

should be made on the basis of the figures appearing in the Printed



Compilation of March Supplementary Corrections which is normally available

by the end of July every year. An un-audited copy of the report will be sent to

CGDA, by due date, simultaneously supplying to the DADS, 4 copies of this

report for their scrutiny. Audited copy of the report will be sent later as and

when the report is received back from DADS, duly endorsed with an audit

certificate.

Necessary correction to the above report will be issued if necessary, after

receipt of printed compilation of March (Supplementary Correction Manual

Accounts). This will also be got audited on the above lines and correction sent

to CGDA.

On receipt back of Review from the Jt. Director of Audit, it should be typed on

the paper of a foolscap size. A clear copy typed on one side of the paper should

be forwarded by name to the Officer-in-Charge, Accounts Section, CGDA

New Delhi. Review of. Balances (DS) along with statement No. 5 and 13 are

also to be rendered to the CGDA (so as to reach him by prescribed date

positively, each year). Although the report is due on the 3rd week of August, a

large part of the work can and should be done even before the completion of

the final account for March. The Controller will personally satisfy himself as

regards the compliance of this requirement.

Note: Normally the Review of Balances duly audited by the Joint Director of

Audit of Defence Services should be sent to the CGDA by the date. In case

some delay is expected for want of Test Audit Certificate, an un-audited copy

should invariably be sent so as to reach the CGDA by the third week of August

positively each year. The audited copy will be sent to the CGDA and all

concerned as soon as received from the test audit authorities.

As soon as the Review has been issued, a list should be drawn up of all the

cases in which further action is required. The Controller General of Defence

Accounts will be informed in the first week of January following, of any

subsequent reconciliations which may be effected and acknowledgements

which may be received subsequent to-the date of issue of the Review,

references being invariably made to the paragraphs of the Review affected.

Note: Discrepancies that may remain unsettled after the submission of the

supplementary report should be carefully watched and their reconciliation



reported to the Controller General of Defence Accounts in the first week of

April and the first week of July of the second year following that to which they

relate. As a rule, discrepancies reported in the Review of Balances of one year

should be settled before the Review of the next year is submitted. In the rare

case of any discrepancies still remaining unsettled the Review for the next year

should differentiate between the discrepancies of the year and of those relating

to the previous years, and should mention separately the action taken in respect

of each. A similar differentiation should be made between the outstanding

balances relating to the year of Review and those relating to previous years and

any delay in the recovery of old Items should be specially explained. To

facilitate such break-up category prefix 77 is operated for earlier year's

balances.

DETAILS TO BE RECORDED IN THE REVIEW

The Controller is responsible that details, working up to the balanced heads in

the ledger and agreeing with them are maintained of the amounts due to, or by

Government. He will therefore review the closing balances on his books and

ascertain if they agree with recorded details. The Controller will clearly state in

the Review that he has ascertained by personal inspection that the balances on

the books agree with the aggregate of the details recorded, and that the

recoveries of advances have been regularly effected.

The Controller will also state against the balances under "Permanent

Advances" and "Loans and Advances by Central Govt." that the balances

exhibited on the 31st March have been accepted as correct by the parties

concerned and that proper acknowledgements have been obtained from each

and recorded. In every case in which it has not been found possible to obtain

such acknowledgements, the reasons for the failure must be explained. With

this end in view, suitable steps will be taken in time to obtain the necessary

acknowledgements annually from each of the individuals concerned. In regard

to "Permanent Advances" such action should be taken early in April each year.

Note: Acknowledgements of the balances on 31st March are not required to be

obtained in cases where such balances have been liquidated by the time Review

of balances for that financial year is submitted.



Under the head "Regimental and other loans-Defence" the authority for each

loan/advance and the precise method of verification of the balance will be

given. It should also be stated whether the conditions of each loan have been

fulfilled. All items which are outstanding at the end of year, but which have

been adjusted/cleared in the year following, prior to the submission, of the

Review must be indicated in a food-note connected with these items.

In the case of Provident funds, it should be stated in the Review whether the

balances were communicated to the subscribers.



Procurement and Control-Overview

Some of the important features of Defence Procurement Procedure are:

(a) All major decisions pertaining to the procurement process to be taken

simultaneously for reducing the timeframe for acquisitions;

(b) Enhanced transparency by placing the generic requirements of the Services

on Ministry of Defence website and generating vendor registration through

Internet;

(c) Increased transparency in the conduct of field trials;

(d) 'Integrity Pact' made compulsory for all contracts above Rs.100crores;

(e) An 'Offset' obligation for all contracts above Rs.300crores.

The Defence Procurement Procedure - 2006 provides comprehensive policy

guidelines for all Capital acquisitions for the Armed Forces. It has been placed

on the Ministry of Defence

PURCHASE PROCEDURE

Purchase is an important administrative function in the maintenance of

an office as an office or a production unit to keep, producing items for which it

is set up. In relation to office it is expenditure or purchase out of office

contingency or I&M grant and in relation to production unit it is purchase out

of purchase grant for stores.

2. While discussing the purchase procedure it may be stated that these

follow the pattern that a common man of ordinary prudence would observe for

making purchases for his own or for his family. These are briefly:-

a) Need: Whether the purchase is really necessary

b) Fund: Whether necessary money is available for making the

purchase



c) Price: Weather the price being demanded or charged is

reasonable

d) Quality: Whether the quality of item being purchased is

satisfactory / guaranteed and compatible with the price

3. Similarly for any purchase or for that matter any expenditure from

public fund, the standards of "Financial Propriety" as laid dawn in Rule 6 FR

Pt.-I trust is kept in view and satisfied. These standards are: -

(i) Every public officer should exercise the same vigilance in. respect of

expenditure incurred from public money, as a man of ordinary prudence would

exercise in respect of expenditure of his own money.

(ii) The expenditure should not be prima-facie more than the occasion

demands.

(iii) No authority should exercise its power of sanctioning expenditure to

pass an order, which will be directly or indirectly to its own advantage.

(iv) The amount of allowances much as travelling allowances granted to

meet expenditure of a particular type should be so regulated that an allowance

is not on the whole a source of profit to the recipient.

(v) Public money should not be spent for the benefit of a particular

person or section of the community.

4. Now coming to the actual purchase procedure it may be stated that it

starts from "Need", i.e. before resorting to purchase necessity for the purchase

has to be established and accepted by the authorities concerned. For purchases

out of office contingency the necessity is communicated by the user sections /

officers to the Administration Section. The Administration Section examines

these proposals from (a) necessity angle (b) authorisation and (c) availability of

fund. Once these conditions are satisfied and it is decided to resort to the

purchase all items of similar nature will be clubbed and purchases will be done

as per the following procedure.

5. For any purchase in Govt. department or for execution of any work

action has to be initiated for obtaining tenders. The tenders are of the following

types:

a) Open or advertised tender.

b) Limited tender i.e. direct invitation to a limited number of firms.



c) Single tender i.e. invitation to one firm only.

d) Negotiated tender i.e. through negotiation with one or more firms.

6. (a) If the estimated value of the articles to be purchased is Rs.

50,000/- or above, open tender system should be followed by inviting tenders

through Indian Trade Journal and where necessary by advertisement in news

papers through DAVP (Directorate of Advertising and Visual Publicity).

(b) Limited tender system may also be adopted subject to the conditions

in Para 36 of Annexure to Rule 102 (1) of General Financial Rules where the

estimated value of demand is not less than Rs. 50,000/-.

(c) Single tender system is followed for purchase of items of proprietary

nature.

7. The notice inviting tenders should contain the following particulars.

a) Particulars regarding tender documents.

b) Conditions of tender offer-.

c) last date for issue under forms and receipt of sealed tenders.

d) Name of authority who has the right to accept the tenders, and

e) Date and time of opening tenders.

8. a) All the sealed tenders received should be kept in the safe custody of

the officer who has invited the tenders.

b) Tenders submitted after the due date and time specified in -the tender

enquiry should not be accepted. But these should be kept as "late tender" and

may be examined by the "Tender Purchase Committee", to arrive at a decision

to "Re-tender", "Price negotiation" etc., if need for the same in felt.

9. The tenders should be opened by a board of officers at the prescribed

hour of the date and place in presence of the tenderers who may attend the

tender opening.

10. After opening of the tenders a comparative statement will be

prepared by the same board, record its recommendations and submit to the

competent authority for accepting the tender.



11. In case the lowest tender is not accepted the reasons are to be

recorded in writing and prior approval of next higher authority is obtained for

accepting a higher tender.

12. At the factory level all purchases above Rs. 50,000/- in each case are

considered by a Tender purchase Committee. There are four levels of T.P.C. as

shown below depending on the value of the tender. Association of "Finance

representative" i.e. Local Accounts is mandatory in all such TPCs.

Level Chairman Accounts member Value

I G.M CF&A (Fys) /JCF&A (Fys) Exceeding

20lakhs up to 50

lakh.

II Jt. G.M JCF&A/ DCF&A/ Exceeding 10

ACF&A lakhs up to

20 lakhs.

III Dy. G.M DCF&A/ ACF&A / AO Exceeding

4 lakhs up to

10 lakhs.

IV W.M A.O up to 4 lakhs.

13. While scrutinizing the tenders by TPC / Board of officers the

following important points should be kept in view.

(i) What is the last purchase price?

(ii) Whether the lowest rate now obtained compares reasonably with the

last purchase price taking into account the normal escalation in prices.

(iii) Whether the rate is prima-facie abnormally high or low. In both

cases it should be treated as "Freak Rate" and rejected and if necessary suggest

re-tendering.



(iv) What are the time / place / mode of delivery offered in the lowest

tender and whether the same conform to requirement.

(v) The capacity of the firm in supplying the material has been

established /verified.

14. Once the tenders are considered and finalised by the board of officers

/ TPC after due examination and accepted by the competent the successful

tendered should be intimated about the acceptance of his under and supply

order / work order for supply of stores / execution of work respectively should

be placed on him.

15. The supply order should be specific in regard to stores to be

supplied. Qty., rate, total value, time, mode, place of delivery, mode of

payment etc. as the S.O. would form the basis of all future dealings with the

contracted party and contesting in Court of Law if necessity arises.

16. On receipt of stores against a store these should be checked as to its

quality, specification etc. with references to the supply order and endorsed s

such in the bills / challans etc. The stores so received should be taken on charge

and endorsement to that effect be made in the bill before forwarding it to the

payment section. The payment due against the supply order should be made

thereafter promptly and in any case as per terms of payment as stipulated in the

supply order.

17. While the above general rules and procedures are applicable to all

purchases there are some special provisions in respect of purchase of certain

items.

(A) Purchase of Typewriter

Purchase of typewriters should be within the approved scale and the

order for Purchase should be placed only on the firm holding DGS&D rate

contract.



(B) Local Purchase of Stationery

Stationery is required to be supplied by Govt. Stationery Depot.

Local purchase can be resorted to within the delegated powers only after

obtaining NAC from the Stationery Depot. Purchases should be made from

Consumer Co-operative Stores / Samavayikas / Super Bazars etc.

(C) Local Purchase of Furniture

Can be purchased locally by the Head of Departments / offices (Within

their delegated powers, under the Delegation of Financial Powers) Rules

subject to the observance of general policy of according purchase and price

preference to the products of Cottage and Small Scale Industries. Certain items

like Steel Racks, Steel Chairs, Steel Stools, Steel Desks, Steel Shelves and

Steel Almirahs are exclusively reserved for small-scale sector.

(D) Repair to Typewriters

(i) Heads of Departments are authorised to incur expenditure on

servicing, maintenance and repair and replacement of parts of typewriters in

their own and subordinate offices to the extent of powers delegated to them.

(ii) Repairs etc. should be entrusted to the dealers authorised by the

DGS&D / Govt. of India Stationery office, Calcutta and the charges for spare

parts should be at the rates approved from year to year.

(iii) Servicing contract may be entered into at the approved rates

and in other cases Heads of Departments may enter into necessary contracts on

competitive basis.

CONTRACT

18. Contract is recognised mode for obtaining supplies and services in

Govt. while contract is concluded for obtaining stores the requirements of

which is regular it is generally concluded for works Services. While concluding

contracts the following basic and guiding principles must be followed.



a) All contracts should invariably be in writing.

b) Quantity of work to be done or material to be supplied and time with

in which the work or the supply is to be completed should be specifically

mentioned.

c) Terms of contract should be precise and definite.

d) The standard form of contract is generally adopted.

e) The contracts entered into should not involve any uncertain liability.

f) Contract should be signed by both the parties to the contract before

commencement of work

g) Wherever considered necessary an escalation clause for statutory

increase in prices / duties etc. should he provided in the contract.



CVC Guideline-Observation of Procurement

No.005/VGL/4

Government of India

Central Vigilance Commission

Satarkta Bhawan, Block ‘A’,

GPO Complex, INA,

New Delhi- 110 023

Dated the 1st September 2006

Circular No. 31/9/06

Subject: Posting of details on award of tenders/contracts on websites/bulletins.

The Commission, vide its orders of even number dated 16.3.2005, 28.7.2005

and 20.9.2005, had directed all organisations to post every month a summary

of all contracts/purchases made above a certain threshold value on the websites

of the concerned organisations, and it was specified that the proposed threshold

limits would be acceptable to the Commission as long as they covered more

than 60% of the value of the transactions every month in the first instance, to

be revised subsequently after the system stabilized. The threshold values as

decided by the organisations, were also to be communicated to the Commission

separately for its perusal and record. CVOs were required to monitor the

progress in this regard and ensure that the requisite details were posted

regularly on respective websites. They were also required to incorporate the

compliance reports in this regard in their monthly reports.

2. The Commission has taken serious note that the aforementioned instructions

are not being adhered to by the organisations. CVOs are, therefore, once again

advised to ensure that details of the tenders awarded above the threshold value

by the organizations are uploaded in time on the organisation’s official website

and are updated every month. The position in this regard should be

compulsorily reflected in the CVOs monthly reports to the Commission. CVOs



should also specifically bring to the notice of the Commission, any violation of

this order.

3. Please acknowledge receipt and ensure due compliance.

(V.Kannan)

Director

(i) All Secretaries/CEOs/Head of Organisations.

(ii) All Chief Vigilance Officers



No.005/CRD/012

Government of India

Central Vigilance Commission

Satarkta Bhawan, Block ‘A’,

GPO Complex, INA,

New Delhi- 110 023

Dated the 3rd March, 2007

Circular No. 4/3/07

Sub: - Tendering process - negotiations with L-1.

Reference is invited to the Commission’s circulars of even number, dated

25.10.2005 and 3.10.2006, on the above cited subject. In supersession of the

instructions contained therein, the following consolidated instructions are

issued with immediate effect:-

(i) As post tender negotiations could often be a source of corruption, it is

directed that there should be no post-tender negotiations with L-1, except in

certain exceptional situations. Such exceptional situations would include,

procurement of proprietary items, items with limited sources of supply and

items where there is suspicion of a cartel formation. The justification and

details of such negotiations should be duly recorded and documented without

any loss of time.

(ii) In cases where a decision is taken to go for re-tendering due to the

unreasonableness of the quoted rates, but the requirements are urgent and a re-

tender for the entire requirement would delay the availability of the item, thus

jeopardizing the essential operations, maintenance and safety, negotiations

would be permitted with L-1 bidder(s) for the supply of a bare minimum

quantity. The balance quantity should, however, be procured expeditiously

through a re-tender, following the normal tendering process.



(iii) Negotiations should not be allowed to be misused as a tool for bargaining

with L-1 with dubious intentions or lead to delays in decision-making.

Convincing reasons must be recorded by the authority recommending

negotiations. Competent authority should exercise due diligence while

accepting a tender or ordering negotiations or calling for a re-tender and a

definite timeframe should be indicated so that the time taken for according

requisite approvals for the entire process of award of tenders does not exceed

one month from the date of submission of recommendations. In cases where

the proposal is to be approved at higher levels, a maximum of 15 days should

be assigned for clearance at each level. In no case should the overall timeframe

exceed the validity period of the tender and it should be ensured that tenders

are invariably finalised within their validity period.

(iv) As regards the splitting of quantities, some organisations have expressed

apprehension that pre-disclosing the distribution of quantities in the bid

document may not be feasible, as the capacity of the L-1 firm may not be

known in advance. It may be stated that if, after due processing, it is discovered

that the quantity to be ordered is far more than what L-1 alone is capable of

supplying and there was no prior decision to split the quantities, then the

quantity being finally ordered should be distributed among the other bidders in

a manner that is fair, transparent and equitable. It is essentially in cases where

the organisations decide in advance to have more than one source of supply

(due to critical or vital nature of the item) that the Commission insists on pre-

disclosing the ratio of splitting the supply in the tender itself. This must be

followed scrupulously.

(v) Counter-offers to L-1, in order to arrive at an acceptable price, shall

amount to negotiations. However, any counter-offer thereafter to L-2, L-3, etc.,

(at the rates accepted by L-1) in case of splitting of quantities, as pre-disclosed

in the tender, shall not be deemed to be a negotiation.

2. It is reiterated that in case L-1 backs-out, there should be a re-tender.

3. These instructions issue with the approval of the Commission and may

please be noted for immediate compliance.



(Vineet Mathur)

Deputy Secretary

All Chief Vigilance Officers

Defence purchase: CVC issues new directives

NEW DELHI: With India on the threshold of floating international tenders for

mega armament acquisitions worth billions of dollars, watchdog Central

Vigilance Commission has issued new directives on defense purchases.

Under the directives, CVC has asked the Defence Ministry to avoid single

vendor situations in any deal except in very exceptional circumstances and

inclusion of Standard Contract terms in Request for Proposals.

The Commission has also told the defense ministry not to deviate or dilute

qualitative requirements after the request for proposals has been made.

The CVC directive comes as the Defence Ministry is about to float

international tenders for purchase of 126 multi-role combat aircraft, a deal

which industry sources say could be biggest ever deal by India, running up to

or more than USD 15 billion.

It is not the only mega defense deal coming up. In another big ticket deal worth

more than USD 700 million, the Army is to sign an agreement for purchase of

197 helicopters to replace its ageing fleet of Chetaks and Cheetahs.

Two firms, Bell Helicopter of the US and European consortium EADS, the

maker of Euro-Copter, have been short listed and evaluated.

Another big ticket deal would be for the purchase of new 155MM guns

upgraded to .52 calibers. India is opting to buy 400 of these upgraded guns

whose induction is almost 12 years behind schedule.



The army has already conducted three test trials and an unprecedented fourth

one is currently on between the Swedish Bofors guns and Israeli Soltam guns.

Pointing out repeated failures and losses incurred by the defense ministry is not

conforming to its laid out purchase norms, CVC has made it mandatory that in

all new deals, the ministry ensures advances are paid to suppliers against bank

guarantees confirmed by select Indian banks.

CVC has directed that performance bonds and warranty bonds are also taken

after similar confirmation. The defense ministry, according to the Comptroller

and Auditor General, has lost crores of rupees in transactions with Russian

suppliers by not taking bank guarantees and performance bonds.

The Commission has also made it mandatory that all offers be solicited from

original equipment manufacturers and prohibited the engagement of any agent

or payment of agency commission by the seller.

It has also told the government to include in the defense procurement manual

transparent requests for proposals both from indigenous and foreign

procurements with clear pre-qualification, short listing and contract award

criteria.

CVC has also said that there should be clear timeframes for each stage of

contract processing to cut delays and bring in accountability.

Both the CVC and Comptroller and Auditor General have been unsparing in

their criticism of the defense ministry getting into single vendor situations.

They have sharply criticised the previous NDA government for entering into

single vendor deals like those for purchasing the SU-30MKI, T-90s and

advanced trainers.

Commission sources said these were not directives but safeguards suggested to

the Defence Ministry.

"Most of these have already been incorporated in the defense procurement

process, the government has informed us," they said.



The sources said the guidelines had been suggested after the commission had

undertaken vetting of large number of deals submitted to it by former Defence

Minister George Fernandes.

The NDA government had submitted more than 30 deals for vetting by the

CVC after the Tehalka expose.

However, neither the Government nor the commission has made the findings

public.



TAXATION LAWS, INCLUDING VAT

Meaning of VAT

Meaning

Value Added Tax (VAT) is a general consumption tax assessed on the value

added to goods and services.

It is a general tax that applies, in principle, to all commercial activities

involving the production and distribution of goods and the provision of

services. It is a consumption tax because it is borne ultimately by the final

consumer.

It is not a charge on companies. It is charged as a percentage of prices, which

means that the actual tax burden is visible at each stage in the production and

distribution chain.

It is collected fractionally, via a system of deductions whereby taxable persons

can deduct from their VAT liability the amount of tax they have paid to other

taxable persons on purchases for their business activities. This mechanism

ensures that the tax is neutral regardless of how many transactions are

involved.

In other words, it is a multi-stage tax, levied only on value added at each stage

in the chain of production of goods and services with the provision of a set-off

for the tax paid at earlier stages in the chain. The objective is to avoid

'cascading', which can have a snowballing effect on prices. It is assumed that

due to cross-checking in a multi-staged tax; tax evasion will be checked,

resulting in higher revenues to the government.

Over 130 countries worldwide have introduced VAT over the past three

decades and India is amongst the last few to introduce it.

India already has a system of sales tax collection wherein the tax is collected at

one point (first/last) from the transactions involving the sale of goods. VAT

would, however, be collected in stages (installments) from one stage to

another.

The mechanism of VAT is such that, for goods that are imported and consumed

in a particular state, the first seller pays the first point tax, and the next seller

pays tax only on the value-addition done - leading to a total tax burden exactly

equal to the last point tax.



Necessity of VAT in India

India, particularly the trading community, has believed in accepting and

adopting loopholes in any system administered by the state or the Centre. If a

well-administered system comes in, it will close avenues for traders and

businessmen to evade paying taxes. They will also be compelled to keep proper

records of their sales and purchases.

Many sections hold the view that the trading community has been amongst the

biggest offenders when it comes to evading taxes.

Under the VAT system, no exemptions will be given and a tax will be levied at

each stage of manufacture of a product. At each stage of value-addition, the tax

levied on the inputs can be claimed back from the tax authorities.

At a macro level, there are two issues, which make the introduction of VAT

critical for India.

Industry watchers say that the VAT system, if enforced properly, forms part of

the fiscal consolidation strategy for the country. It could, in fact, help address

the fiscal deficit problem and the revenues estimated to be collected could

actually mean lowering of the fiscal deficit burden for the government.

The International Monetary Fund (IMF), in its semi-annual World Economic

Outlook released on April 9, expressed its concern over India's large fiscal

deficit - at 10 per cent of the GDP.

Further any globally accepted tax administrative system will only help India

integrate better in the World Trade Organization regime.

Advantages of VAT

Since ages always a reform is made for the benefit in the process of

development. It was Chanakya who first wrote that a government should tax its

people like a shepherd shears his flock or a bee gets nectar from a flower. But

apparently that fiscal wisdom died with him. Let us not experience the

same with VAT in India. It has a baggage full of benefits. Few advantages of

VAT in India are mentioned below.



It will be a virtual crime not to look to the other side of the coin of the Indian

VAT system. Disadvantages will always give birth to amendments to the

existing policy so that traders can ride jerk free on it adding value to the

existing Indian taxation system. We have also discussed upon the friction of

VAT below.

Advantages of VAT

In the advantages part we will first look after the broad coverage of VAT in the

Indian market. Then we will consider the level of security the Indian VAT is

having on our revenues. Obviously the selection of items to be covered by

VAT in India will be given a bullet to think upon and at last we will check out

the co-ordination VAT in India will be having with our existing direct tax

system

1) Coverage

If the tax is carried through the retail level, it offers all the economic

advantages of a tax that includes the entire retail price within its scope, at the

same time the direct payment of the tax is spread out and over a large number

of firms instead of being concentrated on particular groups, such as wholesalers

or retailers.

If retailers do evade, tax will be lost only on their margins because customers

that are registered firms gain nothing if their suppliers fail to collect tax, except

delay in payment; they will pay more to the government themselves. Under

other forms of sales tax, both seller and customer gain by evading tax. One

particular advantage is that of the widening of the tax base by bringing all

transactions into the tax net. Specifically, VAT gives the new government the

opportunity to bring back into the tax system all those persons and entities who

were given tax exemptions in one form or another by the previous regime.

2) Revenue security

VAT represents an important instrument against tax evasion and is superior to

a business tax or a sales tax from the point of view of revenue security for three

reasons.



In the first place, under VAT it is only buyers at the final stage who have an

interest in undervaluing their purchases, since the deduction system ensures

that buyers at earlier stages will be refunded the taxes on their purchases.

Therefore, tax losses due to undervaluation should be limited to the value

added at the last stage. Under a retail sales tax, on the other hand, retailer and

consumer have a mutual interest in under declaring the actual purchase price.

Secondly, under VAT, if payment of tax is successfully avoided at one stage

nothing will be lost if it is picked up at a later stage; and even if it is not picked

up subsequently, the government will at least have collected the VAT paid at

stages previous to that at which the tax was avoided; while if evasion takes

place at the final stage the state will lose only the tax on the value added at that

point.

If evasion takes place under a sales tax, on the other hand, all the taxes due on

the product are lost to the government.

A significant advantage of the value added form in any country is the cross-

audit feature. Tax charged by one firm is reported as a deduction by the firms

buying from it. Only on the final sale to the consumer is there no possibility of

cross audit.

Cross audit is possible with any form of sales tax, but the tax-credit feature

emphasizes and simplifies it and is likely to make firms more careful not to

evade because they know of the possibility of cross check.

3) Selectivity

VAT may be selectively applied to specific goods or business entities. We have

already addressed essential goods and small business. In addition the VAT

does not burden capital goods because the consumption-type VAT provides a

full credit for the tax included in purchases of capital goods. The credit does

not subsidize the purchase of capital goods; it simply eliminates the tax that has

been imposed on them.

4) Co-ordination of VAT with direct taxation



Most taxpayers cheat on their sales not to evade VAT but to evade personal

and corporate income taxes. The operation of a VAT resembles that of the

income tax more than that of other taxes, and an effective VAT greatly aids

income tax administration and revenue collection. It is interesting to note that

when Trinidad and Tobago set out to introduce VAT it chose one of its top

income tax administrators as the VAT Commissioner.

It must be stressed once again that if properly implemented VAT can

ultimately lead to a reduction in overall rates of tax.

Revenues will not be sacrificed but would in fact be enhanced as a

consequence of the broadened tax base. This does not seem to be a bad idea at

all.

Disadvantages of VAT

The main disadvantages which have been identified in connection with the

Value Added Tax are:

1) VAT is regressive

It is claimed that the tax is regressive, i.e. its burden falls disproportionately on

the poor since the poor are likely to spend more of their income than the

relatively rich person. There is merit in this argument, particularly if it attempts

to replace direct or indirect taxes with steep, progressive rates. However,

observation from around the world and even Guyana has shown that steep tax

rates lead to evasion, and in the case of income tax act as a disincentive to

effort.

Further, there is now a tendency in most countries to reduce this progressively

of taxes as has been done in Guyana where a flat rate of income tax has been

introduced. In any case VAT recognises and makes room for progressively by

applying no or low rates of tax on essential items such as food, clothes and

medicine. In addition it allows for steep rates of tax on luxury items, although

this can create problems for administration and open opportunities for evasion

by way of deliberate misclassification, a problem incidentally not peculiar to

VAT, and which takes place extensively in the area of customs duties.



2) VAT is too difficult to operate from the position of both the

administration and business.

(a) The administration

It is often argued that VAT places a special burden on tax administration.

However, it is worth noting that wherever VAT was introduced one of its

effects was the rationalisation and simplification of the previous indirect tax

system and its administration. Each of the previous indirect taxes such as

customs duties, purchase tax and excise duties replaced by VAT had its own

rate structure as well as a different tax base and separate administrative

procedure. The consolidation and incorporation of numerous indirect taxes into

the VAT would simplify the rate structure, tax base, and administration of the

indirect tax system, thereby eliminating the overlapping auditing practices that

had plagued those systems.

In addition, the abolition of a number of alternative indirect taxes releases

experienced personnel to focus on a single tax. It also means reduction in the

number of forms used, legislation to be applied and returns and accounts with

which the business person has to contend.

(b) Business

It is true that the VAT is collected from a larger number of firms than under

any form of income tax or single state sales tax; to the typical smaller firms the

complexities of the tax and the need for more extensive records (for example,

to justify deductions) are likely to prove serious.

However, it is often overlooked that businesses already function with

considerable administrative responsibility for a number of laws including the

National Insurance Act and the Income Tax Act.

Under the Income Tax (Accounts and Records) Regulations of 1980 every

person, without exception is required to maintain detailed and extensive

records of all its transactions. Compliance with this will certainly ensure

compliance with VAT regulations, and since there is an actual benefit to be

derived from accounting for VAT paid on input there is an incentive for proper

record-keeping.



As we have noted before, VAT also allows for the exemption of small

businesses from the system.

Under any form of sales taxation, small businesses have to be granted special

treatment because of their inability to cope with the requirements of keeping

adequate records which larger enterprises can handle at a reasonable cost. The

intent of the special treatment is to reduce the administrative burden on small

enterprises, but not the taxes that normally would be charged on the goods and

services they supply. The revenue loss at the final link in the commercial cycle

is limited only to the value added at that stage, whereas in the case of income

tax or sales tax the entire tax is lost. To recover the loss from exemptions, a flat

tax on turnover may be applied.

In the larger businesses with proper staff and computers, the task is really one

of double entry book-keeping and any additional work is hardly ever noticed.

3. VAT is inflationary

Some businessmen seize almost any opportunity to raise prices, and the

introduction of VAT certainly offers such an opportunity. However, temporary

price controls, a careful setting of the rate of VAT and the significance of the

taxes they replace should generally ensure that there is no increase if any in the

cost of living. To the extent that they lead to a reduction in income tax, any

price increases may be offset by increases in take-home pay.

In any case, any price consequence is one time only and prices should stabilise

thereafter.

4. VAT favours the capital intensive firm

It is also argued that VAT places a heavy direct impact of tax on the labour-

intensive firm compared to the capital- intensive competitor, since the ratio of

value added to selling price is greater for the former. This is a real problem for

labour-intensive economies and industries.



RIGHT TO INFORMATION ACT

(RTI Act)

About Right to Information

When does it come into force?

It comes into force on the 12th October, 2005 (120th day of its enactment on

15th June, 2005). Some provisions have come into force with immediate effect

viz. obligations of public authorities [S.4 (1)], designation of Public

Information Officers and Assistant Public Information Officers [S.5 (1) and

5(2)], constitution of Central Information Commission (S.12 and 13),

constitution of State Information Commission (S.15 and 16), non-applicability

of the Act to Intelligence and Security Organizations (S.24) and power to make

rules to carry out the provisions of the Act (S.27 and 28).

Who is covered?

The Act extends to the whole of India except the State of Jammu and Kashmir.

[S. (12)]

What does information mean?

Information means any material in any form including records, documents,

memos, e-mails, opinions, advices, press releases, circulars, orders, logbooks,

contracts, reports, papers, samples, models, data material held in any electronic

form and information relating to any private body which can be accessed by a

public authority under any other law for the time being in force but does not

include "file noting". [S.2 (f)]

What does Right to Information mean?

It includes the right to -

i. inspect works, documents, records.

ii. take notes, extracts or certified copies of documents or records.

iii. take certified samples of material.



iv. obtain information in form of printouts, diskettes, floppies, tapes, video cassettes or

in any other electronic mode or through printouts.[S.2(j)]

Officers and their obligations

What are the obligations of public authority?

It shall publish within one hundred and twenty days of the enactment

i. the particulars of its organization, functions and duties;

ii. the powers and duties of its officers and employees;

iii. the procedure followed in its decision making process, including

channels of supervision and accountability;

iv. the norms set by it for the discharge of its functions;

v. the rules, regulations, instructions, manuals and records used by its

employees for discharging its functions;

vi. a statement of the categories of the documents held by it or under its

control;

vii. the particulars of any arrangement that exists for consultation with, or

representation by the members of the public, in relation to the

formulation of policy or implementation thereof;

viii. a statement of the boards, councils, committees and other bodies

consisting of two or more persons constituted by it. Additionally,

information as to whether the meetings of these are open to the public, or

the minutes' of such meetings are accessible to the public;

ix. a directory of its officers and employees;

x. the monthly remuneration received by each of its officers and

employees, including the system of compensation as provided in its

regulations;

xi. the budget allocated to each of its agency, indicating the particulars of all

plans, proposed expenditures and reports on disbursements made;

xii. the manner of execution of subsidy programmes, including the amounts

allocated and the details and beneficiaries of such programmes;

xiii. particulars of recipients of concessions, permits or authorizations granted

by it;

xiv. details of the information available to, or held by it, reduced in an

electronic form;



xv. the particulars of facilities available to citizens for obtaining

information, including the working hours of a library or reading room, if

maintained for public use; the names, designations and other particulars

of the Public Information Officers.[S.4(1)(b)]

What does a "public authority" mean?

It means any authority or body or institution of self-government established or

constituted: [S.2 (h)]

by or under the Constitution;

by any other law made by Parliament;

by any other law made by State Legislature;

by notification issued or order made by the appropriate Government. and

includes any-

o body owned, controlled or substantially financed

o Non-Government organization substantially financed directly or

indirectly by the appropriate Government.

Who are Public Information Officers (PIOs)?

PIOs are officers designated by the public authorities in all administrative units

or offices under it to provide information to the citizens requesting for

information under the Act. Any officer, whose assistance has been sought by

the PIO for the proper discharge of his or her duties, shall render all assistance

and for the purpose of contraventions of the provisions of this Act, such other

officer shall be treated as a PIO.

What are the duties of a PIO?

PIO shall deal with requests from persons seeking information and

where the request cannot be made in writing, to render reasonable

assistance to the person to reduce the same in writing.

If the information requested for is held by or its subject matter is closely

connected with the function of another public authority, the PIO shall

transfer, within 5 days, the request to that other public authority and

inform the applicant immediately.

PIO may seek the assistance of any other officer for the proper discharge

of his/her duties.



PIO, on receipt of a request, shall as expeditiously as possible, and in

any case within 30 days of the receipt of the request, either provide the

information on payment of such fee as may be prescribed or reject the

request for any of the reasons specified in S.8 or S.9.

Where the information requested for concerns the life or liberty of a

person, the same shall be provided within forty-eight hours of the receipt

of the request.

If the PIO fails to give decision on the request within the period

specified, he shall be deemed to have refused the request.

Where a request has been rejected, the PIO shall communicate to the

requester - (i) the reasons for such rejection, (ii) the period within which

an appeal against such rejection may be preferred, and (iii) the

particulars of the Appellate Authority.

PIO shall provide information in the form in which it is sought unless it

would disproportionately divert the resources of the Public Authority or

would be detrimental to the safety or preservation of the record in

question.

If allowing partial access, the PIO shall give a notice to the applicant,

informing:

that only part of the record requested, after severance of the record

containing information which is exempt from disclosure, is being

provided;

the reasons for the decision, including any findings on any material

question of fact, referring to the material on which those findings

were based;

the name and designation of the person giving the decision;

the details of the fees calculated by him or her and the amount of fee

which the applicant is required to deposit; and

his or her rights with respect to review of the decision regarding non-

disclosure of part of the information, the amount of fee charged or the

form of access provided.

If information sought has been supplied by third party or is treated as

confidential by that third party, the PIO shall give a written notice to

the third party within 5 days from the receipt of the request and take

its representation into consideration.

Third party must be given a chance to make a representation before

the PIO within 10 days from the date of receipt of such notice.



What information is available?

What is not open to disclosure?

The following is exempt from disclosure [S.8)]

i. information, disclosure of which would prejudicially affect the

sovereignty and integrity of India, the security, strategic, scientific or

economic interests of the State, relation with foreign State or lead to

incitement of an offence

ii. information which has been expressly forbidden to be published by any

court of law or tribunal or the disclosure of which may constitute

contempt of court;

iii. information, the disclosure of which would cause a breach of privilege

of Parliament or the State Legislature;

iv. information including commercial confidence, trade secrets or

intellectual property, the disclosure of which would harm the

competitive position of a third party, unless the competent authority is

satisfied that larger public interest warrants the disclosure of such

information;

v. information available to a person in his fiduciary relationship, unless the

competent authority is satisfied that the larger public interest warrants

the disclosure of such information;

vi. information received in confidence from foreign Government;

vii. information, the disclosure of which would endanger the life or physical

safety of any person or identify the source of information or assistance

given in confidence for law enforcement or security purposes;

viii. information which would impede the process of investigation or

apprehension or prosecution of offenders;

ix. cabinet papers including records of deliberations of the Council of

Ministers, Secretaries and other officers;

x. information which relates to personal information the disclosure of

which has no relationship to any public activity or interest, or which

would cause unwarranted invasion of the privacy of the individual;

Notwithstanding any of the exemptions listed above, a public authority may

allow access to information, if public interest in disclosure outweighs the harm

to the protected interests.



Is partial disclosure allowed?

Only that part of the record which does not contain any information which is

exempt from disclosure and which can reasonably be severed from any part

that contains exempt information, may be provided. [S.10]

Who is excluded?

Central Intelligence and Security agencies specified in the Second Schedule

like IB, R&AW, Directorate of Revenue Intelligence, Central Economic

Intelligence Bureau, Directorate of Enforcement, Narcotics Control Bureau,

Aviation Research Centre, Special Frontier Force, BSF, CRPF, ITBP, CISF,

NSG, Assam Rifles, Special Service Bureau, Special Branch (CID), Andaman

and Nicobar, The Crime Branch-CID-CB, Dadra and Nagar Haveli and Special

Branch, Lakshadweep Police. Agencies specified by the State Governments

through a Notification will also be excluded. The exclusion, however, is not

absolute and these organizations have an obligation to provide information

pertaining to allegations of corruption and human rights violations. Further,

information relating to allegations of human rights valuations could be given

but only with the approval of the Central or State Information Commission, as

the case may be. [S.24)]



Procedure for Request of Information

What is the Application Procedure for requesting information?

1. Apply in writing or through electronic means in English or Hindi or in

the official language of the area, to the PIO, specifying the particulars of

the information sought for.

2. Reason for seeking information are not required to be given;

3. Pay fees as may be prescribed (if not belonging to the below poverty line

category).

What is the time limit to get the information?

1. 30 days from the date of application

2. 48 hours for information concerning the life or liberty of a person

3. 5 days shall be added to the above response time, in case the application

for information is given to Assistant Public Information Officer.

4. If the interests of a third party are involved then time limit will be 40

days (maximum period + time given to the party to make

representation).

5. Failure to provide information within the specified period is a deemed

refusal.

What is the fee?

1. Application fees to be prescribed which must be reasonable.

2. If further fees are required, then the same must be intimated in writing

with calculation details of how the figure was arrived at;

3. Applicant can seek review of the decision on fees charged by the PIO by

applying to the appropriate Appellate Authority;

4. No fees will be charged from people living below the poverty line

5. Applicant must be provided information free of cost if the PIO fails to

comply with the prescribed time limit.

What could be the ground for rejection?

1. If it is covered by exemption from disclosure. (S.8)

2. If it infringes copyright of any person other than the State. (S.9)



Information Commissions

How is Central Information Commission constituted?

1. Central Information Commission to be constituted by the Central

Government through a Gazette Notification.

2. Commission includes 1 Chief Information Commissioner (CIC) and not

more than 10 Information Commissioners (IC) who will be appointed by

the President of India.

3. Oath of Office will be administered by the President of India according

to the form set out in the First Schedule.

4. Commission shall have its Headquarters in Delhi. Other offices may be

established in other parts of the country with the approval of the Central

Government.

5. Commission will exercise its powers without being subjected to

directions by any other authority. (S.12)

What is the eligibility criterion and what is the process of appointment of

CIC/IC?

1. Candidates for CIC/IC must be persons of eminence in public life with

wide knowledge and experience in law, science and technology, social

service, management, journalism, mass media or administration and

governance.

2. CIC/IC shall not be a Member of Parliament or Member of the

Legislature of any State or Union Territory. He shall not hold any other

office of profit or connected with any political party or carrying on any

business or pursuing any profession. (S.12)

3. Appointment Committee includes Prime Minister (Chair), Leader of the

Opposition in the Lok Sabha and one Union Cabinet Minister to be

nominated by the Prime Minister.

What is the term of office and other service conditions of CIC?

1. CIC shall be appointed for a term of 5 years from date on which he

enters upon his office or till he attains the age of 65 years, whichever is

earlier.

2. CIC is not eligible for reappointment.



3. Salary will be the same as that of the Chief Election Commissioner. This

will not be varied to the disadvantage of the CIC during service. (S.13)

What is the term of office and other service conditions of IC?

1. IC shall hold office for a term of five years from the date on which he

enters upon his office or till he attains the age of sixty-five years,

whichever is earlier and shall not be eligible for reappointment as IC.

2. Salary will be the same as that of the Election Commissioner. This will

not be varied to the disadvantage of the IC during service.

3. IC is eligible for appointment as CIC but will not hold office for more

than a total of five years including his/her term as IC. (S.13)

How is the State Information Commission constituted?

1. The State Information Commission will be constituted by the State

Government through a Gazette notification. It will have one State Chief

Information Commissioner (SCIC) and not more than 10 State

Information Commissioners (SIC) to be appointed by the Governor.

2. Oath of office will be administered by the Governor according to the

form set out in the First Schedule.

3. The headquarters of the State Information Commission shall be at such

place as the State Government may specify. Other offices may be

established in other parts of the State with the approval of the State

Government.

4. The Commission will exercise its powers without being subjected to any

other authority

What is the eligibility criterion and what is the process of appointment of

State Chief Information Commissioner/State Information Commissioners?

The Appointments Committee will be headed by the Chief Minister. Other

members include the Leader of the Opposition in the Legislative Assembly and

one Cabinet Minister nominated by the Chief Minister.

The qualifications for appointment as SCIC/SIC shall be the same as that for

Central Commissioners.



The salary of the State Chief Information Commissioner will be the same as

that of an Election Commissioner. The salary of the State Information

Commissioner will be the same as that of the Chief Secretary of the State

Government. (S.15)

What are the powers and functions of Information Commissions?

1. The Central Information Commission/State Information Commission has

a duty to receive complaints from any person -

who has not been able to submit an information request because a PIO

has not been appointed ;.

CIC/SCIC will have powers of Civil Court such as -

who has been refused information that was requested;

who has received no response to his/her information request within the

specified time limits ;

who thinks the fees charged are unreasonable ;

who thinks information given is incomplete or false or misleading ;and

any other matter relating to obtaining information under this law.

2. Power to order inquiry if there are reasonable grounds.

3. CIC/SCIC will have powers of Civil Court such as –

summoning and enforcing attendance of persons, compelling them

to give oral or written evidence on oath and to produce documents

or things

receiving evidence on affidavit ;

requiring the discovery and inspection of documents

requisitioning public records or copies from any court or office

issuing summons for examination of witnesses or documents

any other matter which may be prescribed.

4. All records covered by this law (including those covered by exemptions)

must be given to CIC/SCIC during inquiry for examination.

5. Power to secure compliance of its decisions from the Public Authority

includes-



providing access to information in a particular form;

directing the public authority to appoint a PIO/APIO where none

exists;

publishing information or categories of information;

making necessary changes to the practices relating to

management, maintenance and destruction of records ;

enhancing training provision for officials on RTI

seeking an annual report from the public authority on compliance

with this law;

seeking an annual report from the public authority on compliance

with this law;

require it to compensate for any loss or other detriment suffered

by the applicant ;

impose penalties under this law; or

reject the application. (S.18 and S.19)

What is the reporting procedure?

1. Central Information Commission will send an annual report to the

Central Government on the implementation of the provisions of this law

at the end of the year. The State Information Commission will send a

report to the State Government.

2. Each Ministry has a duty to compile reports from its Public Authorities

and send them to the Central Information Commission or State

Information Commission, as the case may be.

3. Each report will contain details of number of requests received by each

Public Authority, number of rejections and appeals, particulars of any

disciplinary action taken, amount of fees and charges collected etc.

4. Central Government will table the Central Information Commission

report before Parliament after the end of each year. The concerned State

Government will table the report of the State Information Commission

before the Vidhan Sabha (and the Vidhan Parishad wherever applicable).

(S.25)



Role of the Governments

What is the role of Central/State Governments?

1. Develop educational programmes for the public especially

disadvantaged communities on RTI.

2. Encourage Public Authorities to participate in the development and

organization of such programmes.

3. Promote timely dissemination of accurate information to the public.

4. Train officers and develop training materials.

5. Compile and disseminate a User Guide for the public in the respective

official language.

Publish names, designation postal addresses and contact details of PIOs and

other information such as notices regarding fees to be paid, remedies

available in law if request is rejected etc. (S.26)

Who has the Rule making power?

Central Government, State Governments and the Competent Authority as

defined in S.2 (e) are vested with powers to make rules to carry out the

provisions of the Right to Information Act, 2005. (S.27 & S.28)

Who has the power to deal with the difficulties while implementing this

act?

If any difficulty arises in giving effect to the provisions in the Act, the

Central Government may, by Order published in the Official Gazette, make

provisions necessary/expedient



MISSION EXCEL IT

-An Overview

The Defence Accounts Department has launched an ambitious

automation project 'Mission EXCEL IT'. The aim of Mission Excel IT, which

was started in December 2002, is total online integrated automation of all

functions of the Department including providing network connectivity to all its

offices. As a first step, it was decided to undertake a comprehensive study of

all functional areas of the Department. For this purpose in-house Study Groups

(21 Nos) were formed which were mandated to identify areas for automation,

databases to be created and to suggest areas for BPR (Business Process Re-

engineering). A separate group on Information Technology was also formed to

give recommendations on software technologies to be used. The software

technologies that are proposed to be used in the automation projects under

Mission Excel IT are:

Operating System: Red Hat Linux Advanced and Enterprise for Servers

and MS Windows for desktops.

Application Development: on J2EE (Java 2 Enterprise Edition), with

Jobs as Application Server and Tomcat as Web Container.

RDBMS: Red Hat Database and Myself

Even though, the computerization in the Defence Accounts Department

has been achieved through in-house efforts, considering the magnitude of

Mission Excel IT, it has been decided to outsource the development of

software.

Under Mission Excel IT, eleven Software Development Projects have

been identified. These projects are a combination of Main System (core

functional area of an office) and a Plug-in system (System or Modules covering

a support function which will be plugged into the main system). It will be the

responsibility of software developers to develop the interfaces between main

systems and Plug-in Systems, so as to achieve seamless integration.

For each of the eleven Software Development Projects a Project

Coordination Team has been set up (PCT) – comprising of a project manager

(a Senior IDAS officer), domain experts and IT experts. The PCTs would be

the point of contact for the software developer. The PCTs would be closely



associated with each and every stage of development and implementation of

the eleven software projects.

The PCTs would prepare an exhaustive URS (User Requirement

Specifications) which would form part of the Tender Documents for RFP.

A roadmap of the entire project has been conceived which comprises

activities such as URS writing, network decisions, budget estimation of the

project, selection of vendor, software development, testing, implementation

and training of system administrator and users. The Project End Date of

Mission EXCEL IT is March 2007.

2. Software Development Projects under MISSION EXCEL IT

2.1 Pension Project: The Pension Project constitutes two main systems – the

Pension Sanction system and the Pension Disbursement System.

2.1.1 Pension sanction is the responsibility of Pr Controller of Defence

Accounts (Pension) Allahabad, Controller of Defence Accounts (Navy)

Mumbai and Controller of Defence Accounts (Air Force) Dehradun. These

offices sanction pension in r/o defense civilians, commissioned officers and

jawans of armed forces. They also monitor and audit payment of pension by

the different Pension Disbursing Agencies.

2.1.2 Pension Disbursement is the responsibility of Controller of Defence

Accounts (PD), Meerut and Controller of Defence Accounts, Chennai. These

two offices discharge the pension disbursement responsibility through their

sub-offices the Defence Pension Disbursement Offices (DPDOs). The

numbers of DPDOs are 61 in number and these are spread all across the

country from Jammu to Kerala. There are about 20 Lakhs Defence

pensioners, out of which about 6.1 lakhs pensioners are drawing pension

through the 61 DPDOs. Average number of pensioners per DPDO is appox.

10,000. DPDO Amritsar is the biggest (20912 pensioners) and Leh is the

smallest (2632 pensioners).

Development Center of this Project is Allahabad/Meerut. Pension Sanction

System has to be implemented in 3 CsDA office mentioned above. Pension

Disbursement System is to be implemented in 2 CsDA offices and also in 61

DPDOs.



2.2 CDA (O) [Controller of Defence Accounts (Officers)] Project: The CDA

(O) Project comprise of the CDA (O) main system and the T-Armed Forces

Plugin system [Traveling/ Daily Allowances of armed forces].

2.2.1 Controller of Defence Accounts (Officers), Pune is responsible for

maintenance and disbursement of pay and allowances and fund accounts of

over 40,000 officers of the Indian army. This office is also responsible for

adjustment of Traveling Allowance claims, misc. bills and maintenance of

fund accounts of the army officers. The CDA (O) System will be

implemented in the office of Pune in all its sections.

2.2.2 T-Armed Forces System: This plugin system would be applicable to

three offices viz CDA (O) Pune, CDA (AF) Dehradun and CDA (Navy)

Mumbai who are responsible for TA/DA claims (advance and final bills) of

all officers and jawans of Armed Forces.

Development Center of this Project is Pune. CDA (O) System has to be

implemented in CDA (O) Pune and T-Armed forces System has to be

implemented in 3 CsDA office mentioned above

2.3 IFA (Integrated Financial Advisor)/ ATC (Audit through Computers)

Project: This Project comprised two main Systems viz. the IFA System and

the ATC System.

2.3.1 The IFA System should cover the functionalities of the Integrated

Financial Advisor take care of the role of DAD before sanction of defense

expenditure. The IFA accords financial concurrence to defense expenditure

proposals initiated by various authorities of the armed forces under their

delegated financial powers. In fulfilling his functions the IFA will need to

refer to various inputs related to consumption trends, past purchase price etc.

The office of IFA has been established at the all the service HQ and the

lower formations of the armed forces.

The IFA system will need to be implemented across the different

organizations of the armed forces i.e. the Army, Navy and Air force. In

addition it will also have to be implemented both at the Headquarters and at

the lower formations.



2.3.2 The ATC System should cover the functionalities of the sub-offices of

the Department – the Local Audit Office (LAO). The audit role of the LAO

begins after defense expenditure has been incurred; he ensures proper

accounting and utilization of defense resources. The LAO offices are

collocated with the lower units and formations of the armed forces and they

report their findings to their controller offices. The ATC System will have to

be implemented in all the LAO offices and its MIS module will have to be

implemented in the respective controller offices.

Development Center for this project is Delhi. The implementation of the

Project is in a large number of offices which would also be connected on the

WAN.

2.4 Regional CDA Project: This Project comprise of Regional CDA System

and Accounts Section Plugin System.

2.4.1 Regional Controller System consists of Store section, miscellaneous

section and Engineering section of a Controllers office and its various sub

offices like Areas Accounts Office, Assistant Accounts Officer (Garrison

Engineer), Assistant Accounts Officer BSO etc. The System also covers

same work areas in CDA (Navy), CDA (AF), PCDA (New Delhi) and CDA

(R & D). This system will be installed in all Regional CsDA, CDA (Navy),

two CDA (AF), PCDA, New Delhi and three CDA (R&D) offices and their

sub-offices

2.4.2 Accounts System: One of the most important duties of the Defence

Accounts Department is to account for each and every item of expenditure

and receipt pertaining to Defence services (as reflected in Defence Service

Estimate) and Ministry of Defence (Civil Estimate). CGDA, as the head of

the Defence Accounts Department is the Principal Accounts Officer of the

Ministry of Defence. The major items of work being handled in the

Accounts section are Preparation of consolidated Defence Receipt &

Charges Report, Budgetary Control over Expenditure under locally

Controlled Heads, Defence Proforma Account and Transactions relating to

Defence i.e. payments by Banks/Treasuries and remittances into

Banks/Treasuries, Adjustment of Debit and credit Scrolls, Reconciliation

between cheques issued and received back, Defence Exchange Account &

its settlement, Maintenance of Debt Head Registers (Advances such as



House Building and Car), Preparation of Annual Review of Balances etc.

This system will be a plug-in system to be installed in every office.

Development site of this Project is Delhi.

2.5 PCDA (ND) [Principal Controller of Defence Accounts (New Delhi)

Project : This Project should cover the unique functions of this office such

as Foreign Payment Section, POL (Petrol, Oil & Lubricant) section, APO

(Army Purchase Organization) section and UN cell section. The non unique

functions of this office will be covered by the Regional Controller Project.

Development site of this project is Delhi.

2.6 CDA (N) [Controller of Defence of Accounts (Navy)] Project: This

Project would cover the unique functionalities of the Office of Controller of

Defence Accounts (Navy), Mumbai. The CDA (N) is responsible for audit

of accounts of pay and allowances of the naval personnel – both

entitlements and payment – maintained by the Indian Navy (by the Naval

Pay Office - NPO). This function is performed at Mumbai. In discharging

this function the CDA (N) will access the computerized system and data of

the NPO. The other unique function of CDA (N) is the costing activity of

the Dockyards. The non unique functions of this office will be covered by

the Regional Controller Project. This system will need to be implemented in

Mumbai and Vishkapatnam.

The development center for this Project is Mumbai.

2.7 CDA (AF) [Controller of Defence Accounts (Air Force)]: This Project

would cover the unique functionality of the Office of Controller of Defence

Accounts (Air Force), Delhi. The CDA (AF), Delhi is responsible for audit

of accounts of pay and allowances of the air force personnel – both

entitlements and payment – maintained by the Indian Air Force (by the Air

Force Central Accounting Office - AFCAO). This function is performed at

Delhi only. In discharging this function the CDA (AF), Delhi will access

the computerized system and data of the AFCAO. The non unique functions

of this office will be covered by the Regional Controller Project.

The development center for this Project is Delhi.



2.8 CDA (BR) [Controller of Defence Accounts (Border Roads)] Project:

This project comprise of CDA (BR) System and Pay Accounts Office

(GREF) system.

2.8.1 CDA (BR) system comprises of all functions of main office of CDA

(BR), New Delhi, JCDA (BR), Chandigarh and JCDA (BR) Guwahati. It

also comprises of all functions of Account Offices of Projects and Task

Forces. Accounts Offices at the Task Forces level are the most important

offices on the ground. These offices are located in the remotest of the parts

of India.

2.8.2 PAO (GREF), Pune system consists of Pay and Allowances of all

General Reserve Engineering Force (GREF) personnel being maintained at

Pune.

Development site of this Project is New Delhi and Pune

2.9 ORs [Other Ranks] Project: This Project comprise of Other Ranks

System to be implemented in 43 Pay Accounting Offices (PAOs) at various

locations. Main functions of PAO are maintaining Pay and Allowances of

Army Jawans, Closing of accounts and issue of Quarterly Statements of

Accounts, Imprest accounting and Fund accounts maintenance.

Development site of this project is New Delhi.

2.10 FIS/MOD (Financial Information System/ Ministry of Defence)

Project: The software application developed under this Project would be a

tool both for the Ministry of Defence and the Defence Accounts Department

for monitoring the defense budget. The backbone of this project would be

databases and MIS reports generated there from. The FIS System will need

to build three main databases pertaining to budget allocation, defense

expenditure and committed liabilities. The FIS system would be universal

plug-in system that will be implemented in all the offices of the

Department. The System will have an interface with practically every other

system developed under Mission EXCEL IT and will be importing/

exporting data from/ to every other system. The databases will be updated

in all the offices of the Department.

The development centre of this project is Delhi.



2.11 Pay Project: This project comprises of CGDA system, Fund (Main)

System, DAD/PIS (Defence Accounts Department/Personnel Information

System) System and Expanded Pay System.

2.11.1 CGDA System will cover all functions of Controller General of

Defence Accounts (CGDA), New Delhi.

2.11.2 Fund (Main) System will cover fund maintaining activities of

Defence civilians being done in JCDA (Funds), Meerut, CDA (Navy)

Mumbai, PCDA, New Delhi, CDA (R&D) New Delhi and PCOA

(Factories), Kolkata. Fund (Main) System will be implemented in all these

offices.

2.11.3 DAD/PIS System will cover administration functions of all DAD

offices and maintenance of Personnel Information of all its employees. This

system will be implemented in all the offices.

2.11.4 Expanded Pay System covers Pay and Allowances, fund

maintenance and Travelling Allowance/Daily Allowance activities in

respect of DAD employees, defense industrial and non industrial

employees. This system will also be implemented in all the offices.

The development centre of this project is New Delhi



COMPUTER AWARENESS

What is a Computer?

The word "Computer" comes from the word "compute" which means to

calculate. A computer is an electronic device, which stores and processes data

to give meaningful information. Processing is done with the help of

instructions given by the user, which are also stored within the computer.

Data refers to all the basic elements that can be produced or processed by a

computer.

Data is a collection of facts and figures which has to be processed by some

processing system, (whether a human being or a machine) to be

understandable.

Information: It is the processed form of data, which makes some sense and

helps in reaching a conclusion.

Characteristics of Computers

Speed

The computer was invented as a high-speed calculator. This has led to many

scientific projects which were previously impossible. If we want tomorrow's

weather forecast today, meteorologist can use the computer to perform the

necessary calculations and analysis.

Storage

A computer can store a vast amount of information in its storage location for

future use which can be recalled at any time.

Logical decision

A computer is capable of comparing data, both numeric and non-numeric;

depending on the results, it makes certain decisions. These decisions are logical

decisions which help the computer in deciding its way of action.

Super Efficiency and Automation

Unlike human beings computers can work for hours and produce error free

results. Computers process data with the help of instructions fed into them, that



is it work automatically. Computers manipulate data according to the

instructions and they never get tired.

Accuracy

The computer's accuracy is consistently high. Errors in the machinery can

occur but, due to increased efficiency in error detecting techniques, this seldom

leads to incorrect results.

Reliability

Computer output is generally very reliable, subject to the condition the input

data entering the computer should be correct and the program of instructions

should be reliable and correct.

Versatility

Computers seem capable of performing almost any task, provided that the task

can be reduced to a series of logical steps for e.g., a task such as preparing the

payroll or controlling the flow of traffic can be broken down into a logical

sequence of operations. Yet the computer itself has only limited ability and, in

the final analysis, actually performs only four basic operations:

• It exchanges information to the outside world via I/O devices.

It transfers data internally within the CPU.

• It performs the basic arithmetical operations.

• It performs operations of comparisons

Computer system is made up of the following components

Input device

Central Processing Unit

Output device

INPUT PROCESS OUTPUT



Input device

Input means putting the raw data through input device into the processing

device Input Unit allows us to communicate with the computer. An input unit

converts the numbers, alphabet or other signals into the internal binary code

(will be discussed later). Keyboard, mouse, joystick, light pen are the examples

of input unit. We will discuss about the input device in details later.

Central Processing Unit

Another important component of the computer system is known as CPU. It

accepts instructions through keyboard, stores them into memory and later on

executes them. It can be also thought of as the "brain" of the computer. It

performs all the calculations and controls the overall activities of the computer.

CPU consists of three components

Arithmetic Logic Unit

Memory Unit

Control Unit

Output device

The devices, through which we get the processed information or the desired

result, are known as the output devices. There are a variety of output devices

which return the information given by the user. The most popularly used output

devices are Visual Display Unit (VDU) or monitor, printers, plotters etc.

How does a computer Work

Central Processing Unit: Central Processing Unit (CPU) is the processing device

of computer. It inhere that the actual work is done. The CPU is like the `brain' of

the computer. It takes information from the input unit and memory and uses or

processes it according to the instructions given. It may put information into the

memory or give results to the output unit.



The following figure indicates the movement of data in a computer.

ALU (Arithmetic and Logic Unit) In the ALU, calculations such as addition,

multiplication etc. of numbers is carried out. The ALU can also carry out logical

operations like comparing two numbers to see which is the larger. A modern

computer can perform a single addition in nana seconds (1 nana second = 10 -9

seconds)

Control Unit: It controls the overall activities of a computer system. It gets

information from the input unit, sends information to the output unit or transfers

information to or from the computer's memory. It is important that everything is

done in exactly the right order and at the right time, so there is an accurate clock

within the computer which is connected to the control unit.

Internal Memory / Primary Memory In a PC, internal memory is usually

contained in silicon chips. It holds instructions and data which the computer is

currently working on, and which can be accessed by the CPU whenever required.

Internal memory needs to work very rapidly because the speed of the CPU is very

high and requires information to be readily available.



Internal Semiconductor Memory is of two types:

RAM

ROM

RAM (Random Access Memory) is an electronic memory which is used to store

data and instructions from the operating system and any program you are using.

RAM Stores information temporarily, if the power is interrupted, even for an

instant the information is lost for ever. The CPU accepts information from RAM

as and when required, processes it and returns to RAM.

ROM (Read Only Memory) ROM or Read Only Memory holds sets of

instructions which tell the computer what to do. For instance, a ROM will tell the

processor how to recognize which key has been pressed and how to light up the

screen. Information stored in ROM can be “read” it can not be erased or added to

because when chip is manufactured it is made non-writable. The information

stored in ROM is not erased even if Power is switched off.

Disk Drives

Disk drives provide a means of storing work, or data. Floppy disks are

transportable from PC to PC and come in two sizes, 31/2" and 51/4" diameter.

Hard disks are fixed inside the system unit and have much higher storage

capacities than floppies.

Hard disks (or fixed disks) work on the same principle as floppy disks but are

fixed inside the PC in a sealed unit. They can store a great deal more

information than floppy disks and range in capacity from 10Mb to several

hundred Mb. Access times (i.e. the time taken to read and write information)

for hard disks are much faster than for floppy disks. Manufacturers often quote

access times as well as capacities for hard disks.

Information is stored on disk in the form of files. A file might be a program or

data such as a word processor document. Files can be grouped together on disk

in directories.



The Monitor

The monitor provides display output from the PC. Monitors vary in screen

resolution and colours available. Monitors are available in colour and

monochrome versions and in different screen sizes.

The Keyboard

The keyboard allows you to input commands and information into the PC. The

keyboard is normally connected to the main unit via a 5 pin DIN type socket.

Peripherals

As well as the essential keyboard and monitor, peripheral items such as

printers and mice are often found connected to PCs.

Printers and Plotters

A printer may be connected to one of the serial or, more commonly, parallel

ports of a PC. The availability of a printer is especially important for

applications such as word processing. Printers vary enormously in quality and

speed of output.

Printer Types

Printers can be grouped by the method with which they print.

Dot-Matrix Printers

The most common type of printers is dot-matrix. This refers to the way ink is

applied to the paper - by a set of pins impacting onto the paper through an

inked ribbon to form each character. Printer quality depends on the number of

pins on the printer head. This is usually 9 pins, but 24 pin printers are available

with a corresponding increase in print quality (and cost). Most dot-matrix

printers have NLQ (Near Letter Quality) options where higher quality output is

produced at a lower print speed.



Laser Printers

Laser printers have the advantage of being able to produce letter quality text as

well as high quality graphics. Their disadvantage is that they are expensive to

buy and run; although costs are coming down. Laser printer quality is

measured in dots per inch, the most common being 300 dpi. They are page

printers, fan fold paper cannot be used; but one (or sometimes two) automatic

paper feed trays are an integral part. Printing speed is usually quoted in pages

per minute (ppm).

Inkjet Printers

Inkjet printers work by spraying a fine jet of ink on the paper to form the

characters or graphic. Inkjet printers produce high quality output, next to laser

printers, and are quiet in operation.

Plotters

A pen plotter is an output device essential for graphical applications like

computer Aided Design (CAD). Plotters provide a better quality graphics

output than printers and allow the use of different colours (high quality colour

printers are available, but very expensive).

The Mouse

A mouse is a device which moves a pointer around the screen, options being

selected by pressing (or `clicking') a mouse button. In present day Software a

mouse is essential. Graphical User Interfaces, such as Windows require the use

of a mouse.

The Keyboard

This section covers the use of the keyboard.

Layout of the Keyboard

There are two styles of keyboard in common use, the older 84-key and the now

more common 102-key expanded keyboard. The 102-key keyboard normally

consists of four main parts;



A typewriter-style alphanumeric keyboard with four extra keys labeled Esc

(Escape), Ctrl (Control), and Alt (Alternate).

A numeric keypad, situated at the far right of the keyboard, providing the digits

0 to 9, a decimal point and plus and minus signs, together with four special

keys labeled Num Lock (Number Lock), Scroll Lock, Ins (Insert) and Del

(Delete). On the 84-key keyboard the numeric keys are also used as cursor

control keys.

The layout of these keys is shown in figure 6 and their general uses are

described in the following sections. The position of some of the keys may be

different from that described below.

In order to save space, the keyboards on portable and notebooks PCs have

largely different layouts from that described above.

In between the alphabetic keys and the numeric keypad there are two groups of

keys. The top group repeats the functions on the numeric keypad. Below there

are four cursor keys. These are not present on the 84-key keyboard.

A set of twelve function keys situated in a single row above the main

typewriter keyboard and labeled F1 to F12. On the 84-key keyboards there are

ten function keys situated to the left of the main typewriter keys.

102 Key Keyboard Layouts



Capital Letters and Punctuation Marks

As with a typewriter, to type upper case (capital) letters, or to obtain a

punctuation mark or symbol shown on the upper half of a key, hold down one

or other of the two <Shift> keys while pressing the key marked with the

required character.

The Shift keys are normally situated on each side of the bottom line of letter

keys and are often marked with a `fat' up-arrow). To type text in capital letters,

the keyboard can be `locked' into capitals by pressing the Caps-Lock key (the

key or a sign on the keyboard may be lit). Since Caps Lock only affects the

letter keys, it will still be necessary to hold down a Shift key to obtain the

punctuation marks and symbols shown on the upper half of keys. To return to

lowercase letters, press the Caps-Lock key again (the light will go out). If you

press Shift while Caps-Lock is engaged you will revert to lowercase i.e. Shift

always reverses the current state of Caps-Lock.

Numeric Keypad

The numeric keypad at the right of the keyboard can be used for numeric input

only if the Num Lock key is pressed (the key or a sign on the keyboard may be

lit). To release the numeric keypad and hence use the cursor keys (labeled with

arrows), press the Num Lock key again; the light will go out.

On some keyboards the cursor keys are also a separate group of four keys (see

figure 6). Either set of cursor keys may be used.

Screen Control Keys

As well as the four cursor control keys, keys marked PgDn (Page Down),

PgUp (Page Up), Home and End are available for cursor movement,

depending on the software being used. These keys are also duplicated on the

numeric keypad.

Entering Commands

The key on the right-hand side of the alphanumeric keyboard that is often L-

shaped and larger than the other keys, and is labeled with a right-angled, left-

pointing arrow ([[??]]) and/or Return or Enter (see figure 6), is used to send a



command line to the computer to be processed. After typing in a command to

the PC, this key must be pressed to enter or start the command. In general,

commands may be entered in upper or lower case letters, or a mixture of the

two.

The <Return> key is sometimes known as the <Enter> key. There is also an

<Enter> key on the numeric keypad which can be used in exactly the same way

as the <Return> key.

Correcting Typing Mistakes

To correct a mistake that you notice before you have pressed the <Return>

key, use the <Backspace> key to `erase' the mistake. The <Backspace> key is

situated above the <Return> key and is labeled with a left-pointing arrow.

Each time the <Backspace> key is pressed, the character to the left of the

current cursor position is deleted. (The cursor is the flashing underline

displayed on the screen.) The correct characters can then be retyped before

pressing the <Return> key.

The Insert Key

The Insert key sometimes marked INS acts as a toggle key when entering data

or commands. In insert mode any characters entered push into the current line

at the cursor position. In overstrike mode any characters entered will overwrite

any characters currently displayed.

Other Useful Keys

The operation of the Function Keys depends on the particular software being

used. For example pressing F1 calls up a help screen in a lot of software

packages.

The ESC key usually allows you to `escape' from a particular environment.

The Print Screen key, sometimes marked PrtSc, when pressed in conjunction

with the Shift key copies the screen image to the printer.



The Alt and Control keys are used in combination with other keys to execute

particular commands depending on the software being used. For example

Control-F2 will initiate a spell check when using WordPerfect.

Networking

PCs were designed as single user stand-alone systems. It is possible, however,

to link PCs so they are able to share data and peripherals and use electronic

mail. PCs are linked via a network. The network is normally controlled from a

PC called a fileserver. The fileserver has a large, fast hard-disk containing

applications software and data which is available to the other PCs on the

network. The advantages of networks are numerous. For example if a new

version of a software package were to be used, rather than installing it on every

PC in the office, it need only be installed on the fileserver. Also, peripherals

such as plotters and printers can be added to the network, allowing sharing of

resources.

Creating a network involves additional hardware and software. As well as the

cabling involved, each PC in the network needs an expansion card called a

network controller. There are several different networking protocols available,

the most common being Ethernet. Software is also needed to control the

network, the standard for PC networks being Novell Netware.

Hardware

Hardware is the physical part of a computer, something which we can touch,

feels with our hand. Technically, we can define the Hardware as all the

equipment and electronic circuits that make up the computer i.e. keyboard,

screen, disk drives, printers etc. However the hardware can do nothing without

the software



What is Software?

Software is the set of operational instructions to the hardware, which tells the

computer what to do, how to act, how to generate picture, how to print a bio-

data and other documents and so on. Technically we can define the software as

the information that the computer needs to work on. The information can be

instructions, which tell the computer what to do or the data that is used by the

instruction. For example to perform addition, the actual numbers that are

entered into the computer for addition are the data.

A set of instructions that performs a task is known as a program. You cannot

touch the software; it can only be stored on floppy disk, hard disk drive,

Compact Disks (CDs), just the way music is stored in cassettes and CDs.

Types of Software

Operating System Software: this is the most important software which is used

as an interpreter between the user and the computer. It also manages the input

and output devices of a computer.

Application Software: this is customized software created for user’s specific

need and is done with the help of a programming language.

OPERATING SYSTEM

An operating system is a collection of programs which manage system

resources and aid in the development and execution of application programs. It

is difficult for a major y of us to communicate with computers in Binary

Language. Therefore, programs are written in high level language. The

programs written in high level language are translated to machine, language by

another program called compiler.

The operating system used in different computer system is

Microcomputer: DOS (MS-DOS, PC-DOS), CP/M-80, WINDOWS, XENIX,

AOS, OS/l, OS/2, Macintosh etc.

Minicomputer: RSX-11, RTOS, VMS (VAX system) etc.



Mainframe computer: MULTICS, OS/MFT, OS/VMT, VM 370, MCP, XDS,

UNIX, LINUX etc.

A computer not only has hardware and high level language translators but also

many routines which enable user to use the computer efficiently.

The operating system acts as an interface between the user and the computer.

Various functions performed by the operating system are

1. Bootstrap loader: This program resides in ROM. This is used to read the

main portion of the operating system from the disk when the computer is first

turned on.

2. Diagnostics tests: The operating system performs various diagnostic tests.

These tests are for checking the operation of the disk drives, checking the

RAM etc.

3. Operating System Supervisor: This is the supervisory program which

controls all the activities of the system.

Various tasks performed by this program are as follows

It assigns processors to task properly.

It allocates memory and other storage areas.

It interprets commands/instructions.

It handles job to job transitions.

It acts as an internal time clock.

It establishes and enforces a job priority system.

It schedules the processing of jobs/tasks.

It co-ordinates and assigns I/O devices.

It manages the correct execution of a program.

It establishes data security and integrity.

It maintains an account for processor time, I/O time etc. for billing

purposes.



Conducting of Inspection of Offices/Sub-Offices of DAD including

preparation of Inspection reports and O&M studies

INSPECTION GROUP

An Inspection Group may constitute apart of existing O&M Cell or an

independent group directly responsible to the JCDA/CDA. This group will

conduct Inspection of various sections in the Main Office, once a year and also

of Sub Offices according to the directions given by the CDA. Controllers may

also conduct personal inspection, on a random sampling basis, of the sections

of their main office and of their Sub Offices during tours.

OBJECTIVES

The objectives of Inspection are:

(i) to enable the CDA to ensure that his ultimate responsibility for the

efficiency and effectiveness of his office and sub offices under his

area, is adequately discharged.

(ii) to ensure that suitable remedial measures are taken to avoid

recurrence of omissions/lapses pointed out and

(iii) to suggest changes in procedures or introduce new procedures as

found necessary.

Functions of the Inspection group are:

(i) to carry out, on behalf of CDA, periodical inspection of various

sections in Main Office and Sub Office under his jurisdiction.

(ii) to issue Inspection Reports to the concerned Sections/Sub Offices

duly approved by JCDA/CDA.

(iii) to take follow up action to watch the rectification of omissions

lapses pointed out in the Inspection Reports.

(iv) to ensure that suitable remedial action is taken by Sections/Sub

Offices to avoid recurrence of similar lapses in future.

(v) to keep a record of Inspection of Sections/Sub Offices carried out.

(vi) to keep the Inspection Manual up-to-date in conformity with

revised orders/procedures issued from time to time.



(i) to render a half yearly report by 31st October, and 30th April to

CGDA indicating the detail of inspection carried out up to the end

of the half year ending September and March the more important

points noticed and the remedial action taken.

SCOPE OF WORK

The Inspection of various Sections/Sub Office is carried out on a random

sampling basis. The Inspection will aim at ascertaining, through judicious and

careful sampling of various items or work done in the Section/Sub Office,

whether

(a) the prescribed processes of audit and accounting had been

followed correctly and efficiently.

(b) recurring typical omissions/lapses of a particular type of work

persist.

(c) there is evidence of faulty supervision at various levels.

(d) any lacuna in the systems and procedure existing in a particular

section/sub-office.

The Inspection Group will generally be guided by the Inspection Manual. The

particular item of work or document to be examined and the extent and manner

of checks will be decided at the discretion of JCDA/CDA. Any portion of the

work selected for random sampling may however be subjected to detailed and

extensive scrutiny, but trivial details and cases of isolated lapses which have no

significance from the point of view of over all performance of work need not

be given undue importance.

Normally all the Sections in Main Office will be inspected once a year. Over a

period of time Inspection of Sub Offices will be conducted to the discretion of

CDA.

PREPARATION AND DISPOSAL OF INSPECTION REPORTS

(a) The points arising out of Inspection should first be discussed by

the AAO with SO (A)/AAO Officer in Charge of the Section/Sub Office

concerned. Subsequently the points may be discussed by the AO with the

Sr.AO In Charge/G.O. Omissions/lapses noticed which can not be settled at



this level or items for which action is pending with the Sections/Sub Offices,

will be incorporated in the Inspection Report for submission to JCDA/CDA.

(b) The report will be prepared in two parts. Part I will contain

instances of grave irregularities, failure of audit/ accounting system which have

wide repercussions, defalcation of cash or any other issue, which in the opinion

of the Controller, may be of immediate interest/ or which merit immediate

attention of CGDA/ Ministry and Part II will include all other procedural

discrepancies/ defects. The points raised in Part I of the inspection report of

Major Sub-Offices, such as Area Accounts Officer, Zonal Offices (Pensions),

DPDO's, AO's (R&D), Branch Accounts Offices (Fys) and PAOs (ORs) etc.

will be reported to the CGDA, New Delhi through Special Report after

completion of the Inspection along with Controller's personal appreciation

indicating specifically measures taken/ proposed to be taken to eliminate the

inadequacies/ deficiencies.

(c) The inspection report should be cleared and precise. The report

should as per as possible, referred to the relevant rule for order violated.

(d) A summary of all important omissions /lapses and recurring

mistakes noticed will also be prepared and highlighted in the forwarding

memo. of Inspection Report to enable the CDA to have a correct appreciation

of the over all situation and efficiency of the work in the concerned

sections/Sub Offices.

(e) Three copies of the Inspection Report, after approval by the

JCDA/CDA, will be typed and distributed as follows:

i) Two copies will be sent to Group Officer-in-Charge of the

Section/Officer In-charge of Sub/Office Inspected within

three weeks (15 working days) of completion of the

Inspection.

(ii) The Section/Sub Office concerned will furnish replies

within one month of receipt of the Inspection Report.



INSPECTION PROGRAMME

The Inspection Group will prepare a tentative programmed for Annual

Inspection of all the Sections in Main Office/Sub Offices financial year by

April each year for approval of the JCDA/CDA. The programmed will be so

prepared as to ensure inspection of all the Section of main Office during the

year and of Sub Offices during the period stipulated by the CDA.

INSPECTION REPORTS OF CGDA

The receipt of the Inspection Reports of CGDA and their further processing

will also be under taken by the Inspection Group. For this purpose, necessary

liaison will be maintained with other Sections/Sub Offices to obtain replies

regarding rectification of the omissions/lapses pointed out and the consolidated

progress reports will be furnished to the CGDA for finalisation of the

observation.

SYSTEMS AND PROCEDURES GROUP

OBJECTIVE

In the light of modern management practices consistent with the requirements

of Defence Services, the objective of this Group is to maintain the audit and

accounting procedure & systems at high level of efficiency by prescribing new

procedures and systems and reviewing or revising existing ones in the areas of

work assigned by the CGDA.

FUNCTIONS

The functions of this Group are to examine various existing procedures and

systems in vogue which need reorientation and stream-lining and to submit

proposals to CGDA for approval. The proposal should contain an analysis of

the existing systems and procedures together with authority, its failure and

short comings as revealed by practical and detailed examination of the practice

and suggestion for improvement together with justification thereof.



The specific areas of work assigned to various Controllers are as given below:

CDA AREA ASSIGNED

Pr. CDA SC PUN E LOCAL AUDIT, STORE

CDA PATNA BORDER ROADS

CDA (Army) MEERUT MES, ACCOUNTS

Pr. CDA WC CHANDIGARH PAY & ALLOWANCES

CIVILIANS

Pr. CDA (NC) JAMMU TA REVIEW OF VARIOUS

FORMS US D IN DAD

The Progress made against the areas undertaken will be shown in the monthly

activity report of the Controller concerned.

TRAINING INFRASTRUCTURE

Training to IDAS Officers of the Defence Accounts Department is imparted

through Departmental Training Institution as well as other National Level

Training Institutions like Lal Bahadur Shastri National Academy, National

Institute of Financial Management, Indian Institute of Public Administration,

Defence Staff College, National Defence College etc.

The Departmental training is imparted through a National Institute of

Management and Accounts, Meerut and Regional Training Centres at Meerut,

Lucknow, Calcutta, Pune and Bangalore. Sufficient exposure is also given to

IDAS Officers about the services and other Defence Organisations including

field attachment and visits to establishments.

Group `B' officers and staff are given orientation/re fresher training at various

Regional Training Centres as well as on the job training given by various

CsDA.

The Training Division of the CGDA is functioning from October 1996 and has

since been conducting Training Programmes/Seminars for Service Officers as

well as Senior Officers of the Defence Accounts Department.

Broadly, the following type of training and development activities are

envisaged:



(a) Induction Programmed (s) for newly recruited employees at all

levels;

(b) Orientation Programmes (s) for the employees at the verge of

promotion at all levels;

(c) In-service training programmes both internal as well external

(i) Value added general courses.

(ii) EDP/IT Coursed.

(iii) Special job related courses.

(d) Pre-examination training courses;

(e) Research and Development avenues

(f) Workshops; and

(g) Seminars

ORGANISATION AND METHODS (MANAGEMENT SERVICES)

CELL

(O & M Cell)

ORGANISATION AND METHODS GROUPS

(A) OBJECTIVES

The Objective of O&M is to ensure rational Organization by keeping in view

span of control's and scalar process to assess requirement of staff on scientific

basis through methods study and standard norm’s in the areas allotted by the

C.G.D.A. and to review the same through periodical systematic review.

The Organization and Methods group deals with study of various sections in

order to achieve economy and efficiency in all areas of work.

(B) FUNCTIONS

The main functions of O&M Group are:

(a) Preparation of Job Description Sheets for nominated sections and for

new areas of work, as well as updating of existing Job Description Sheets

different CsDA are nominated for preparation of Job Description Sheets of

various Sections, by the CGDA as indicated below:



(b)

CDA (Army) Meerut Pay & FA Section

Pr. CDA (WC) Chandigarh E and A/Cs Sections.

CDA PATNA M, T &. Border Roads Sections

Pr. CDA SC Pune G, R & D Stores (Contract & Audit)

Sections

(c) Rationalization of methods of work and standardization of memos for

respective items of work. The Controllers, who are responsible for the

maintenance and revision of particular office manual and other department

manuals, are also responsible for the standardization of memos for repetitive

items of work in the offices/section covered by these Manuals.

(d)

Pr. CDA SC PUNE OM Part-I

ALAM PART-I

ALAM PART II

CDA (Army) Meerut OM PART-VIII

MES LOCAL AUDIT MANUAL MES

ACCOUNTANTS MANUAL

The above responsibility, in respect of section covered by OM Part II will,

however, be shared by the following Controllers.

R, AN, D&FA Sections Pr. CDA WC Chandigarh.

PAY M, T and Border CDA Patna.

Roads Sections

S /C, S/AT and A/Cs Sections CDA (Army) Meerut

NOTE: Functional Controllers will be responsible for the tasks at (a) and (b)

above in respect of Office Manuals and other departmental Manuals pertaining

to their offices.

(C) Examination of the suggestion received from various personnel under

the "Suggestions Scheme" and after scrutiny by Local Suggestion Committee

to project the approved suggestions to CGDA for finalization.

(D) Collection and supply of data and other particulars required by SIU.



(E) The following areas of work are also dealt with:

(i) Introduction of level jumping.

(ii) Improvement in the filing system.

(iii) Introduction of sophisticated office machines.

(iv) Standardization of office Notes of repetitive type.

(v) Elimination of delay in disposals by introducing suitable steps.

(vi) Elimination of inter section forwarding memos and notes

wherever possible.

(vii) Review of printed forms for improving the designs, reducing the

size, combination/elimination of forms.

(viii) Re-organisation of office layout for quicker flow of work and

diminution of avoidable movement of documents and records

(ix) To study the organisational set up in order to remove bottlenecks,

if any.

(F) A renditions of half yearly report to CGDA indicating the areas of O&M

Studies conducted in the Controllers office by 10th July and 10th of January.

Meerut Northern

Command

Addl. CGDA