General Financial Rules(GFR)
7-Mar-2017: FM releases the Revised General Financial Rules (GFR) 2017
The Finance Minister released the Revised General Financial Rules (GFRs) – 2017 at the Conference of the Financial Advisors (FAs) in the national capital. The Conference of FAs was organised by the Department of Expenditure, Ministry of Finance, Government of India. The Finance Minister appreciated the role of Financial Advisors in the smooth implementation of Budgeting and Accounting reforms. Shri Jaitley stressed on the challenges lying ahead for the Government as a whole to ensure that expenditure on schemes and projects should start from the beginning of the financial year to leverage the early passing of the Budget. The Finance Minister also applauded the efforts that went into bringing- out the Revised GFRs within a very short span of time to meet the need of the changing environment.
Revised GFR -2017 aims to provide a framework within which an organization manages its business in a financially prudent manner without compromising its flexibility to deal with varied situations and that the new GFRs 2017 will enable an improved, efficient and effective framework of fiscal management while providing the necessary flexibility to facilitate timely delivery of services.
The Conference also deliberated upon the various challenges and opportunities before the Financial Advisors and their key role in the implementation of the Schemes of the Government and providing innovative solutions in the changed environment in public financial management. Conference of Financial Advisors is a forum through which the Finance Secretary & Secretary (Expenditure), Ministry of Finance holds detailed deliberations with all the Financial Advisors posted in various Ministries/Departments.
The GFRs are rules and orders dealing with matters involving public finances. The General Financial Rules (GFRs) lay down the general rules applicable to Ministries / Departments, and detailed instructions relating to procurement of goods are issued by the procuring departments broadly in conformity with the general rules, while maintaining flexibility to deal with varied situations. General Financial Rules were issued for the first time in 1947 bringing together in one place all existing orders and instructions pertaining to financial matters. These have subsequently been modified and issued as GFRs 1963 and GFRs 2005.
In the last few years, the Government has made many innovative changes in the way it conducts its business. Reforms in the Government Budgeting like removal of distinction in non-plan and plan expenditure, merger of Railway Budget with General Budget, focusing on outcomes through an improved Outcome Budget document, all needed to be reflected in the GFRs. Increased focus on Public Finance Management System (PFMS), reliance on the Direct Benefit Transfer (DBT) Scheme to ensure efficient delivery of entitlements, introduction of new e-sites like Central Public Procurement Portal, Government e-Marketing (GeM) Portal, Non-Tax Revenue Portal have also necessitated revision of the existing GFRs to keep them in tune with the changing business environment. The objective was to make the GFRs facilitate efficiency while following principles of accountability and procedures of financial discipline and administrative due diligence. New rules on non-tax revenues, user charges, e-receipts portal have been added in addition to the manner in which Autonomous Bodies are run.
Fund of Fund for Start-ups (FFS)
22-Mar-2017: Cabinet approves of proposal to establish a Fund of Fund for Start-ups (FFS)
The Union Cabinet has approved the following proposals with regard to the Fund of Funds of Start-ups (FFS) which was established in June, last year with a corpus of Rs. 10,000 crores.
- Alternate Investment Funds (AIFs) supported by FFS shall invest at least twice the amount of contribution received from FFS in Start-ups. Further, if the amount committed for a Start-up in whole has not been released before a Start-up ceases to be so, the balance funding can continue thereafter.
- It was also decided that operating expenses for carrying out due diligence, legal and technical appraisal, convening meeting of Venture Capital Investment Committee, etc. would be met out of the FFS to the extent of 0.50% of the commitments made to AIFs and outstanding. This will be debited to the fund at the beginning of each half year; i.e. April 1 and October 1.
The Union Cabinet in its meeting held on 22/06/2016 had approved the proposal to establish a Fund of Funds for Start-ups (FFS) with a total corpus of Rs.10000 crore, with contribution spread over the 14th & 15th Finance Commission cycles based on progress of implementation and availability of funds. It was decided that the FFS shall contribute to the corpus of Alternative Investment Funds (AIFs) for investing in equity and equity linked instruments of various start-ups at early stage, seed stage and growth stages.
The FFS is being managed and operated by Small Industries Development Bank of India (SIDBI). FFS contributes to SEBI registered Alternative Investment Funds (AIFs) that may go up to a maximum of 35% of the corpus of the AIF concerned.
The Cabinet on 22.06.2016 had decided that the corpus of Fund of Funds along with counterpart funds raised by the AIFs in which FFS takes equity would be invested entirely in Start-ups. It has been pointed out to the Department during its interactions with various stakeholders that investors in the AIFs would prefer that the portfolio of AIFs is adequately diversified to manage the investment risks appropriately and if the entire pool of funds of the AIF is invested in Start-ups, it poses unacceptable risks to the investors of such AIFs.
The other issues raised by stakeholders were that the process of funding of Start-ups by AIFs is long drawn which starts from pitching by a Start-up, commitment by the AIF and then release of funds in tranches. Thus it is possible that before release of the final instalment the turnover of the Start-up crosses Rs. 25 crores but it still needs funds to meet its growth requirements. Besides, Start-ups need access to funds through various stages of their life cycle, viz. early stage, seed stage and growth stage.
It was also pointed out to the Department by SIDBI that the present provisions don’t provide for SIDBI to get compensated for activities done post sanction to AIFs.
Swachh Bharat Kosh (SBK)
9-Mar-2017: Rs 25 crores donated towards the Swachh Bharat Kosh (SBK)
The Finance Secretary Shri Ashok Lavasa, Chairperson of the Swachh Bharat Kosh (SBK), received a cheque of Rs 25 crores towards the SBK as part of REC’s Corporate Social Responsibility (CSR).
REC has also contributed Rs. 25 Crore towards this noble cause earlier in August 2016, thus making a total contribution of Rs. 50 Crore to the Kosh. Apart from this, the Corporation has also constructed 194 toilets during the current fiscal. REC is committed to supporting the Government of India’s mission for Swachh Bharat. As a responsible Corporate Citizen, the cause of nation building has always been high on REC’s priorities. As a step in this direction, REC had, during the FY 2014-15 and 2015-16, constructed a total of 12,292 toilets. These toilets are spread across 33 districts in 6 states.
The SBK was set up to attract CSR funds from corporate sector and contribution from individual philanthropists to achieve the objective of Clean India (Swachh Bharat) through “Swachh Bharat Abhiyan” by the year 2019, the 150th year of birth anniversary of Mahatma Gandhi. The SBK is to be used to achieve the objective of improving cleanliness levels in rural and urban areas, including in schools. The allocation from the SBK is being used to supplement departmental resources for such activities. All donations towards Swachh Bharat Kosh are eligible for deduction of 100% from the total Income Tax. The contributions to SBK can also be included by companies towards CSR under the Companies Act, 2013.
Rural Electric Corporation (REC) Limited is an enterprise of the Government of India under the Ministry of Power, mandated to provide financing for the power sector development across the value chain in the field of generation, transmission, distribution and above all, renewable energy development. REC is the coordinating agency for implementing flagship programs of the government in power sector that include Deendayal Upadhyaya Gram Jyoti Yojana scheme, the Ujwal DISCOM Assurance Yojana (UDAY) programme and several other initiatives of the government to ensure “Power for All”.
25-Nov-2014: Government Announces Swachh Bharat Kosh Operational Guidelines
The Government announced Swachh Bharat Kosh Operational Guidelines, 2014 which will come into force with immediate effect.
Objective of Setting-up the Fund (Kosh):
Individuals and philanthropists have expressed interest in contributing to efforts to achieve the objective of Clean India (Swachh Bharat) by the year 2019. The Swachh Bharat Kosh has been set up to facilitate channelization of philanthropic contributions and Corporate Social Responsibility (CSR) funds towards this cause.
Governing Council:
The Swachh Bharat Kosh (henceforth called Kosh) would be administered by a Governing Council chaired by Secretary, Department of Expenditure. Other Permanent members will be Secretary (Planning), Secretary (Drinking Water and Sanitation), Secretary (Urban Development), Secretary (Housing and Urban Poverty Alleviation), Secretary (Rural Development), Secretary (Panchayati Raj) and Secretary (School Education and Literacy). Departmental Secretaries from Tourism, Culture or any other department would be invited as and when their proposals are being deliberated.
Secretariat:
The Governing Council would be assisted by a division to be set up in the Department of Expenditure, which will serve as its secretariat, headed by an Administrator, at the Joint Secretary level.
Bank Account & Receipt of Contribution:
Contributions from companies and philanthropists shall be received in a single bank account opened in the State Bank of India, Central Secretariat Branch, North Block, New Delhi. The bank account will be operated jointly by the Administrator and the Chief Controller of Accounts, Ministry of Finance. Donations into the Kosh may be made through online payments through net banking, or by debit and credit cards or Cheque/Demand Draft. The donor would receive an automated, digitally signed receipt of the contributions. Besides, the following mode of acknowledgement with regard to receipt of donations will be adopted:
While efforts would be made to optimally apply the funds in the Kosh to its objectives, any temporarily idle balance may be invested in fixed deposits with the State Bank of India, with the approval of the Governing Council. Any interest thus earned would be ploughed back into the Kosh, and used for furthering its objectives.
Admissible Activities:
The Kosh will be used to achieve the objective of improving cleanliness levels in rural and urban areas, including in schools. It may also be enabled to bring out innovative / unique projects and girl toilets will be the priority area to start with. The following broad activities will be financed from the Kosh:
Construction of community/individual toilets in rural areas, urban areas, in elementary, secondary and senior secondary government schools, aanganwadis (Centres that provide support to children below 6 years and their mothers under the Integrated Child Development Scheme, Ministry of Women and Child Development);
Renovation and repair of dysfunctional community/individual toilets in elementary, secondary and senior secondary government schools and aanganwadis;
Construction activity for water supply to the constructed toilets;
Training and skill development to facilitate maintenance of constructed toilets and to ensure its inter-linkages with education on hygiene;
Other initiatives of improving sanitation and cleanliness in rural and urban areas including solid and liquid waste management;
Any other activity to improve sanitation in the country as decided by the Governing Council.
Proposing of Projects:
The line Ministries will propose projects to the Governing Council pertaining to the above activities. The states can also apply for the funds of the Kosh through the respective line Ministries. The allocation from the Kosh will be used to supplement departmental resources for the above-mentioned activities. However, specific suggestions regarding creation of assets, coming from donors making contributions of more than Rs. 10 crores, may be considered by the line Ministries, if otherwise not in conflict with these guidelines.
Approval and Release of funds:
The Governing Council will meet at least once every quarter, or sooner, if required, to assess the feasibility of funding the projects/activities proposed by the line Ministries. The Governing Council will prioritize the projects proposed by the line ministries, on the basis of criteria to be laid down by itself.
Implementation:
The implementation of the projects/activities would be carried out by the existing institutions already in place at the State, District, and Sub District level to execute the projects/activities. No new institutions will be created.
The costing of projects will be guided by the prevalent cost norms of Centrally Sponsored Schemes (CSS) of similar nature. These will be used in deciding the cost estimates of the projects to be financed from the Kosh.
Monitoring:
The line Ministries administratively concerned with the projects will closely monitor the utilization of the funds received from the Kosh and would provide a quarterly progress report to the Governing Council and the Finance Minister.
The progress of activities undertaken from the Kosh will be reviewed by the Finance Minister on a quarterly basis and by the Prime Minister from time to time.
The Ministries would ensure that the projects/activities undertaken from the Kosh are not duplicated.