General Financial Rules (GFR) 2017
Key Highlights and Importance
The General Financial Rules (GFR) 2017 are a set of principles that provide a framework for financial management and control in government departments and public sector organizations in India. These rules were last updated in 2017, replacing GFR 2005, to ensure efficiency, transparency, and accountability in public finance and align with the government's focus on digitalization, ease of doing business, and modern financial practices.
Key Features of GFR 2017:
Applicability: GFR 2017 applies to all Central Government offices, autonomous bodies, and organizations wholly or substantially financed by the Central Government.
Procurement Policies:
- Emphasizes transparency and fairness in procurement processes.
- Introduces mandatory e-procurement for transactions above a specified threshold.
- Ensures that open tendering processes are followed to encourage competition.
Digital Payments:
- Promotes digital transactions, aligning with the government's vision of a cashless economy.
- All payments exceeding INR 5,000 must be made through electronic means, barring exceptional cases.
Performance Management:
- Highlights the need for performance-based outcomes in projects.
- Introduces the concept of outcome budgeting to link financial allocation to the delivery of services and goods.
Asset Management:
- Stresses the need for proper asset management, including their procurement, maintenance, and disposal.
- Ensures that assets are utilized effectively and that their disposal is carried out transparently and in a time-bound manner.
Grant-in-aid:
- Institutes stricter control over the release of grants to autonomous bodies.
- Grantee institutions must submit utilization certificates to ensure proper usage of funds.
Audit and Internal Control:
- Encourages stringent internal audit processes to maintain financial propriety.
- Ensures that deviations or violations of rules are scrutinized and reported to the relevant authorities for corrective action.
Accountability and Transparency:
- Emphasizes financial discipline, accountability, and enhanced transparency across government departments and institutions.
- Ensures public financial management is in compliance with the Right to Information (RTI) Act.
Importance of GFR 2017:
The GFR 2017 seeks to modernize the financial processes of government departments by promoting efficiency, integrity, and accountability. It ensures that public funds are spent in the most effective manner while minimizing waste and preventing corruption. Additionally, the introduction of e-governance mechanisms, performance-linked budgeting, and tighter control over public expenditures help in the optimal allocation of resources.
In summary, GFR 2017 is a significant reform that provides comprehensive guidelines to safeguard the effective management of public funds and assets, ensuring that government departments and agencies follow best practices in financial administration.