Orientation Course

ORIENTATION COURSE FOR AAO/SO (A)
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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.

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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

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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.

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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.

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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.

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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-

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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

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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

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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

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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

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entered into by the Department of Defence Supply, payments for purchases
made by Army Purchase Organization and the work relating to London
Account Current.

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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.

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As on 27.04.2007

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O Or rg ga an ni iz za at ti io on n: : C CD DA A
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JCDA
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DCDA/ACDA
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DCDA/ACDA
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DCDA/ACDA

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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.

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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

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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.

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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

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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).

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(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:

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(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.

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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 Ì am directed to say' or `The
undersigned is directed to convey', which has the effect of distancing the

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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.

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(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 Ìmmediate' 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

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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

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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 prcis 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.

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(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

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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:

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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? `

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- 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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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"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.

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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

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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 À'/`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 À' 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

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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.

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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 À' 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 À' / 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.

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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.

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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.

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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".

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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.

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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

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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

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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.

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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.

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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

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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.

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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

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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.

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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-

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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.

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(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

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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.

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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

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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

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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.

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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.

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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

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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.

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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.

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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

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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

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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:-

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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.

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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.

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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.

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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

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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.

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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.

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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.

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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.

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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.

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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. Gregors Theory X), whereas the
democratic style assumed that the leaders 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. Gregors 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

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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 individuals performance
level and determining the appropriate leadership style suitable for the
individual.

A persons 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.

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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.

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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?

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[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,
dont be annoyed when a workers 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 employees
cooperation is to uncover an employees 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
its 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.

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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, Managers role in motivating is an interesting job. Then, what is the
managers role in the process of motivation at the individuals work place.
Broadly speaking a managers 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
workers 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.

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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 peoples 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.

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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:

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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.

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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.

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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

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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.

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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

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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.

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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

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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.

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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.

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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.

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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.

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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.

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(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.

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(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.

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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.

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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

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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 Controllers 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 À' 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

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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]

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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.

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(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.

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(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.

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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.

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(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.

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(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.

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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

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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.

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BUDGBT DOCUMENTS
PRESENTED TO I NDI AN PARLI AMENT

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

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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

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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

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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

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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,

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(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.

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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.

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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

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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.

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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.

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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

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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.
.

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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.

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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.

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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

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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

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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

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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.

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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.

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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

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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

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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.

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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

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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.

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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.

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(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.

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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.

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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

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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

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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.

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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.

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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

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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.

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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.

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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.

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(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.

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(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.

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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 organisations 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 Commissions 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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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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.

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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.

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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;

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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.

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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.

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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.

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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)]

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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)

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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.

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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.

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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-

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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)

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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

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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

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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.

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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.

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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

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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.

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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.

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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

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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

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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

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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.

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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.

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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.

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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.

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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;

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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

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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 èrase' 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 èscape' 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.

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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

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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 users 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.

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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.

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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 norms 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:

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(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.

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(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

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