Action on the PAC’s recommendations – Reiteration of instructions on strict financial discipline.

Action on the PAC’s recommendations – Reiteration of instructions on strict financial discipline.

G.I., M.F., O.M. No. F. 1 (14)-E. II (A)/94, dated, 17-10-1994

Sub: – Action on the PAC’s recommendations – Reiteration of instructions on strict financial discipline.

The undersigned is directed to say that the Public Accounts committee (10th Lok Sabha) in its 60th Report (1990-91) and its 74th Report (1991-92) have observed that excess expenditure had occurred under various Grants/Appropriations despite obtaining supplementary provisions. Since the bulk of the supplementary provisions are made at the fag end of the year when the Ministries have sufficient data for estimating their actual requirements, the Committee have found no plausible explanation for incurring substantially high expenditure. The Committee have expressed grave concern at the continued inability of Ministries/Departments to check the expenditure beyond the sanctioned estimates.

2. The Committee have also observed with concern the large-scale savings under various Grants/Appropriation}. In certain cases, substantial savings had occurred due to procurement of supplementary provisions far in excess of actual requirements. The Committee have desired that in future detailed notes in respect of the savings made in a grant or appropriation during each year involving Rs. 100 crores and above be furnished to them along with the explanatory notes regarding excess expenditure incurred.

3. Instructions have been issued vide this Ministry’s O.M. No. F. 1(9)-E. II (A)/92, dated 3-11-
1992, urging upon Ministries/Departments to observe strict financial discipline by regulating expenditure in such a way that budgetary allocations are not exceeded. In view of the above observations of the Public Accounts Committee, it is again emphasized that estimates should be framed accurately after a careful and in-depth examination of the requirement of funds. Ministries I Departments should also devise an effective mechanism for proper and continuous monitoring over the progress of expenditure so as to avoid either excess expenditure or savings. In exceptional cases, where Supplementary Grants become necessary, an accurate estimate of the likely savings should be made so that the supplementary estimates are kept to the minimum, if they can not be avoided altogether. If may also be noted that the authorities administering a grant/allocation shall be fully accountable for the control of expenditure against sanctioned estimates and any slackness will be viewed seriously.

4. All the Ministries / Departments are requested to keep the above instructions in view for strict compliance ..

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