CHAPTER -14

DELEGATION OF FINANCIAL POWERS RULES

1. Contents of Delegation of Financial Powers Rules (DFPRs) 1978

i. Definitions
ii. General limitation of power to sanction expenditure
iii. Powers of appropriation and Re-appropriation & General Restriction
iv. Powers and procedure for creation of posts.
v. Power to incur Contingent Expenditure.
vi. Powers to incur Miscellaneous Expenditure.
vii. Powers to write off losses.

2. Definitions

2.1 “Administrator” means an Administrator of a Union Territory, by whatever

name designated.

2.2 “Appropriation” means the assignment to meet specified expenditure of

funds included in a primary unit of appropriation.

2.3 “Contingent expenditure” means all incidental and other expenditure

including expenditure on stores which is incurred for the management of an office,
for the working of technical establishment such as a laboratory, workshop,
industrial installation, store-depot, office expenses and the like but does not include
any expenditure, which has been specifically classified as falling under some other
Head of expenditure, such as “Works”, “Tools and Plant”.

2.4 “Department of the Central Government: means a Ministry of a

Department of the Central Government as notified from time to time and includes
the Planning Commission, the Department of Parliamentary Affairs, the
President’s Secretariat, the Cabinet Secretariat and the Prime Minister’s Office.

2.5 “Head of the Department” in relation to an office or offices under his

administrative control, means an authority specified in Schedule I and includes
such other authority or person as the concerned Department in the Central
Government may, by order, specify, as a Head of the Department.

2.6 “Head of Office” means a Gazetted Officer declared as such under Rule
14 of DFPRs, 1978.

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 2.7 “Miscellaneous expenditure” means all expenditure other than
expenditure falling under the category of pay and allowances of Government
servants, leave salary, pensions, contingencies, grants-in-aid, contributions,
works, tools and plant and the like.

2.8 “Non-recurring expenditure” means expenditure other than recurring

expenditure.

2.9 “Primary unit of appropriation” means Sub-Read or standard objects of

expenditure against which budget provision is made; and against which
expenditure - either voted or charged – is accounted for.

2.10 “Recurring expenditure” means the expenditure which is incurred at

periodical intervals.

2.11 “Re-appropriation” means the transfer of funds from one primary unit of
Appropriation to another such unit.

2.12 “Subordinate Authority” means a Department of the Central Government

or any authority subordinate to the President.

3. General Limitations on Power to Sanction Expenditure (Rule 4)

i. No expenditure shall be incurred from public revenues except on legitimate
objects of public expenditure;

ii. A subordinate authority may sanction expenditure or advances of public

money in those cases only in which it is authorized to do so by-
a) The provisions of any law for the time being in force;
b) These or any other rules issued by, or with the approval of President; or
c) Any general or special order of the President or other competent authority;

iii. No expenditure which involves the introduction of a new principle or practice

likely to lead to increased expenditure in future unless the said expenditure
has been subjected to scrutiny and agreed to by the Finance Ministry before
its inclusion in the budget;

iv. A subordinate authority shall exercise the power to sanction expenditure

subject to any general or special order, direction or stipulation, which the
authority delegating or re-delegating such power may issue, prescribe from
time to time.

4. Powers of Appropriation & Re-Appropriation

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4.1 Full powers to the Ministries/Departments of Central Government,
Administrators of the UTs and Head of Departments (H.O.Ds) subject to the
following general restrictions under Rule 10 of these rules:

a) Appropriation and re-appropriation of funds is not permissible in following

cases: -
i. Expenditure not sanctioned by the competent authority;
ii. Re-appropriation from votable to charged expenditure and vice-versa;
iii. One grant/appropriation to charged expenditure, from other
grant/appropriation for charged expenditure;
iv. New services/New instrument of service not contemplated in the budget
as approved by Parliament;
v. Expenditure on “Works” which has not received the administrative
approval/Technical sanction;
vi. From and to the provision for “Deputation or Travel abroad of Scientists”;
vii. Expenditure on new public works not provided in the Budget, which may
cost Rs.50 lakhs or more;
viii. Capital Section to Revenue Section in the same demand for grant or vice-
versa;
ix. From salary head to any other head;
x. From provisions allocated under Externally Aided Projects to non-EAP
projects.

b) Appropriation/re-appropriation is not permissible without approval of Ministry

of Finance in case of re-appropriation:
i. From the Unit “Major Works” to other Units.
ii. Expenditure on works in excess of 15% of authorised limit, if savings
available under appropriate works head.
iii. To meet expenditure on a new public works costing Rs.10 lakhs or more
but less than Rs.50 lakhs.
iv. From and to the provision for the “Secret Service Expenditure”.
v. To augment provision under, salaries, wages, office expenses and other
charges together for entire Grant.
vi. From the provision made for any new item of expenditure for another
purpose.
vii. To augment the Secretariat Expenditure.
viii. In the Revenue Section from Direct Expenditure to grant-in-aid to States
and UTs and vice-versa.
ix. In the Capital Section, from Capital outlay to loans or vice-versa.
x. Augment Travel Expenses exceeding 10% of the existing provisions.
(Powers up to 10% are with the Secretaries of Ministries/Departments).

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 Note: -Re-appropriation under sub-head/ standard object head by more than 25%
or Rs.5.00 crore, whichever is more, is reported to Parliament with last batch of
Supplementary Demand. Prior approval of Additional Secretary /Secretary
(Expenditure) for re appropriation is required after last batch of supplementary has
been sent to Parliament.

5. DFPRs Schedules

Schedule Item

Schedule I List of Heads of Departments

Schedule II Powers to create permanent posts
Schedule III Powers to create temporary posts
Schedule IV Powers of Appropriation & Re-appropriation
Schedule V Powers of Incurring Contingent Expenditure
Schedule VI (Annexure to Schedule V)
Schedule VII Powers to incur Miscellaneous expenditures.
Powers to write of losses.

6. Powers of Subordinate Authorities

i. The Department of Central Government, Administrator & HOD shall have the
powers specified in schedule II, III, IV, V, VI and VII.
ii. Department of Central Government may, confer powers, upon an
Administrator or HOD or any Subordinate authority
a) No re-delegation in respect of the following is allowed:
i. Creation of posts;
ii. Write off of losses;
iii. Re appropriation of funds exceeding 10% of the original budget
provisions, for object head or sub head;
iv. The Administrator or HOD, by an order, may authorise a gazetted
officer under him to exercise all or any of the powers. The Administrator
or HOD shall be responsible for correctness;
v. Powers to incur contingent or miscellaneous expenditure are subject to
Articles required or purchase of stationary stores are made in
accordance to the provisions contained in GFR 2017;
vi. In regard to contingent expenditure on each item in col. 2 of annexure
to schedule 5, conditions specified in col. 3 to be observed;
vii. Miscellaneous expenditure are subject to government rules/instructions
issued from time to time;
viii. Any authority can exercise financial powers delegated to an authority
subordinate to it;
ix. Ministries may further re-delegate powers to subordinate/attached
organisations to meet their requirements. Review of such re-delegation
at least once in three years;
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7. Powers Regarding Creation of Posts-need for creation of posts arises:
i. When a new organisation is set up;
ii. When an existing organisation expands;
iii. Reorganisation of the structure of an organisation after detailed study.
iv. To fulfil certain statutory functions;
v. Up-gradation of posts for various reason(s).

a) Guidelines to create posts (general conditions / restrictions)

i. Post justified on the basis of workload and functional justification;
ii. Post(s) shall be created only in the approved scale or rate of pay;
iii. Temporary post can be created if funds are available during the year of
creation by appropriation or re-appropriation;
iv. Non-plan post can be created only if savings in the succeeding years can be
established;
v. Earlier emphasis was on whether the post to be created was temporary or
permanent (Schedule II & III of the DFPRs). The basis for deciding who is the
competent authority depends on, whether the post is a plan post or a non-plan
post (economy instructions);
vi. Powers delegated to a subordinate authority shall not be used to create
post(s) so as to add to any service or cadre unless that service or cadre is
under the control of that authority; [Exception: CSS/CSSS/CSCS]
vii. In the case of a new project or reorganisation scheme, if creation of some
posts require the approval of the Ministry of Finance, creation of the remaining
posts which may be created under the delegated powers of a subordinate
authority shall be held up till the Ministry of Finance approves the proposal;
viii. Retrospective creation of post(s) should be done only with the approval of the
Finance Minister. Do remember to create related supporting staff posts but
they should not be created in excess of standard scales (e.g. MTS posts,
stenographers, personal staff of senior officers and Ministers, etc.);
ix. Up-gradation of a post amounts to creation of a post;
x. While providing “matching savings” for the creation of non-plan posts,
following principles shall be borne in view:

a) Matching savings” should be provided for by the surrender of posts in the

same group; or
b) It should be provided by the surrender of posts in the immediate line of
promotion;

xi. Whenever higher level posts are abolished, it will be necessary to abolish
personal/supporting staff of that (those) post(s) simultaneously. In addition
to such abolition, it will be desirable to have a work study conducted to
determine what other re-structuring and abolition of lower posts would be
required as a result of the abolition of higher level post(s);
xii. If a post is held in abeyance or remains unfilled for a period of one year or
more, it would be deemed to be abolished. FA will monitor this aspect and
ensure that abolition orders are issued within one month of the post
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 remaining unfilled/held in abeyance for a period of one year. If the post is
required subsequently, the post could be revived with the approval of the FA.
xiii. Delegated powers of the subordinate authorities
Schedules II and III of the DFPRs are no longer relevant because of the
economy instructions imposing ban on creation of posts. Presently for
creation of posts of plan posts as well as non-plan posts, approval of Finance
Ministry is required. In case of posts of the level of Joint Secretary and above,
approval of the Finance Minister / Cabinet is required.

b) Action on the staff inspection unit (SIU)s reports

i. Final report is mandatory in nature. To be implemented by the administrative

department within 3 months from the date of receipt of the Report;
ii. Financial Adviser of the Department concerned is responsible to ensure the
implementation;
iii. Report contains creation of posts as well as reduction of certain other posts,
simultaneous action to be taken to reduce and creating the new posts;
iv. Staff declared surplus may be retained against clear vacancies arising after the
receipt of the SIU Report only for 3 months;
v. Differences over the assessment made by the SIU should be referred within one
month from the date of receipt of report to a Committee consisting of:
Secretary (Expenditure) - Chairman
Secretary (Personnel) - Member
Secretary (Administrative Department concerned) - Member
vi. Surplus posts (earmarked for reduction) not covered by the reference to the
committee to be abolished within 3 months.

8 Powers of Incurring Contingent Expenditure. (Schedule – V)

Authority Extent Of Power
Recurring Non-recurring
Deptt. of Central Govt.
a) Vice President’s Sectt. Full powers Full power
b) Other Deptts. Full powers Full power
Administrators Full powers Full power
Heads of Offices other than Under Rs.1000/- per month Rs.5000/- in each
Secretary in Central Govt. in each case case
Under Secretaries as HOO in Deptts. Rs.2000/- per month Rs.5000/- in each
Of Central Govt. in each case case
9 Annexure to Schedule V [purchase of misc. items/misc. expenditure]
Item of Expenditure Limit Rules/Remarks
Bicycle Full powers Against DGS&D rate contract
Hire of office furniture Full powers
Electric Gas, water Full powers
Fixture/Furniture Full powers As per conditions and
purchase/repair Scale prescribed by Min. of Urban Dev.
Legal charges Full powers

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Item of Expenditure Limit Rules/Remarks
Motor Vehicle Full powers For staff car approval of Secretary
Purchase required
Maintenance &
Upkeep
Repairs to Govt. Full powers
buildings
Repairs to hiredRs.50000 Only if land lord refuses to meet the
building p.a. non- charges
recurring
Rs.6000/-
p.a. recurring
Postal & telegraph Full powers No charges for non-service stamp other
charges than for letters to other countries.
Local purchase of Full powers Subject to rules for supply and use of
stationary stationary stores.
HOO Rs.4000/- p.a.
HOD & Administrator- Full
Telephone charges Full Full powers
All office equipment Full HOO Rec.-1000/- p.m.
Non-Recurring Rs.10,000/-.subject to
general or special orders issued by MOF
& Deptt. Of Supplies from time to time.
Computers Full System to be compatible to NIC
systems. Instructions of Deptt. Of
Electronics from time to time.
Petty Works Rs.30000/-
in each case
Printing & Binding Full powers Rule for Printing & Binding. Govt. Press
when not less than 500 copies. For forms not
executed less than 3000 copies.
through or Petty Printing (Emergent unforeseen)
with the Deptt 1,00,000 p.a.
approval of HOD 20,000p.a.
Director of HOO 10,000 p.a.
Printing Above this within the schedule of Rates
except of Dte. Of Printing.
Publication
Div. & DAVP
under Min. of
I&B
Stores (a) Works Full Powers Sanction for executing work constitutes
(b) Other Stores Full Powers sanction for exp. on purchased stores.

Schedule-VI:
10 Power to incur miscellaneous expenditure (Schedule VI)
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 Authority Limit
Recurring Non-
recurring
Deptts. Of Central Govt.
i) Ministry of Parliamentary Affairs, Full Full
President’s/Vice President’s Secretariat
ii) Others Deptts. Full Full
Administrators
i) All Union Territories except Lakshadweep Full Full
ii) Administrator Lakshadweep Rs.10,000/- PA Rs.40,000/-
PA
Heads of Deptts. Rs.5000/- PA Rs.20,000/-
PA

11 Powers of appraisal and approval of scheme/project

Scheme/Project Appraisal Scheme/Project Approval
Cost Appraisal by Cost Approval by
(Rs.Cr) (Rs.Cr.)
Up to 100 The Financial Adviser Up to Secretary of the
100 Administrative Department
>100 & SFC/DIB Chaired by >100 & Minister-in-charge of the
up to 500 Secretary of the Admn. up to 500 Administrative Department
Dept.
>500 EFC/PIB Chaired by the >500 & Minister-in-charge of the
Expenditure Secretary, up to Admn. Dept. and Finance
Except 1000 Minister, except where
Departments/Schemes/proj special powers have been
ects for which special delegated by the Finance
dispensation has been Ministry
notified by the Competent >1000 Cabinet/Committee of the
Authority Cabinet concerned with the
subject

Expenditure Finance Committee (EFC)

Expenditure Secretary Chairperson
Secretary of the Administrative Ministry/Department Member
Financial Advisor of the Administrative Ministry/Department Member
Adviser, PAMD, NITI Aayog Member
Representative of Budget Division Member
Representatives of concerned Ministries/Agencies Member
Joint Secretary, Department of Expenditure Member-
Secretary
For appraisal of Schemes of Scientific nature, Scientific Adviser may be invited as
Member.
Standing Finance Committee (SFC)
Secretary of the Administrative Ministry/Department Chairperson
Joint Secretary in Charge of the Subject Davison Member
Representative of NITI Aayog Member
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 Financial Advisor of the Administrative Ministry/Department Member-
Secretary
Representative of Department of Expenditure and any other Ministry/Department
that the Secretary/Financial Advisor may suggest may be invited as per
requirement.
Public Investment Board (PIB)
Expenditure Secretary Chairperson
Secretary of the Administrative Ministry/Department Member
Financial Advisor of the Administrative Ministry/Department Member
Adviser, PAMD, NITI Aayog Member
Representative of Budget Division Member
Representative of concerned Ministry/Agencies Member
Joint Secretary, Department of Expenditure Member-
Secretary
For appraisal of scientific projects, Scientific Adviser may be invited as Member.
Delegated Investment Board (DIB)
Secretary of the Administrative Ministry/Department Chairperson
Joint Secretary in Charge of the Subject Davison Member
Representative of NITI Aayog Member
Financial Advisor of the Administrative Ministry/Department Member-
Secretary
Representative of Department of Expenditure and any other Ministry/Department
that the Secretary/Financial Advisor may suggest may be invited as per
requirement.

Governed by DFPR, 1978 and GFR, 2017 and subject to purchase power
delegated for making purchases directly and not through the CPO, a department
has full power to sanction expenditure for purchases and for execution of contracts.

12 Power to write off losses

i. The loss does not disclose a defect in rules and procedures, the amendment of
which require the order of higher authorities of Finance Ministry;
ii. There has been no serious negligence on the part of any Government servant
calling for disciplinary action;
iii. If Integrated/Associate Finance finds that loss reveals basic defect in rule &
procedure, the same be brought to notice of Establishment Division for further
necessary action;
iv. Each case to be reckoned with reference to total value of stores to be written off
on one occasion;
v. Loss arising out of one specific cause should be written off at one time but losses
due to more than one cause can be clubbed together.

13 Schedule –VII Write off of losses

Nature of loss Authority Monetary limit

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Irrecoverable loss of Deptt. Rs.20 Lakh
stores/Public money Administrator Rs.2 lakh
Not due to theft fraud or HOD Rs.50,000
negligence
Department Rs.2 lakh
(b) Other cases Administrator Rs.50,000
HOD Rs.20,000
(b) for other reason

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 Loss of revenue/loan/ Deptt./Admn. Rs.1 Lakh
advance. HOD Rs.10,000

Deficiency & Depreciation Deptt./Admn Rs.50,000

in value of stores HOD Rs.2,500

Condemnation of Motor Deptt. Rs.2 lakh (Subject to life in year &

Vehicle distance run)
a certificate that vehicle is not fit
for commercial use.
to be disposed off in 3 months of
placing of fresh order

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Participants may also refer latest Orders/references:

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