General Financial Rules (GFR), 2017

Government financial rules end to end — budget, accounts, procurement thresholds and the accountability chain from DDO to CAG.

13 sections · 60 explained questions · 11 ★ volatile facts · English and Hindi

At a Glance (Prelims Gold)

Point	Detail
Full form	General Financial Rules, 2017
Issued by	Ministry of Finance, Department of Expenditure
Date	11 February 2017, signed by Finance Secretary Ashok Lavasa
Replaced	GFR 2005
Total Rules	324 Rules in 12 Chapters
Also contains	12 Appendices and 26 Forms (GFR 1 to GFR 26)
Nature	Executive instructions — not an Act of Parliament
Interpreting authority	Ministry of Finance (Rule 5)
Modification authority	Ministry of Finance (Rule 6)
Applies to	All Central Ministries/Departments, attached & subordinate bodies; Autonomous Bodies unless their own approved bye-laws provide otherwise (Rule 1)
Biggest innovation	GeM under Rule 149
Latest major amendment	MoF OM No. F.1/3/2024-PPD dated 10 July 2024; later amendments to Rule 310 (5 May 2026) and Rule 151 (8 May 2026)
Latest compilation	Updated up to 31 January 2026
Official source	doe.gov.in

Definition to quote: "General Financial Rules are a compilation of rules and orders of Government of India to be followed by all while dealing with matters involving public finances. These rules and orders are treated as executive instructions."

The rest of this note

At a Glance (Prelims Gold)
Why GFR 2017 Came (Background — Mains Value)
Constitutional and Legal Foundation
Chapter Structure (Corrected, per the Official 2017 Text)
Chapter 1: The Opening Six Rules (Frequently Misquoted)
Chapter 2: Financial Management and Propriety
Chapter 3: Budget (Highest-Yield Chapter for UPSC)
Chapter 4: Government Accounts
Chapter 6: Procurement (Operational Core)
GFR in the Accountability Chain (Mains Framework)
Critical Analysis (For Mains "Critically Examine" Questions)
Prelims Rapid Fire
Expected Questions

Three questions from this note, solved

Match List-I with List-II:

List-I (Constitutional provision)	List-II (Subject)
I. Article 112(3)	1. Vote on Account
II. Article 113(2)	2. Expenditure charged on the Consolidated Fund
III. Article 115(1)	3. Estimates requiring a vote of the House of the People
IV. Article 116	4. Supplementary, additional or excess grants

Select the correct answer using the code given below:

(a) I-2, II-3, III-4, IV-1
(b) I-3, II-2, III-1, IV-4
(c) I-2, II-4, III-3, IV-1
(d) I-1, II-3, III-4, IV-2

Answer (a).

★Article 112(3) lists the expenditure charged on the Consolidated Fund of India, which is not submitted to the vote of Parliament; ★Article 113(2) requires the remaining estimates to be submitted as demands for grants to the House of the People; ★Article 115(1) covers supplementary, additional or excess grants, worked out in Rule 66; and ★Article 116 provides for a vote on account, vote of credit and exceptional grant, invoked by Rule 55. (b) it inverts the charged and voted provisions; (c) it swaps supplementary grants with the voted estimates; (d) it misplaces the vote on account under the charged provision.

Q54

Consider the following statements about preference policies in Central Government procurement: I. A minimum of 25 per cent of annual procurement is to be made from Micro and Small Enterprises. II. Within that, 4 per cent is earmarked for enterprises owned by Scheduled Caste or Scheduled Tribe entrepreneurs and 3 per cent for women-owned enterprises. III. Of all textiles required, at least 20 per cent is to be procured from items of handloom origin, exclusively from the Khadi and Village Industries Commission and/or handloom clusters such as cooperative societies. Which of the statements given above are correct?

(a) I and II only
(b) I and III only
(c) II and III only
(d) I, II and III

Answer (d).

All three are correct. The Public Procurement Policy for Micro and Small Enterprises fixes a minimum of ★25 per cent of annual procurement from such enterprises, with ★4 per cent earmarked for Scheduled Caste and Scheduled Tribe owned units and ★3 per cent for women-owned units, and Rule 153 requires at least ★20 per cent of all textiles required to be items of handloom origin bought from the Khadi and Village Industries Commission and/or handloom clusters such as cooperatives. (a) it drops the handloom reservation; (b) it drops the sub-targets; (c) it drops the overall 25 per cent obligation.

Q41

Consider the following statements: I. The Public Financial Management System is an integrated financial management system of the Controller General of Accounts. II. Implementing agencies must be registered on it down to the last level so that fund flow and unspent balances can be tracked. III. Direct Benefit Transfer covers cash transfers only and not in-kind transfers. Which of the statements given above are correct?

(a) II and III only
(b) I and II only
(c) I and III only
(d) I, II and III

Answer (b).

Rule 86 describes the Public Financial Management System as an integrated system of the Controller General of Accounts used for sanction, bill processing, payment, receipt management and reporting, and requires all implementing agencies to be registered down to the last level, with payments released just in time. Statement III is wrong: Rule 87 covers both in-kind and cash transfers, including honorariums to community workers, and replaces physical utilisation certificates with electronic ones. (a) it accepts the false statement III and drops I; (c) it accepts III; (d) it accepts III.

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