Delegation of Financial Powers Rules 2024 — Rules 16 and 17, Schemes, Grants-in-Aid and Loans

1. Sanctioning Expenditure on Schemes and Projects (Rule 16(1))

Without prejudice to the general powers under Rule 12, a Department may sanction expenditure on any scheme or project as per the powers delegated by the Finance Ministry from time to time, but only once the outlay has been approved by the Competent Authority in accordance with the appraisal and approval process prescribed by the Finance Ministry. Crucially, Rule 16(1) itself states that the power of appraisal and approval under this rule shall not be delegated — consistent with what we saw in Rule 12’s proviso, which lists Rule 16 as one of the three powers a Department can never sub-delegate.

The current appraisal and approval framework for public-funded Schemes and Projects continues to be governed by the Department of Expenditure’s O.M. No. 24(35)/PF-II/2012 dated 5 August 2016, until superseded by further orders — so the practical appraisal mechanics (PIB, EFC, SFC as applicable by project size) sit outside DFPR 2024 itself, in that linked O.M.

2. Contracts Inseparably Linked to a Scheme (Rule 16(2))

Where the award of a contract, purchase, or consultancy is inseparably linked with an approved Scheme, that expenditure is processed as per the financial limits laid down for sanctioning the Scheme or Project itself — not the general Rule 11 purchase ceilings. This dovetails directly with the PIB/EFC exception we examined under Rule 11(6): once a Scheme’s appraisal has fixed specific financial limits for its associated procurement, those limits travel with the Scheme rather than reverting to the standard Secretary-level ceilings.

3. Grants-in-Aid, Scholarships and Loans (Rule 17)

Departments of the Government of India and Administrators have full powers to sanction grants-in-aid, including scholarships, and loans, subject to two conditions:

• The grant, including scholarships, must be in accordance with rules or principles prescribed with the Finance Ministry’s previous consent, and the sanction must carry a certificate confirming this.
• For a loan, the rate of interest and the repayment period must be fixed with the Finance Ministry’s previous consent — unless these are already prescribed in a general or special order of the Department itself.

The certificate requirement is not a formality to be glossed over: it is the documented assurance, on the face of the sanction, that the underlying scheme of grant or scholarship rules has already received Finance Ministry concurrence, so that individual sanctions issued under it do not each need to be separately routed to Finance.

4. Why Rule 16 Cannot Be Delegated

The rationale for keeping Rule 16’s appraisal-and-approval power non-delegable is structural: once a Project or Scheme is approved, it typically commits Government funds across multiple years and often sets the financial-limit framework that will govern all subsequent procurement under it (as Rule 16(2) makes clear). Allowing this gatekeeping function to be pushed down the hierarchy would risk fragmenting appraisal discipline across dozens of subordinate authorities, each potentially approving projects using inconsistent assumptions. Keeping appraisal at the Department’s own level (guided by PIB/EFC/Cabinet as per scale) preserves a single, consistent standard of scrutiny.

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