April 28th, 2016
Attention is invited to this Ministry’s O.M. issues under letter F.1(30)-B(AC)/2004 dated 7.1.2005 (copy printed on the reserve side of this OM), wherein the guidelines/instructions to be followed on creation of reserve/corpus funds in Public Account of India were issued.
Despite issuing instruction restraining the creation of reserve/corpus funds in Public Account of India, there has been a surge on the demands/proposals from Ministries/Departments for creation of dedicated reserve/corpus funds in the Public Account of India. The funds so created in the Public Account and the balances lying idle therein create a liability for the Government alonwith inflexible entitlements. It is the endeavor of the Governemnet to ensure prioritization of expenditure considering various competing needs.
While the reserve/corpus funds are agreed for creation with dedicated receipts in the form of cess or levies, funds from Government’s contribution out of its borrowings are best avoidable.
Keeping this in view, Ministries/Departments are requested to strictly follow the instructions/guidelines conveyed in the Ministry’s O.M. dated 7.1.2005 while processing the proposals/suggestions for creation of reserve/corpus funds in the Public Account of India.