Delegation Of Financial Powers Rules (DFPR) 2024 Complete Notes

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⚡ Quick Answer & AI Exam Snapshot (TL;DR)

Effective 1st April 2024, the Ministry of Finance (Department of Expenditure) notified the new Delegation of Financial Powers Rules (DFPR), 2024 (containing 22 Rules), replacing the 46-year-old DFPR, 1978. Under DFPR 2024, the President delegates financial powers across Ministries, Departments, Administrators of UTs, and Heads of Departments (HoDs), updates the Primary Units of Appropriation (Object Heads under Rule 8), and codifies the revised Appraisal and Approval monetary thresholds for Schemes and Projects across SFC/DIB, EFC, PIB, Minister-in-Charge, Finance Minister, and the Cabinet / CCEA.

1. Key Structural Reforms in DFPR, 2024 (Replacing DFPR, 1978 w.e.f. 1 April 2024)

Issued Under Article 77(3) & Article 150 of the Constitution: Notified by the Department of Expenditure, Ministry of Finance, effective 1st April 2024, superseding the Delegation of Financial Powers Rules, 1978.
Rule 4 — General Limitations on Power to Sanction Expenditure: No expenditure shall be incurred from the Consolidated Fund of India or Public Account without: (i) Sanction of the Competent Authority, AND (ii) Provision of Funds (Appropriation or Re-appropriation) duly authorized by Parliament.
Rule 5 — Residuary Financial Powers: All financial powers NOT specifically delegated to any subordinate authority under DFPR 2024 vest in the Ministry of Finance (Department of Expenditure).
Rule 8 — Primary Units of Appropriation (Standard Object Heads): All budget allocations are distributed across 7 Categories of Object Heads: (A) Revenue Expenditure — 1. Establishment Expenditure (Salaries, Wages, Pensionary Charges, Medical, LTC), 2. Administrative Expenditure (Office Expenses, Rent, Minor Civil Works, Professional Services), 3. Programme/Scheme Expenditure (Grants-in-Aid, Subsidies, Scholarships), 4. Interest & Debt Servicing; and (B) Capital Expenditure (Machinery & Equipment, ICT Equipment, Land & Buildings, Infrastructure Assets, Loans & Advances).

2. Master Appraisal & Approval Thresholds for Schemes and Projects (DFPR 2024 — Exam Favorite!)

Memorize these two tables comparing Appraisal Forums (SFC/DIB vs EFC/PIB) and Approving Authorities (Secretary vs Minister-in-Charge vs Finance Minister vs CCEA/Cabinet):

Project / Scheme Outlay Slab	Appraisal Forum for SCHEMES	Appraisal Forum for PROJECTS (CAPEX / PSUs)
1. Up to ₹100 Crore	Financial Adviser (IFD) in consultation with Secretary of Administrative Ministry.	Financial Adviser (IFD) in consultation with Secretary of Administrative Ministry.
2. Above ₹100 Crore and up to ₹500 Crore	Standing Finance Committee (SFC) Chaired by: Secretary of the Administrative Ministry	Delegated Investment Board (DIB) Chaired by: Secretary of the Administrative Ministry
3. Above ₹500 Crore	Expenditure Finance Committee (EFC) Chaired by: Expenditure Secretary (MoF)	Public Investment Board (PIB) Chaired by: Expenditure Secretary (MoF)

Competent Authority for FINAL APPROVAL of Schemes & Projects (DFPR 2024):

Financial Outlay / Cost Slab	Competent Approving Authority
1. Up to ₹100 Crore	Secretary of the Administrative Ministry / Department
2. Above ₹100 Crore and up to ₹500 Crore	Minister-in-Charge of the Administrative Ministry
3. Above ₹500 Crore and up to ₹1,000 Crore	Minister-in-Charge of the Administrative Ministry AND the Finance Minister
4. Above ₹1,000 Crore	Cabinet / Cabinet Committee on Economic Affairs (CCEA) (Chaired by the Prime Minister)

3. Re-Appropriation of Funds (Rule 10 of DFPR 2024) & Creation of Posts (Rule 11)

Rule 10 — Restrictions on Re-Appropriation of Funds (Strictly Prohibited Without MoF/Parliament Approval):
1. Revenue to Capital / Capital to Revenue: Re-appropriation is NEVER permissible between the Revenue Section and the Capital Section of a Grant!
2. Voted to Charged / Charged to Voted: Re-appropriation is NEVER permissible between Voted and Charged expenditure!
3. Only Within Same Grant: Re-appropriation is permissible only between Primary Units of Appropriation (Object Heads) within the same Grant during the financial year to which the Grant relates.
4. Augmenting ‘Salaries’ Head: Funds provided under ‘Salaries’ cannot be re-appropriated to other heads without approval of the Financial Adviser/MoF.
Rule 11 — Creation, Revival & Abolition of Posts:
- Power to create permanent or temporary posts vests exclusively in the Ministry of Finance (Department of Expenditure) (except specific powers delegated to Cabinet/Strategic Ministries).
- Deemed Abolition of Vacant Posts (2-Year / 5-Year Rule): Any newly created post not filled within 3 years or any existing post remaining vacant for more than 2 years (or 5 years under specific cadre review) is deemed abolished and requires revival approval from the Department of Expenditure.

🎯 High-Yield Exam One-Liners (Last-Minute Revision Box)

The new Delegation of Financial Powers Rules (DFPR), 2024 came into force on 1st April 2024, replacing the DFPR, 1978.
DFPR 2024 contains 22 Rules and is issued by the Department of Expenditure, Ministry of Finance.
Under Rule 5 of DFPR 2024, all residuary financial powers not explicitly delegated vest in the Ministry of Finance.
For Schemes costing above ₹100 Crore and up to ₹500 Crore, the appraisal forum is the Standing Finance Committee (SFC), chaired by the Secretary of the Administrative Ministry.
For Projects costing above ₹100 Crore and up to ₹500 Crore, the appraisal forum is the Delegated Investment Board (DIB), chaired by the Secretary of the Administrative Ministry.
For Schemes costing above ₹500 Crore, the appraisal forum is the Expenditure Finance Committee (EFC), chaired by the Expenditure Secretary.
For Projects costing above ₹500 Crore, the appraisal forum is the Public Investment Board (PIB), chaired by the Expenditure Secretary.
Schemes/Projects with an outlay up to ₹100 Crore are approved by the Secretary of the Administrative Ministry.
Schemes/Projects with an outlay above ₹100 Crore and up to ₹500 Crore are approved by the Minister-in-Charge of the Administrative Ministry.
Schemes/Projects with an outlay above ₹500 Crore and up to ₹1,000 Crore are approved jointly by the Minister-in-Charge and the Finance Minister.
Schemes/Projects with an outlay above ₹1,000 Crore require the approval of the Cabinet / Cabinet Committee on Economic Affairs (CCEA).
Under Rule 10 of DFPR 2024, Re-appropriation of funds between the ‘Revenue Section’ and ‘Capital Section’ of a Grant is strictly prohibited.
Re-appropriation of funds between ‘Voted’ expenditure and ‘Charged’ expenditure is also strictly prohibited.
Re-appropriation from one Demand for Grant to another Demand for Grant is never permissible (only Parliament can authorize a Supplementary Grant).
Under Rule 16 of DFPR 2024, the Head of Office is declared by the Head of Department (HoD) to exercise financial powers for contingent and establishment payments.
Write-off of irrecoverable losses of stores or public money not due to theft, fraud, or negligence is governed by Rule 18 of DFPR 2024.
Single Tender / Proprietary procurement and contingent expenditure powers are exercised in consultation with the Integrated Financial Adviser (IFA).

📝 UPSC & Regulatory Level Practice MCQs (With Detailed Solutions)

Q1. Under the Delegation of Financial Powers Rules (DFPR), 2024, which forum is responsible for the ‘Appraisal’ of a Central Sector Scheme having an estimated outlay of ₹350 Crore, and who is its Chairperson?

A. Expenditure Finance Committee (EFC), chaired by the Expenditure Secretary
B. Standing Finance Committee (SFC), chaired by the Secretary of the Administrative Ministry
C. Public Investment Board (PIB), chaired by the Finance Secretary
D. NITI Aayog Appraisal Wing, chaired by the CEO of NITI Aayog

Correct Answer: (B) — Under DFPR 2024, schemes with an outlay above ₹100 Crore and up to ₹500 Crore are appraised by the Standing Finance Committee (SFC), which is chaired by the Secretary of the Administrative Ministry (whereas schemes above ₹500 Crore are appraised by the EFC).

Q2. Under DFPR 2024, who is the Competent Authority for granting final ‘Approval’ to a Government Scheme or Project with a financial outlay of ₹750 Crore?

A. Secretary of the Administrative Ministry
B. Minister-in-Charge of the Administrative Ministry alone
C. Minister-in-Charge of the Administrative Ministry AND the Finance Minister
D. Cabinet Committee on Economic Affairs (CCEA)

Correct Answer: (C) — Under the approval slabs codified in DFPR 2024: up to ₹100 Cr = Secretary; >₹100 Cr to ₹500 Cr = Minister-in-Charge; >₹500 Cr to ₹1,000 Cr = Minister-in-Charge AND Finance Minister; and above ₹1,000 Cr = Cabinet / CCEA.

Q3. Consider the following statements regarding ‘Re-appropriation of Funds’ under Rule 10 of the Delegation of Financial Powers Rules (DFPR), 2024:
1. Re-appropriation of funds is permissible between the Revenue Section and the Capital Section of the same Grant with the approval of the Head of Department.
2. Re-appropriation of funds is NOT permissible between ‘Voted’ expenditure and ‘Charged’ expenditure.
3. Re-appropriation is permissible only during the financial year to which the Grant relates.
Which of the statements given above are correct?

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3

Correct Answer: (B) — Statement 1 is incorrect because re-appropriation between the Revenue Section and Capital Section of a Grant is strictly prohibited under all circumstances. Statements 2 and 3 are correct.

Q4. For a capital investment ‘Project’ (as distinct from a Scheme) having an estimated cost of ₹800 Crore, which inter-ministerial body conducts the appraisal, and who chairs it?

A. Delegated Investment Board (DIB), chaired by the Secretary of the Administrative Ministry
B. Public Investment Board (PIB), chaired by the Secretary, Department of Expenditure
C. Standing Finance Committee (SFC), chaired by the Financial Adviser
D. Public Accounts Committee (PAC)

Correct Answer: (B) — For capital Projects above ₹500 Crore, the appraisal forum is the Public Investment Board (PIB), chaired by the Expenditure Secretary, Ministry of Finance (whereas Projects between ₹100 Cr and ₹500 Cr are appraised by the DIB).

Q5. Under Rule 5 of the Delegation of Financial Powers Rules (DFPR), 2024, in whom do all ‘Residuary Financial Powers’ (powers not specifically delegated to any subordinate authority) vest?

A. Comptroller and Auditor General of India (C&AG)
B. Cabinet Secretary
C. Ministry of Finance (Department of Expenditure)
D. Public Accounts Committee of Parliament

Correct Answer: (C) — Under Rule 5 of DFPR 2024, all financial powers not specifically delegated to any authority by these rules vest in the Ministry of Finance.

❓ Frequently Asked Questions (Exam FAQs)

Q: What is the difference between SFC/EFC and DIB/PIB under DFPR 2024?

SFC (₹100–500 Cr) and EFC (>₹500 Cr) are appraisal forums for Government ‘Schemes’ (programmes/welfare/departmental schemes), whereas DIB (₹100–500 Cr) and PIB (>₹500 Cr) are appraisal forums for capital ‘Projects’ (including PSU/JV capital projects).

Q: Can savings under one Demand for Grant be re-appropriated to another Demand for Grant?

Never. Under Constitutional budgetary rules and Rule 10 of DFPR 2024, each Demand for Grant voted by Lok Sabha is a water-tight compartment; funds cannot be transferred from one Grant to another without Parliamentary authorization via a Supplementary Grant.

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