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Past Questions — 2025
When is utilization certificate not required from institutions and organisations?
A)
Grants in aid are given on the basis of reimbursement for duly audited accounts
B)
Non-recurring grants for capital assets
C)
Grants for centrally sponsored schemes
D)
Recurring grants for specific schemes
Under the General Financial Rules (GFR), a Utilization Certificate (UC) is required to certify that funds advanced by the government have been used for the purpose for which they were sanctioned. However, when grants-in-aid are provided on a 'reimbursement basis,' the institution first spends the money and then submits audited accounts (bills and vouchers) to prove the expenditure. Since the government only releases the funds after the expenditure has already been verified through audited accounts, a separate Utilization Certificate is not required because the audited accounts themselves serve as the proof of utilization.
Comparing other options:
- Option (b): Non-recurring grants for capital assets explicitly require UCs to ensure the asset was created as intended (as per GFR Rule 238).
- Option (c): Centrally sponsored schemes are subject to strict monitoring and always require UCs for the release of subsequent installments.
- Option (d): Recurring grants for specific schemes require UCs to ensure funds are not diverted or parked.
Which department under the Ministry of Finance is responsible for implementing the financial covenants laid down in the agreements executed by the departments and the External Funding Agencies?
A)
Ministry of External Affairs
B)
Office of the Controller of Aid Accounts and Audit
C)
Ministry of Home Affairs
D)
Office of the Controller General of Accounts
The Office of the Controller of Aid Accounts and Audit (CAA&A) is the specialized wing under the Ministry of Finance, Government of India, specifically tasked with the accounting and auditing of external assistance. Its primary responsibility is to ensure that the financial covenants, terms, and conditions stipulated in the loan or grant agreements executed between the implementing departments of the Government of India and External Funding Agencies (such as the World Bank, ADB, etc.) are strictly adhered to and implemented.
Why other options are incorrect:
- a. Ministry of External Affairs: While it handles diplomatic relations, it is not the financial implementing body for internal accounting covenants of external aid.
- c. Ministry of Home Affairs: This ministry deals with internal security and administration, not the financial management of external funding agreements.
- d. Office of the Controller General of Accounts (CGA): While the CAA&A falls under the broader umbrella of the CGA, the specific functional responsibility for external aid covenants is vested in the Office of the Controller of Aid Accounts and Audit.
Who gives authorization for drawing of cheques from the treasury for cheque drawing departments?
A)
The Treasury Officer
B)
The Accountant General
C)
The Reserve Bank of India
D)
The Secretary of the Department
In the context of Treasury Rules and Government Accounting, 'Cheque Drawing Departments' are specific offices authorized to draw funds directly from the treasury via cheques rather than through traditional bills. This authorization is a matter of financial control and accounting oversight. The Accountant General (AG), as the principal accounting authority of the state, is responsible for maintaining the accounts of the government and authorizing which departments are permitted to operate as cheque-drawing offices to ensure fiscal discipline and proper auditing.
- Option (a) The Treasury Officer executes the payment but does not grant the initial authorization for a department to become a cheque-drawing office.
- Option (c) The Reserve Bank of India manages the government's banking accounts at the macro level but does not authorize individual departmental drawing powers.
- Option (d) The Secretary of the Department manages the administration but must seek authorization from the accounting authority (AG) to operate under this specific financial mechanism.
The difference between capital and revenue expenditure is best described by.
A)
Capital expenditure relates only to salaries, while revenue expenditure relates only to infrastructure
B)
Capital expenditure creates assets, whereas revenue expenditure is incurred for the normal running of government departments and maintenance of existing assets
C)
Revenue expenditure is always larger than capital expenditure
D)
Capital expenditure includes all expenditure booked to the Consolidated Fund, while revenue expenditure is charged only to the Contingency Fund
In government accounting and public finance, expenditure is categorized based on its nature and impact on the balance sheet:
1. **Capital Expenditure**: This refers to funds used by the government to acquire or create long-term assets (like roads, bridges, buildings, or machinery) or to reduce liabilities. These expenditures provide benefits over a period longer than one year.
2. **Revenue Expenditure**: This refers to the recurring expenses incurred for the day-to-day operational functioning of the government. This includes salaries, pensions, office supplies, and the routine maintenance of existing assets. These expenditures do not result in the creation of a new asset.
**Analysis of Options:**
- **Option a** is incorrect because it reverses the logic; salaries are revenue expenditure, and infrastructure is capital expenditure.
- **Option b** is correct as it accurately defines the fundamental difference: capital expenditure creates assets, while revenue expenditure sustains operations.
- **Option c** is incorrect because the size of the expenditure (which one is larger) varies by budget and policy; it is not a defining characteristic of the difference.
- **Option d** is incorrect because both capital and revenue expenditures are generally drawn from the Consolidated Fund of the State/India; the Contingency Fund is for unforeseen expenditures, not for categorizing revenue vs. capital spend.
What is the correct definition of a contingent expenditure?
A)
Expenditure incurred on construction works due to calamities
B)
Expenditure on pay, allowances, and pensions of Government servants
C)
Expenditure of an incidental and miscellaneous character, including those required for the day-to-day running of an office
D)
Expenditure on projects financed by external agencies
In government accounting and financial rules (such as the General Financial Rules), 'Contingent Expenditure' refers to expenses that are not for salaries or capital assets, but are necessary for the operational functioning of a department.
Step-by-step analysis of options:
- Option (a) refers to disaster relief or emergency capital expenditure, not general contingencies.
- Option (b) describes 'Establishment Expenditure' (Pay, Allowances, and Pensions), which is distinct from contingent expenditure.
- Option (c) accurately defines contingent expenditure as incidental, miscellaneous, and day-to-day operational costs (e.g., stationery, electricity, postage, and office maintenance).
- Option (d) refers to 'Externally Aided Projects' or Grant-in-Aid expenditures.
Therefore, option (c) is the correct technical definition used in public finance and departmental accounting.
Under the General Financial Rules, 2017, upto what value of goods can be procured without inviting quotations?
A)
Rs. 15,000
B)
Rs. 25,000
C)
Rs. 30,000
D)
Rs. 35,000
According to Rule 154 of the General Financial Rules (GFR) 2017, the procurement of goods up to a value of Rs. 25,000 on each occasion can be made without inviting quotations. The rule specifies that the purchase should be made from a local market or a reputable supplier, and a certificate should be recorded stating that the goods are procured at a reasonable price. For purchases above Rs. 25,000 and up to Rs. 2.5 lakh, a Local Purchase Committee (LPC) is typically required to survey the market and certify the reasonableness of the rates.
Who will maintain a liability register for affecting proper control over expenditure?
A)
The Head of Office
B)
The Treasury Officer
C)
The Administrative Officer
D)
The Procurement Officer
In government accounting and expenditure control frameworks (such as the General Financial Rules - GFR), the Head of Office (HOO) is the primary authority responsible for the financial management of their specific office. To ensure that expenditure does not exceed the sanctioned budget and to track commitments that have been made but not yet paid, the Head of Office is required to maintain a 'Liability Register'. This register tracks all contractual obligations and pending bills, preventing the over-commitment of funds and ensuring that sufficient budget is available to meet future liabilities.
Why other options are incorrect:
- The Treasury Officer (b) is responsible for the disbursement of funds and verifying the legality of claims, not for maintaining the internal liability registers of individual offices.
- The Administrative Officer (c) may assist in the process, but the statutory responsibility for expenditure control and the maintenance of the register rests with the Head of Office.
- The Procurement Officer (d) manages the acquisition of goods and services, but the overall financial control and liability tracking for the office is a function of the Head of Office.
The two methods of disposal for surplus, obsolete or unserviceable goods are
A)
Disposal and Write-off
B)
Auction and public tender
C)
Restricted tender and open tender
D)
Donation to NGOs and handover to Audit
In government accounting and asset management (specifically under General Financial Rules - GFR), when goods are declared surplus, obsolete, or unserviceable, the primary objective is to realize the maximum possible value for the state while ensuring transparency.
1. **Auction**: This is the most common method for disposing of scrap or unserviceable items, where the item is sold to the highest bidder in a transparent, public setting.
2. **Public Tender**: For larger lots of surplus goods or specialized equipment, a public tender is invited to ensure competitive bidding and fair market valuation.
Why other options are incorrect:
- Option (a): 'Write-off' is an accounting process to remove an asset from the books, not a method of physical disposal/sale.
- Option (c): 'Restricted tender' limits competition and is generally avoided for disposal unless specific security or technical reasons exist; 'Open tender' is correct, but the pair is less comprehensive than auction/tender.
- Option (d): Donation is an exceptional case and not a standard primary method of disposal for all unserviceable goods, and 'handover to Audit' is logically incorrect as Audit verifies the process but does not take possession of the assets.
What is an appropriation?
A)
The process of collecting government revenue through taxes
B)
The assignment of funds included in a budget grant to specific heads or units of expenditure.
C)
The transfer of funds from one department to another before sanction
D)
The final audit of expenditure after the close of the financial year
In government accounting and budgeting, 'Appropriation' refers to the legal authorization to spend a specific amount of money for a specific purpose. Once the legislature passes the Appropriation Act (which authorizes the withdrawal of funds from the Consolidated Fund), the executive/administrative authority distributes these total grants into specific 'heads of account' or units of expenditure to ensure that funds are spent only for the intended purposes.
Why other options are incorrect:
- Option (a) describes 'Revenue Collection' or 'Taxation', not appropriation.
- Option (c) describes 'Re-appropriation' (the transfer of funds from one unit of appropriation to another), which is a separate process that occurs after the initial appropriation.
- Option (d) describes 'Post-audit' or 'Financial Audit', which happens after the expenditure has already occurred.
Where are the residuary financial powers that are not delegated vested in?
A)
The Head of Administrative Department
B)
Finance Department
C)
Accountant General
D)
Audit Officer
Under the Delegation of Financial Power Rules (DFPR), financial powers are delegated from the central authority to various administrative heads and officers to ensure efficiency in governance. However, the principle of delegation implies that the original authority remains with the source. In the context of state financial management, the Finance Department acts as the custodian of the public purse. Any financial power that has not been specifically delegated to a Head of Department (HoD) or another authority (residuary powers) remains vested in the Finance Department.
- Option (a) is incorrect because the Head of Administrative Department only possesses powers specifically delegated to them.
- Option (c) is incorrect because the Accountant General is an auditing and accounting authority (under the CAG), not an executive authority for spending powers.
- Option (d) is incorrect because an Audit Officer's role is to verify expenditures, not to hold financial sanctioning powers.
Who can sanction the abolition of a post?
A)
The Head of Office
B)
The Accountant General
C)
The authority competent to create the post
D)
The senior-most officer of the department
In personnel administration and government service rules (such as the Fundamental Rules and Supplementary Rules), the principle of 'parity of power' applies to the creation and abolition of posts. The authority that possesses the delegated financial and administrative power to create a post is generally the same authority empowered to abolish it. This ensures that the organizational structure is managed by the designated competent authority (often the Ministry of Finance or the Department of Personnel/Administrative Reforms, depending on the level of the post).
Why other options are incorrect:
- a. The Head of Office: They manage the office and its staff but do not have the power to alter the sanctioned strength of the establishment.
- b. The Accountant General: The AG is an auditing and accounting authority; they record the abolition of a post for payroll and audit purposes but cannot sanction the abolition itself.
- d. The senior-most officer of the department: Seniority does not automatically grant the legal authority to abolish a sanctioned post; such power is tied to a specific 'competent authority' designation.
Ex-post facto sanction can be obtained for making payments when:
A)
Payments are made for court orders when the Supreme Court has passed final orders
B)
The court orders immediate implementation by making payment for relief
C)
Verbal approval of the Competent Authority has been obtained for implementation of a court order
D)
Funds are already available for utilisation
Under the Delegation of Financial Power Rules (DFPR) and General Financial Rules (GFR), the general principle is that no expenditure should be incurred without the prior sanction of the Competent Authority. However, 'Ex-post facto sanction' (sanction obtained after the expenditure has been incurred) is an exception. This is typically permitted in emergency situations or when there is a legal compulsion. Specifically, when a court of law orders the 'immediate implementation' of a payment for relief, the government may make the payment to avoid contempt of court and subsequently seek ex-post facto sanction from the competent authority to regularize the expenditure.
Option (a) is incorrect because if a final order is passed without a mandate for 'immediate' payment, there is usually sufficient time to obtain prior sanction.
Option (c) is incorrect because verbal approval is generally not a valid legal basis for bypassing formal financial sanctions in government accounting.
Option (d) is incorrect because the availability of funds is a prerequisite for payment, but it does not authorize the bypassing of the sanctioning process.
When does a sanction for a recurring expenditure become operative?
A)
As soon as the order is approved
B)
From the date of its issue
C)
After the order is received by the Treasury Officer
D)
As soon as LOC is issued
In the context of Delegation of Financial Power Rules (DFPR) and general government financial regulations, a sanction for expenditure is the formal approval granted by a competent authority to incur a specific expense. For recurring expenditures (expenses that occur at regular intervals, such as salaries or monthly utility bills), the sanction becomes operative and legally binding from the date the order is officially issued.
- Option (a) is incorrect because approval is an internal process; the sanction only becomes operative once it is formally issued as an order.
- Option (c) is incorrect because while the Treasury Officer needs the order to release funds, the legal validity of the sanction begins at the date of issue.
- Option (d) is incorrect because the Letter of Credit (LOC) is a mechanism for fund allocation/drawal, not the operative date of the sanction itself.
Can powers under the Delegation of Financial Powers Rules be delegated to non- gazetted officers?
A)
Yes
B)
No
C)
Yes, but with the approval of the Government
Under the Delegation of Financial Powers Rules (DFPR), financial powers are delegated to specific authorities based on their rank, designation, and official status. A fundamental principle of financial administration in government rules is that financial accountability and the power to sanction expenditure are vested in Gazetted Officers. Non-gazetted officers do not possess the legal status or the administrative authority to exercise delegated financial powers; they may process files or initiate proposals, but the actual 'power' to sanction or delegate further must reside with a Gazetted Officer. Therefore, powers under DFPR cannot be delegated to non-gazetted officers.
What is the period for a financial year in India?
A)
1st April to 31st March
B)
1st April to the last working day of March
C)
The first working day of April to the last working day of March
D)
The forenoon of 31st March to the midnight of the 31st March of the next year
In India, the financial year (also known as the fiscal year) is the period used for calculating annual financial statements, government budgeting, and tax filings. According to the Government of India's accounting standards and the Income Tax Act, the financial year begins on the 1st of April of one year and ends on the 31st of March of the following year.
Analysis of options:
- Option (a) is correct as it defines the standard calendar dates for the financial cycle.
- Option (b) and (c) are incorrect because the financial year is defined by calendar dates, not 'working days'.
- Option (d) is incorrect as it describes a specific time window that does not align with the standard definition of a full year.
What is the cardinal principle governing the assessment of responsibility of an officer regarding responsibility for losses to government?
A)
That losses are unavoidable and may be pardoned if the officer acted quickly.
B)
That responsibility arises only when the loss is reported by Audit.
C)
That every Government servant must exercise the same vigilance, care, and prudence in handling public funds as a person of ordinary prudence would exercise in handling their own money.
D)
That responsibility is fixed upon the officer who directly handles cash
The cardinal principle for assessing the responsibility of a government officer regarding losses to the government is based on the 'Standard of Ordinary Prudence.' According to the General Financial Rules (GFR) and established government accounting principles, a government servant is expected to manage public money with the same level of care and diligence that a reasonable person would apply to their own personal finances.
- Option (a) is incorrect because losses are not automatically 'unavoidable' or 'pardoned' simply because an officer acted quickly; responsibility is based on negligence or failure of duty.
- Option (b) is incorrect because responsibility exists from the moment the loss occurs due to negligence, regardless of whether it was discovered by an internal check or an external Audit.
- Option (d) is incorrect because responsibility is not limited solely to the person handling cash; it can extend to supervising officers who failed to implement proper controls or oversight.
Who is a subordinate authority as per DFPR?
A)
Any officer working under the Governor/President with delegated powers
B)
An officer who exercises statutory powers
C)
The head of a subordinate office
D)
An officer working under a Controlling Officer in the same office
Under the Delegation of Financial Power Rules (DFPR), the structure of financial authority is divided between the 'Competent Authority' and 'Subordinate Authorities'. A Subordinate Authority is generally defined as any officer to whom financial powers have been delegated by the Governor (for State government) or the President (for Central government), or by a higher authority acting under such delegation.
- Option (a) is correct because it accurately describes the nature of delegated financial authority within the DFPR framework.
- Option (b) is incorrect because exercising statutory powers refers to legal/legislative authority, which is distinct from the administrative delegation of financial powers.
- Option (c) is incorrect because being the 'head of a subordinate office' is a designation of office hierarchy, not necessarily the definition of a 'subordinate authority' in the context of financial delegation rules.
- Option (d) is incorrect because while they may be subordinate in rank, the term 'Subordinate Authority' in DFPR specifically refers to the delegation of financial powers rather than simple office reporting lines.
One condition that has to be met by a subordinate authority for a sanction of expenditure is
A)
that the expenditure has been approved by the Finance Department in writing.
B)
that the expenditure is included in the Annual Report of the Department.
C)
that adequate budget provision exists under the relevant head of account.
D)
that the sanction is sent to the Treasury Officer before issue.
According to the Delegation of Financial Power Rules (DFPR), any authority (whether superior or subordinate) exercising the power to sanction expenditure must ensure that the expenditure is within the sanctioned budget. The fundamental principle of financial propriety and budgetary control requires that no sanction for expenditure be issued unless there is an adequate budget provision available under the specific head of account to which the expenditure is to be charged.
Analysis of other options:
- Option (a) is incorrect because subordinate authorities are delegated specific powers to sanction expenditure without needing written approval from the Finance Department for every single transaction, provided it falls within their delegated limit.
- Option (b) is incorrect because the Annual Report is a retrospective document summarizing activities; it is not a prerequisite for individual expenditure sanctions.
- Option (d) is incorrect because the sanction is issued first, and then the bill/voucher is presented to the Treasury Officer for payment; the sanction itself is not 'sent' to the Treasury for approval before it is issued by the competent authority.
Can funds provided for charged expenditure be used to meet votable expenditure under DFPR?
A)
Yes
B)
No
C)
Yes, but only after re-appropriation
D)
Approval of Finance Department is required
Under the Delegation of Financial Power Rules (DFPR) and general government accounting principles (based on the Constitution and General Financial Rules), expenditures are categorized into 'Charged' and 'Votable'.
1. **Charged Expenditure**: These are expenditures that are not submitted to the vote of the Legislature (e.g., salaries of the Speaker, High Court judges, etc.). They are mandatory payments.
2. **Votable Expenditure**: These are expenditures that are voted upon by the Legislature.
According to the rules of financial propriety and budgetary control, funds allocated for 'Charged' expenditure are specifically earmarked for those non-votable purposes. Using funds meant for Charged expenditure to meet Votable expenditure is strictly prohibited because it would bypass the legislative authority of the House to vote on and control the spending of public money. Re-appropriation is generally permitted within the same category (Votable to Votable), but not from Charged to Votable.
A government security is:
A)
A certificate issued by a nationalised bank guaranteeing repayment of a fixed deposit.
B)
A tradable debt instrument issued by the Government acknowledging its debt obligation.
C)
A security pass issued to officials for entry into government buildings.
D)
A document issued by the Treasury for withdrawal of money.
Step-by-step reasoning:
1. **Definition of Government Security (G-Sec):** A government security is a financial instrument issued by the central or state government to raise funds from the public or institutional investors. It acts as a formal acknowledgment of a debt obligation, where the government promises to pay a fixed amount of interest (coupon) and repay the principal amount upon maturity.
2. **Tradability:** G-Secs are 'tradable,' meaning they can be bought and sold in the secondary market (such as the NDS-OM platform in India), which distinguishes them from simple fixed deposits.
3. **Evaluating Option (a):** This describes a bank guarantee or a fixed deposit receipt. Nationalised banks are intermediaries or buyers of G-Secs, but they do not issue 'government securities' on behalf of the state; the government issues them.
4. **Evaluating Option (c):** This describes a physical security badge or access permit, which is a literal interpretation of the word 'security' but unrelated to financial instruments.
5. **Evaluating Option (d):** This describes a treasury challan or a withdrawal slip, which is an administrative document for fund movement, not a debt instrument.
Therefore, option (b) is the only technically accurate definition of a government security in the context of public finance.
A rate contract is
A)
A contract where payment is made only after completion of the entire work.
B)
A contract in which the supplier agrees to deliver goods as per prevailing market rates.
C)
A standing arrangement with approved suppliers fixing the rates for items for a specified period without committing the quantity to be purchased.
D)
A contract that allows suppliers to negotiate rates after delivery.
A Rate Contract (also known as a Rate Agreement) is a procurement tool used by government departments and organizations to streamline the purchase of frequently required items.
1. **Why Option 'c' is correct**: The defining characteristic of a rate contract is that it fixes the unit price (rates) for a specific period. Crucially, it does not obligate the buyer to purchase a specific quantity; instead, the buyer places 'call-off' orders as and when the need arises during the contract period. This ensures price stability and reduces the administrative burden of repeated tendering.
2. **Why Option 'a' is incorrect**: This describes a 'lump-sum' or 'completion-based' payment contract, which is common in construction or project-based work, not a rate contract.
3. **Why Option 'b' is incorrect**: A rate contract is designed specifically to avoid 'prevailing market rates' (which fluctuate). It fixes the rate to protect the buyer from price hikes.
4. **Why Option 'd' is incorrect**: Rates are negotiated and fixed *before* the contract is signed, not after delivery. Post-delivery negotiation would defeat the purpose of a standardized procurement agreement.
What is a personal deposit account?
A)
A savings account opened by a Government servant in a nationalised bank
B)
A device in which public money is credited and from which payments are made for specific purposes
C)
A fixed deposit held by the Government for contingency needs
D)
A personal ledger account maintained by Audit for each DDO.
In the context of Treasury Rules and Government Accounting, a Personal Deposit (PD) Account is a mechanism used by the government to allow specific funds to be credited to the treasury for a particular purpose. These funds are then drawn from the account for that specific purpose, subject to the rules and sanctions of the government.
Why other options are incorrect:
- Option (a) describes a private savings account, which is unrelated to government treasury operations.
- Option (c) describes a Fixed Deposit, which is an investment vehicle, whereas a PD account is a current-style account for operational expenditure.
- Option (d) describes a Personal Ledger Account (PLA), which is a different accounting tool used primarily for the tracking of advances and expenditures by a Drawing and Disbursing Officer (DDO), whereas a PD account is specifically for funds credited for a designated purpose.
A YMA branch was given funds for the purchase of an ambulance out of Grants-in- Aid provided by your department. Choose the correct action for protecting public interest.
A)
The YMA must promise to never sell the asset
B)
The YMA must be made to notify the government after the ambulance is no longer in use
C)
The YMA must abide by the condition that they will not sell the ambulance without the prior approval of the department
D)
They must use the ambulance only for ST/SC community
In the administration of Grants-in-Aid, when public funds are used to acquire a capital asset (like an ambulance) for a non-governmental organization or a voluntary agency, the government must ensure that the asset continues to serve the public purpose for which the grant was intended.
1. **Asset Control**: To protect public interest and prevent the misappropriation of government funds, a standard condition of such grants is that the asset cannot be sold, leased, mortgaged, or transferred without the explicit prior approval of the sanctioning authority (the Department).
2. **Why 'a' is incorrect**: A permanent ban on selling is impractical. Assets depreciate and eventually become obsolete; the government needs a mechanism to approve disposal or replacement.
3. **Why 'b' is incorrect**: Simply notifying the government after the asset is no longer in use is a post-facto action and does not prevent the unauthorized sale or misuse of the asset while it is still functional.
4. **Why 'd' is incorrect**: While grants may have target beneficiaries, restricting the use of an emergency vehicle (ambulance) solely to specific communities may violate general public interest and administrative guidelines unless specifically mandated by the grant's primary objective, whereas the restriction on sale is a universal financial propriety rule for all Grants-in-Aid.
When is price variation clause allowed in contract management?
A)
In contracts where the market value of the goods fluctuates
B)
Only in short-term contracts of less than 6 months
C)
In long-term contracts where significant cost escalation risks exist
D)
Only when the contractor demands it at the time of tendering
A Price Variation Clause (PVC) is a risk-management tool used in contract management to protect both the buyer and the seller from unpredictable fluctuations in costs (such as raw materials, labor, or fuel) over the duration of a contract.
1. Why Option 'c' is correct: PVCs are primarily utilized in long-term contracts because the risk of significant cost escalation increases over time. In short-term contracts, price volatility is usually negligible or can be absorbed into the fixed price. By including a PVC, the parties mathematically allocate the risk of inflation or market volatility, ensuring the contract remains viable for the contractor and fair for the client.
2. Why Option 'a' is incorrect: While market fluctuations trigger the clause, the clause is not 'allowed' simply because goods fluctuate; it is specifically implemented in contracts where those fluctuations pose a significant financial risk over a prolonged period.
3. Why Option 'b' is incorrect: Short-term contracts (less than 6 months) typically use fixed-price agreements because the window for significant price variation is too small to justify the administrative complexity of a PVC.
4. Why Option 'd' is incorrect: The inclusion of a PVC is a matter of contract strategy and risk allocation decided during the drafting phase (often by the procuring entity), not merely a result of a contractor's demand at the time of tendering.
Which one of the conditions is not a requirement for necessitating a reservation for ST/SC/OBC for agencies receiving grants-in-aid?
A)
The body employs more than twenty persons on a regular basis
B)
At least half of its recurring expenditure is funded by the government
C)
The body is a registered society or a co-operative institution
D)
The agency is a non-profit organisation
In the context of government grants-in-aid and the application of reservation policies (ST/SC/OBC), the government typically mandates that agencies receiving substantial public funding adhere to state reservation norms to ensure social equity. The standard criteria for necessitating these reservations usually include: 1) The size of the workforce (e.g., employing more than 20 persons), 2) The level of financial dependence on the government (e.g., at least 50% of recurring expenditure funded by the government), and 3) The legal status of the entity (e.g., being a registered society or co-operative). While most agencies receiving such grants are indeed non-profit organisations, the 'non-profit' status itself is a general characteristic of the agency, not a specific 'trigger condition' or 'requirement' that necessitates the implementation of reservation quotas. The reservation is triggered by the scale of employment and the degree of government funding, regardless of whether the entity is a non-profit or another form of registered body.