GFR Rule No. 106

Описание: 🔸 GFR Rule 106 Explained | Method of Calculation of Interest on Government Projects | Financial Discipline in India

Every government project in India tracks every rupee spent, including the interest on capital outlay.
Rule 106 of the General Financial Rules (GFR) 2017 explains the precise method of calculating interest for government projects.

🔸 What Rule 106 Says:
• Interest is calculated only on the capital outlay directly spent on the project.
• The formula considers the previous year’s total capital outlay plus half of the current year’s outlay.
• The previous year’s investment is charged interest for the full year.
• The current year’s investment is charged interest for half a year, since funds are generally spent at different times during the year.
• The source of funds, whether from current revenue or loans, does not affect the calculation.

🔸 How It Works:
At the end of each financial year, government departments recalculate capital outlay and interest using this method.

This process ensures:
• Accurate and comparable financial records across projects.
• Real insight into the actual cost of capital invested in government initiatives.
• Strong financial discipline and transparency in project accounting.

🔸 In Simple Words:
Rule 106 of GFR 2017 ensures that interest on every government investment is calculated fairly and consistently, creating a transparent and disciplined framework for managing project finances in India.