Understanding Amendments to General Financial Rules: Transfer of Land
Introduction
The General Financial Rules (GFR) of 2017 have undergone amendments concerning the transfer of land. These changes, stemming from an Office Memorandum issued by the Department of Expenditure under the Ministry of Finance, aim to clarify and streamline the procedures for the transfer and alienation of Central Government land. This article delves into the specifics of these amendments, highlighting the revised rules and their implications.
Key Amendment to Rule 310
Central Government Land Transfer: A Shift in Policy
A significant amendment has been made to Rule 310 of the General Financial Rules, 2017. Previously, the rule detailed various scenarios for land transfers, including those between Union Territories and Central Government Departments, and between different government departments, all generally on a ‘no profit no loss’ basis. The amended Rule 310 now directs that all matters concerning the transfer or alienation of Central Government land will be governed by the comprehensive instructions laid out in Appendix 7A and Appendix 7B of the GFRs. This consolidation aims to provide a more unified and accessible framework for such transactions.
Previous Framework for Land Transfers
Detailed Provisions for Land and Building Transfers
Prior to this amendment, Rule 310 provided specific guidelines for different types of land and building transfers. Sub-rule (1) stipulated that transfers between a Union Territory and a Central Government Department, or vice versa, should occur on a ‘no profit no loss’ basis. Similarly, sub-rule (2) applied this principle to transfers between different government departments. The interpretation of ‘no profit no loss’ was further clarified to include mutually agreeable terms, exchange of equal value land, or monetary compensation based on the land’s cost of acquisition.
Valuation and Public Sector Undertakings
Sub-rule (3) addressed the transfer of buildings and superstructures, stating they would be treated similarly to land transfers, valued at present-day cost minus depreciation, with valuations to be obtained from the Central Public Works Department. For Public Sector Undertakings (PSUs), sub-rule (4) specified that land allotment and cost recovery would be based on ‘market value’ as defined in Appendix 7. Finally, sub-rule (5) indicated that transfers of land and buildings between the Union and State Governments were to be regulated by constitutional provisions (Articles 294, 295, 298, and 299) and subsidiary instructions detailed in Appendix 7.
The New Governing Framework: Appendices 7A & 7B
Consolidated Guidelines for Land Alienation
The amendment effectively consolidates the procedural framework for handling Central Government land by referring readers to Appendix 7A and 7B. Appendix 7A introduces new provisions specifically for the guidelines of transfer and alienation of Central Government land, providing a focused set of instructions. Appendix 7B, meanwhile, retains the existing constitutional provisions and subsidiary instructions pertinent to land and building transfers between the Union and State Governments, ensuring that these foundational legal aspects are still accessible.
Constitutional Basis for Union-State Land Transactions
Appendix 7B continues to reference key constitutional articles, including 294 and 295, which deal with the succession of property, assets, rights, liabilities, and obligations between the Union and the States. It outlines the historical context of these provisions, tracing back to the pre-Constitution era and the vesting of assets. This section clarifies how property was inherited by the Union and corresponding States and reiterates that such assets, including land and buildings, vest at the disposal of the respective governments.
Principles for Union-State Land Transfers
The principles governing land transfers between the Union and State Governments, as previously outlined, remain largely consistent within Appendix 7B. These principles cover scenarios such as land acquisition on behalf of the Union Government, the transfer of land occupied by State Governments to the Union, and the determination of payment based on market value, including capitalized land revenue where applicable.
Surrender of Surplus Land
A notable aspect retained relates to the procedure when land becomes surplus to the requirements of the Union Government. The State Government in which the land is situated is given the option to assume possession. This option is subject to conditions including the Union Government’s discretion on retention, a time limit for the State Government to exercise its option, valuation at market price, and ensuring the land’s value is not diminished by partial surrender. If the State Government does not opt to take possession, the Union Government is free to dispose of the land to a third party, with consultation with the State Government on ground rent or assessment.
Dispute Resolution and Market Value Definition
The existing mechanism for resolving disputes over titles between the Union and State Governments, which involves the Supreme Court, is also maintained. Furthermore, the definition of ‘market value’ for land transactions, previously elaborated upon, has been omitted from this specific section of the amended rules, likely due to its integration or clarification within the new Appendix 7A or other related guidelines.
Important Information
Key Changes and Governing Principles
| Aspect | Previous Rule | Amended Rule / Current Framework |
|---|---|---|
| Primary Governance | Rule 310 detailed specific conditions for various land transfer scenarios. | Transfer/alienation of Central Government land governed by instructions in Appendix 7A & 7B of GFRs. |
| Union Territory to Dept. | On ‘no profit no loss’ basis (Rule 310(1)). | Governed by Appendix 7A & 7B. |
| Between Govt. Departments | On ‘no profit no loss’ basis (Rule 310(2)). | Governed by Appendix 7A & 7B. |
| Buildings/Superstructures | Treated similar to land; valued at present-day cost minus depreciation, using CPWD valuation (Rule 310(3)). | Governed by Appendix 7A & 7B. |
| PSU Land Allotment | At ‘market value’ (Rule 310(4)). | Governed by Appendix 7A & 7B. |
| Union & State Government | Regulated by Articles 294, 295, 298, 299 of Constitution and Appendix 7 (Rule 310(5)). | Governed by Appendix 7B (constitutional provisions) and Appendix 7A (specific guidelines). |
| Solatium in Union-State Transfer | 15% solatium under Land Acquisition Act would not apply. | Solatium payable under extant provisions of Land Acquisition Act will not apply. |
| Market Value Definition | Defined in detail within Appendix 7. | Omitted from this section; likely integrated elsewhere within the GFR framework or related appendices. |
Conclusion
The amendment to Rule 310 of the General Financial Rules, 2017, signifies a move towards consolidating and centralizing the guidelines for the transfer and alienation of Central Government land. By referencing Appendices 7A and 7B, the revised rule aims to offer a more coherent and accessible procedural framework for all stakeholders involved in such property transactions.
Frequently Asked Questions
What is the main change in Rule 310 of the General Financial Rules, 2017?
The main change is that the transfer and alienation of Central Government land will now be governed by the instructions provided in Appendix 7A and Appendix 7B of the GFRs, consolidating previous detailed provisions.
What did the ‘no profit no loss’ basis mean under the old rules?
It meant that transfers were generally intended to occur without financial gain or loss for either party, potentially involving mutually agreeable terms, exchange of equivalent value, or payment of acquisition costs.
How are buildings and superstructures treated in land transfers under the old rules?
They were valued at their present-day cost minus depreciation, with valuations to be provided by the Central Public Works Department.
What is the primary purpose of Appendix 7A and Appendix 7B?
Appendix 7A provides new guidelines specifically for the transfer and alienation of Central Government land, while Appendix 7B retains existing constitutional provisions and subsidiary instructions related to Union-State land and building transfers.
What constitutional articles are relevant to land transfers between the Union and State Governments?
Articles 294, 295, 298, and 299 of the Constitution are relevant, dealing with the succession of property and the framework for such transactions.
Does the solatium under the Land Acquisition Act apply to transfers between Union and State Governments?
No, the amended rules clarify that solatium payable under the extant provisions of the Land Acquisition Act will not apply to such transfers.
What happens to land that becomes surplus to the Union Government’s requirements?
The State Government where the land is situated is given the option to take possession under specific conditions, including valuation and time limits.
Can the Union Government sell surplus land to a third party?
Yes, if the State Government does not exercise its option to take possession, the Union Government is free to dispose of the land to a third party, after consulting the State Government on certain conditions.
How are disputes over titles between the Union and State Governments resolved?
Disputes concerning titles between the Union Government and a State Government are to be determined by the Supreme Court.
Where can one find the detailed instructions on the transfer and alienation of Central Government land?
These detailed instructions are now consolidated within Appendix 7A and Appendix 7B of the General Financial Rules.
