Government of India
Ministry of Finance
Department of Expenditure
Chief Adviser Cost
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  Ministry of Finance
Department of Expenditure
Office of Chief Adviser Cost
  Extracts of Annual Report of Ministry of Finance for the year 2016-17 in respect of the Office of Chief Adviser Cost  
1. The Office of the Chief Adviser Cost (CAC) is one of the divisions functioning in the Department of Expenditure, Ministry of Finance. This office advises the Ministries and Government Undertakings on Cost accounts matters and to undertake cost investigation work on their behalf. It is a professional agency staffed by Cost/Chartered Accountants.
2. The Office of Chief Adviser Cost is dealing with matters relating to costing and pricing, studies for determining fair prices, studies on user charges, cost-benefit analysis of project, studies on cost reduction, cost efficiency, appraisal of capital intensive projects, profitability analysis and application of modern management tools evolving cost and commercial financial accounting for Ministries/Department of Government of India.
3. It was set up as an independent agency of the Central Government to verify the cost of production and to determine the fair selling price for Government Departments including Defence purchases in respect of the cases referred to. The role of the office was further enlarged and extended to fixing prices for a number of products covered under the Essential Commodities Act, such as Petroleum, Steel, Coal, Cement, etc. under the Administered Price Mechanism (APM). Since cost/pricing work in the Ministries increased significantly, various other Ministries/Departments started to have their in house expertise by seeking posting of service officers for work requiring expertise in cost/commercial accounts matters. In the post liberalization era, the office is receiving and conducting studies in synchronization with liberalization policy of the Government in addition to the traditional areas of cost-price studies.
4. The Chief Adviser Cost's Office is also cadre controlling office for the India Cost Accounts Service (ICoAS) and looks after training requirements of the officers for the continuous up-gradation of their knowledge and skills, in addition to rendering professional guidance to the ICoAS officers working in different participating organizations.
5. The major areas of professional functions of the office of the Chief Adviser Cost are as under:-

(i) Assisting Central Government Ministries/Departments/Organizations in solving complex Price/Cost related issues, in fixing fair prices for various services/products and rendering advice to various Ministries/Departments in cost matters.
(ii) Examination/Verification of claims between Government Departments/Public Sector undertakings and suppliers arising out of purchase contracts.
(iii) Determining prices of products and services supplied to Government, to enable Government Departments to negotiate the prices with the supplying organizations.
(iv) Conducting studies for determining cost/fair prices and making recommendations for fair prices/rates for products and services and also to determine reasonableness of prices charged, duty structure, etc.
(v) Valuation of assets and liabilities of business taken over and shares of public sector undertakings.
(vi) Functioning as Chairman/Members of Committee constituted by Government/ different Departments related to Cost/financial and pricing matters.
(vii) Conducting cost and performance audit of industrial undertaking.
(viii) Subsidy determination and verification of claims under Market Intervention Schemes (MIS) and Price Support Scheme (PSS) for sharing of losses by State and Central Government.
(ix) Developing Cost Accounting System for departmental undertakings/Autonomous bodies.
(x) Conducting Time and Cost Overruns of major projects.
6. During the period January to November 2016, 52 studies/reports were completed by the Office of Chief Adviser Cost. The studies completed during the year varied widely in nature and may be broadly categorized under the following heads:

(i) System Study
a) Fixation of Common Hourly Rates and Overhead percentages in respect of Government of India Presses at Mysore Temple Street, Kolkata, Minto Road-Delhi, Nilokheri, Aligarh, Koratty-Kerala, Rashtrapati Bhawan, Chandigarh and Nasik for various years.
b) Fixation of Overhead rate in respect of sale price of Hydrogen gas manufactured at Hydrogen Factory, Agra for the year 2011-12 and 2013-14.
(ii) Fair selling price of products/service where Governement/ Public Sector Undertaking is the Producer/Service provider as well as the user
a) Fixation of fair price of DDT 50% supplied by HIL to NVBDCP for the year 2013-14, revision of fair price of DDT 50% for the years 2014-15 and privisional price for the year 2015-16.
b) Fixation of Currency Notes produced by Currency Note Press (CNP) at Nashik to RBI during the year 2011-12 & 2012-13.
c) Fixation of fair price of Notes supplied by BNP, Dewas and suppied to RBI during the year 2011-12 & 2012-13.
d) Fixation of fair price of Opium Procurement for the year 2016-17.
e) Fixation of fair price of Bed Durries supplied by WDO during the year 2010-11.
f) Fixation of fair price of Barrack Blankets supplied by WDO during the year 2010-11.
g) Fixation of fair price of Coins supplied by India Govt. Mints at NOIDA, Kolkata, Hydrabad & Mumbai to RBI during the year 2014-15.
h) Fixation of fair price of rails supplied by SAIL-BSP to Indian Railways during the year 2014-15.
i) Fixation of Fair Selling Price of the year 2015-16 in respect of Tear Gas Gun and Multi Barrel Launcher manufactured by CENWOSTO, BSF, Tekanpur, Gwalior.
j) Vetting of prices of Ayurvedic/Unani Medicines supplied by M/s Indian Medicines Pharmaceutical Corporation Limited (IMPCL) for the period 2014-15.
k) Cost study of weekly Oral Contraceptive Pills (OCPs) "Saheli" manufactured by M/s HLL Life Care Ltd.
(iii) Fixation of service charges for the services rendered by a Govt. Department/ Agency on behalf of the other
a) Vetting of claims under Market Intervention Scheme (MIS) for Procurement of C Grade Apples in Himachal Pradesh for the 2014 season.
(iv) Determination of Subsidy
a) Vetting of claims of NAFED for Price Support Scheme (PSS) for Pulses (Urad) Kharif 2011
b) Vetting of Cost incurred on Socia Economic and Caste Census 2011 project by BEL, ECIL & ITI Ltd.
c) Vetting of Duties and Taxes for procurement of Tablet PC and other Accessories by Ministry of Rural Development from BEL for the period from 2010-11 to 2012-13.
d) Vetting of subsidy claim submitted by Projects and Equipment's Corporation of India Ltd. in respect of sale of pulses.
e) Vetting of subsidy claim submitted by State Trading Corporation of India Ltd. (STC) in respect of sale of pulses.
f) Payment of Subsidy to Northern Railway Catering Unit functionality in Parliament House Complex for the year 2014-15.
(v) User Charges
a) Review of User Charges of Central Board of Film Certification.
b) Fee and user charges in respect of Indian Grain Storage Manaement and Research Institute (IGMRI), Hapur, (U.P).
c) Review of User Charges of Indian Institute of Legal Metrology (IILM), Ranchi.
d) Fee and User Charges in respect of National Institute of Siddha, Chennai.
e) Revision of Storage Charges payable by FCI to CWC for the year 2013-14.
f) Revision of special party rates hosted by LSS/RSS & MPs in Parliament House.
g) Fee and User charges in respect of National Sugar Institute, Kanpur.
(vi) Other studies
a) Valuation of compensation of "Mine Infrastructure" of 52 Coal Blocks.
b) Cost Study of different Programs conducted by NIFM, Faridabad.
7. Major Committees Represented
  Officers of Chief Adviser Cost's Office owing to their expertise in costing/finance/ commercial accounting have also served as Chairman/Members on the following major multi-disciplinary Inter-Ministerial/Expert Committees:-

1. National Pharmaceuticals Pricing Authority, Department of Pharmaceuticals.
2. Board of Governers and the Society of the National Institute of Financial Management (NIFM), Faridabad.
3. Governing Body of Tear Smoke Unit, BSF, Tekanpur.
4. Rate Structure Committee under the Chairmanship of AS&FA, Ministry of Information and Broadcasting to review the DAVP advertisment rates in respect of Print Media,Private FM Radio Stations, Private C&S TV Channels & Social Media.
5. Committee on "Moderization of Costing System in India Post" in Department of Post, Ministry of Communications.
6. Advisory Committee for consideration of techno-economic viability of major/ medium, flood control and multipurpose projects, coordinated by Central Water Commission.
7. Committee to Review and Recommend Non Tax Revenue (User Charges) generated by India Meteorology Department, New Delhi.
8. Price Negotiation Committee for Electronic Voting Machines- Ministry of Law and Justice.
9. EFC meeting to consider Revised Cost Estimates (REC) for setting up of AIIMS, Raebareli under Pradhan Mantri Swasthya Suraksha Yojana (PMSSY).
10. Committee for enhancement in the existing sales price of 18 Monthly Journals brought out by Publication Division.
11. Committee to suggest a more transparent and objective method for working our compensation for India-based officers/staff posted in India Mission/ Posts abroad.
12. Standing Committee for the project "Operation and Maintenance of Ocean Research Vessel (OVR) Sagar Nidhi BTV Sagar Manjusha and Coastal Research Vessel (CRVs) Sagar Purvi Vessels.
13. Standing Committees of Experts under Drugs (Price Control) Order 2013.
14. Standing Committees to examine the reasons of time and cost overrun of various Ministries.
15. Standing Committees for Revision of Cost Estimates (REC) established in various Ministries.
16. Special Committee for Inter-linking of Rivers.
17. Standing Committee for Koteshwar Hydro Electris Project (400 MW) of THDCIL in Uttarakhand.
18. Committee on User Charges of Autonomous Bodies-Implementation of the recommendations of Expenditure Management Commission.
19. PIB in respect of Koteshwar HEP (400MW) in Uttarakhand.
8. Training
a) As per the extant training policy of DoP&T, this office organised Mid-Career Training (Executive Development) Programme of 3 weeks duration from 6 th June to 24th June 2016 in India and abroad involving 15 (fifteen) nominated Middle and Senior Level Indian Cost Accounts Service Officers.
b) A two week Induction Training Program for 10 ICoAS Officers [Assistant Director (Cost) 2014 Batch] was conducted from 19th to 30th Septemeber 2016 at Institute of Secretariat Training & Management (ISTM), New Delhi.
9. e-Governance Activities
a) e-Office software is being implemented across all the Divisions of the Department of Expenditure (DoE) in a phased manner, the Office of Chief Adviser Cost being one of the divisions under DoE is also taking necessary action in this regard. Online e-Office APAR System (SPARROW) in respect of ICoAS officers will be implemented from the assessment year 2016-17. Further, this office has also become part of the e-Office Premium software being implemented in DoE.
b) The existing website of the office of Chief Adviser Cost is also proposed to be revamped based on latest guidelines of GoI including RTI requirements.
10. Right to Information Act, 2005
  Right to Information Act, 2005 is completely implemented. PIO and Appellate Authority are in place under the said act and the information sought by the applicants is provided within the stipulated time period. Recent guidelines including suo motu (Proactive) disclosure under Sec 4(1)(b) of the RTI Act is under implementation.
11. Initiative undertaken for SC/ ST/ OBC/Persons with Disabled
  Recruitment to the entry level of ICoAS i.e. Assistant Director (Cost) is made on the recommendations of UPSC. Government of India policies on reservation for SC/ST/OBC/PWD categories are followed, wherever applicable.