The Constitution of India provides for the following three
kinds of funds for the Central government:
1.
Consolidated Fund of India (Article 266)
2.
Public Account of India (Article 266)
3.
Contingency Fund of India (Article 267)
Consolidated Fund of
India
It is a fund to which all receipts are credited and all
payments are debited. In other words, (a) all revenues received by the
Government of India; (b) all loans raised by the Government by the issue of
treasury bills, loans or ways and means of advances; and (c) all money received
by the government in repayment of loans forms the Consolidated Fund of India.
All the legally authorized payments on behalf of the Government of India are made
from this fund.
·
No money out of this fund can be appropriated
(issued or drawn) except through grants made by parliament.
Public Account of
India
·
All other public money (other than those which
are credited to the Consolidated Fund of India) received by or on behalf of the
Government of India shall be credited to the Public Account of India.
·
This includes provident fund deposits, judicial
deposits, savings bank deposits, departmental deposits, remittances and so on.
·
No need of
Parliament’s approval
This account is operated by executive
action, that is, the payments from this account can be made without
parliamentary appropriation. Such payments are mostly in the nature of banking
transactions.
·
Bank savings account of the
departments/ministries (for day to day transactions)
·
National Investment fund – NIF (Money earned
from disinvestment)
·
National Calamity & contingency fund (NCCF)
(Under Home ministry) → Merged with NDRF
·
National small savings fund, defense fund,
provident fund, Postal insurance etc.
·
All Cess & Specific purpose surcharges
·
Government schemes Fund (E.g. MNREGA)
Contingency Fund of
India
The Constitution authorized the Parliament to establish a
‘Contingency Fund of India’, into which amounts determined by law are paid from
time to time. Accordingly, the Parliament enacted the contingency fund of India
Act in 1950. This fund is placed at the disposal of the president, and he can
make advances out of it to meet unforeseen expenditure pending its authorization
by the Parliament. The fund is held by the finance secretary on behalf of the
president.
·
Like the public account of India, it is also
operated by executive action.
·
Created in 1950, with a limit of merely 50 cr.,
raised to 500 cr. in 2005, at the disposal of the President to meet unforeseen
expenditures – Operated by Finance secretary
·
Contingency fund is used by the President where
parliament’s approval cannot be obtained owing to time factor
·
However, sanction of parliament is necessary to
replenish this fund from consolidated fund of India
·
States have their own consolidated &
contingency funds
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