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
- Definition: The Consolidated Fund of India is the main fund of the government, where all revenues received by the Government of India, all loans raised by the government, and all repayments of loans are credited.
- Usage: All legally authorized payments on behalf of the government are debited from this fund.
- Parliamentary Approval: No money can be withdrawn from this fund except through a parliamentary law, such as the Appropriation Act.
Public Account of India
- Definition: The Public Account of India includes all other public money (not part of the Consolidated Fund) received by or on behalf of the government, such as provident fund deposits, judicial deposits, savings bank deposits, and other forms of deposits and remittances.
- Usage: This account operates through executive action, meaning payments from it can be made without parliamentary appropriation.
- Nature: Transactions in this account are mostly in the form of banking activities, rather than government expenditures.
Contingency Fund of India
- Establishment: The Parliament established the Contingency Fund of India in 1950 under the Contingency Fund of India Act.
- Purpose: This fund is designed to meet unforeseen expenditures in emergency situations, pending parliamentary authorization.
- Management: The fund is placed at the disposal of the President of India and is held by the finance secretary on behalf of the President.
- Operations: Like the Public Account, the Contingency Fund is operated through executive action, with advances made from the fund to meet emergency expenses.
These three funds ensure the proper management of the government's finances, balancing the need for parliamentary control over spending with the flexibility to respond to unforeseen circumstances.
