Funds of Government of India

Funds of Government of India

The accounts of Government are kept in three parts

1. Consolidated Funds of India
2. Contingency Funds of India
3. Public Account

Consolidated Fund of India This is the chief account of the Government of India. The inflow to this fund is by way of taxes like Income Tax, Central Excise, Customs and also non-tax revenues which arise to the government in connection with the conduct of its business. Loans raised by issue of treasury bills are also received in this fund. The government meets all its expenditure including loan repayments from this fund. No amount can be withdrawn from the fund without the authorisation from the Parliament. This fund is formed under the provision of Aricle 266 (1) of the Indian Constitution. Each state may have its own consolidated fund of the state with similar provisions.

Public Account The Public Account is constituted under Article 266 (2) of the Constitution. All other public moneys (other than those covered under Consolidated Fund of India) received by or on behalf of the Government of India are credited to the public account of India.

The transactions under Debt, Deposits and Advances in this part are those in respect of which Government incurs a liability to repay the money received or has a claim to recover the amounts paid. The receipts under Public Account do not constitute normal receipts of Government. Parliamentary authorization for payments from the Public Account is therefore not required. Each state may have its own Public Fund on similar lines.

Contingency Fund of India The Contingency Fund of India is set up in the nature of an imprest account under Article 267 (1) of the Constitution of India. The corpus of this fund is Rs. 500 crores. Advances from the fund are made for the purposes of meeting unforeseen expenditure by the President of India. The amount is resumed to the Fund to the full extent as soon as Parliament authorizes additional expenditure. The Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs holds the fund on behalf of the President of India. Each state may have its own Contingency Fund on similar lines.

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