CONSOLIDATED AND CONTINGENCY FUND OF INDIA
In the previous article , we discussed – government budget and budget procedure . In this article we are going to discuss various types of accounts in which the revenue received by government of India are kept .
In case , you missed the previous article , first read previous article by clicking on the link given above , so as to have better understanding .
- All the revenue received by government of India are kept in various accounts . There are broadly 3 types of government account –
1. Consolidated fund of India
2. Contingency fund of India
3. Public account of India
Let us discuss them one by one .
Consolidated fund of India
The Consolidated fund of India is one the account to Government of India and it receives money under this account from various sources , which are as follows –
- Direct and Indirect taxes – All money received by Government of India in the form of direct or Indirect taxes are kept under this account .
- Revenue proceeds of Railways , Post offices , Transport , Profits of government PSUs etc. , are also credited into this account .
- If government of India raises ( takes ) loan from Foreign governments , International institutions like World Bank and IMF etc. , all these money are credited into this account only .
- If government raises money from market by issuing Treasury bills , it also gets credited into Consolidated fund of India only .
- Repayment of External or Internal debt by government of India , Providing loans to state government(s) / Union territories etc. , all these nature of expenditures are also debited to this account only .
Important Note – However , it should be noted here that no amount can be withdrawn from consolidated fund of India without approval of Parliament .
Contingency fund of India
- The contingency fund of India is an imprest account . Term imprest account basically refers to the fixed balance which is maintained under this account . The money under this account can only be used for specific purpose only .
- This account is maintained in order to enable the government to meet unforeseen expenses . The money under this account can be used to provide immediate relief to victims of natural calamities .
- The fund under this account can also be used to implement any new policy decision taken by government of India .This account is kept at the disposal of President of India ( by the secretary to government of India , Ministry of Finance , Department of Economic affairs ) . It means that president on advice of government can allow the government to use the funds under this account in case of any emergency situation .
- However , as soon as parliament meets again , the used amount has to be approved by parliament and the same amount would be debited or deducted from consolidated fund of India and then the amount would have to be credited to contingency fund of India account. Why ?? – As discussed earlier that , it is an imprest account , so a fixed amount of balance has to be maintained .
- Earlier , the corpus of this account was ₹ 500 crore , but the union budget of 2020 – 21 has increased the corpus to ₹ 30,000 crore through the Finance bill .
Public account of India
- All the public money received by the government are credited into Public account of India ( Except those public money which are credited into consolidated fund of India ) .
- One of the important and distinguishing feature of this account is , the receipts into this account and the disbursements out of this account are not subjected to vote by Parliament . So , basically this account gives a free hand to government of India .
- Receipts under this account are mainly from sale of saving certificates , contributions into general provident fund , Public provident fund , security deposits , Earnest money deposits ( a kind of security deposit ) .
- With respect of all such deposits by public , government of India acts as a Banker or Trustee . Government of India refunds all such money received , to the public after the completion of tenure / term / contract .
- Important Note – Constitution of India also mandates every state government to maintain all the 3 accounts namely , consolidated fund , Contingency fund and Public account .
- Regarding Union territory , it is not constitution rather THE GOVERNMENT OF UNION TERRITORIES ACT , 1963 , which mandates it to maintain all these 3 accounts .