Funds of India

The Funds of India is made up of three funds - the Consolidated Fund , the Contingency Fund and the Public Account. All financial transactions in the Indian administration are carried out through these channels. The Consolidated Funds and the Public Accounts of the Central Government and the State Governments are dealt with in Article 266 of the Constitution. Article 267 of the Constitution deals with Contingency Funds.

Consolidated Fund: The Consolidated Fund is the sum of the revenues accruing to the Government of India. Mainly, taxes levied by the Central Government such as income tax , excise duty , customs duty , revenue etc. are added to the Consolidated Fund. In addition, non-tax revenues such as transport , postal , railway etc. are also added to the Consolidated Fund. The loans received by the Government as domestic and foreign loans , the loans raised by the Government from within the country through public notifications and treasury bills are also added to this. The funds are spent with the approval of the Parliament.

Contingency Fund: The government uses funds from the Contingency Fund in times of emergency when funds are needed. Example: Natural disasters. The Contingency Fund is kept within the limits of the President's own budget. When there is a delay in the approval of new policy programs by Parliament, funds are used from the Contingency Fund.

Public Account: All public money coming to the government except the amounts credited to the Consolidated Fund through the Public Account is accounted for. Deposits coming into EMH, SD, GPF, PPF and money collected by the government through the sale of savings certificates reach this account. The government only plays the role of a banker/trustee in this process of money inflow and expenditure.