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  • Category: Government

    Clarification regarding Consolidated Fund and Contingency Fund


    Confused about the difference between Consolidated Fund and Contingency Fund? wondering if such funds are offered by all state governments? Here, on this page read the suggestions from experts to all your queries.

    I would like to have detailed clarification in respect of following issues:-

    (a) What is the differences between Consolidated Fund of India and Contingency Fund of India?
    (b) Under which Articles of the Constitution of India, these two funds are constituted?
    (c) Are there similar types of funds of each State Government of India?
    (d) What are the Constitutional provisions in respect of such State funds.

    Kindly furnish point-wise reply.
  • #146809
    Contingency Fund of India:
    This fund is being held by the President of India. He can spend from this fund for emergency and unforeseen circumstances. No authorization from Parliament is required,
    Public Accounts of India:
    1. Bank savings account of the departments/ministries
    2. National Investment fund
    3. National Calamity & contingency fund (NCCF)
    4. National small savings fund, defence fund.¬¬
    5. Prarambhik Shishak Kosh, MNREGA fund
    6. Provident fund, Postal insurance etc. and so on
    No permission from parliament to government is required for spending from this account.
    Consolidated Fund of India: All the cash from direct and indirect taxes, all the loans that are taken by the government of India and money returned as principal or interest of the loans given by the government. This is the largest of all three funds. The government needs parliament's approval to spend money from this fund.

    drrao
    always confident

  • #146817
    Contingency fund of India was established under article 267(1) of Indian constitution. It is money held for a specific purpose (calamities, sudden emergency) by the finance secretary on behalf of the President of India.It is around 500 crores. It can be withdrawn by executive action but need the subsequent approval form Parliament and the money is returned to the main corpus. Similar emergency Contingency funds are held by the states also, the amount is variable.

    The Consolidated fund of India, under article 266(1) is one wherein all loan repayments, fees and revenue earned is deposited. The income and expenditure related to the consolidated fund of India is audited by the Controller and Auditor General of India. Withdrawals from this fund needs the authorization of the Parliament.

    In case of Contingency fund use, subsequently parliament authorities the return of funds from Consolidated fund back into the Contingency fund.

  • #146824

    What is the differences between Consolidated Fund of India and Contingency Fund of India?

    Consolidated fund is the chief account of Indian Government. This fund has the income from tax and nontax revenues. Money for the expenditure of government is withdrawn from this fund and withdrawing money from this fund requires the approval from parliament.

    Contingency fund has a fixed deposit of Rs 500 crore. This fund is used for emergency situations or for unpredicted expenditures by the president of India. After the expenditure, on approval from the parliament, the money withdrawn will be returned to the fund from consolidated fund.

    Under which Articles of the Constitution of India, these two funds are constituted?

    Consolidated fund is under Article 266(1) and contingency fund is under Article 267(1) of the Indian Constitution.

    Are there similar types of funds of each State Government of India?

    Each state has its own consolidated funds and contingency fund with the same provisions.

    What are the Constitutional provisions in respect of such State funds?

    Contingency fund for state government is under Article 267(2). According to this unpredicted or emergency expenditure can be met with the approval from governor when the approval from state legislature is pending. Consolidated fund of state meets the allowances and salaries for Governor, speaker, deputy speaker, high court judges etc.

  • #146886
    The contingency fund of Rs 500 crores is set up under article 267 (1) of the constitution and is used for unforeseen expenditures with the permission of President. This is in nature of impress recoupable advance and once the expenditure is post facto approved by the parliament the amount is recouped back to the fund to make it again Rs 500 crores. States have their contingency funds on the same line.

    On the other hand the consolidated fund under article 266 (1) of the constitution is the main fund for the Govt and is fed through various direct and indirect taxes, loans from the treasuries and other non tax revenue receipts by Govt. Expenditure from this fund are made after the approval of parliament. States have their consolidated funds on the same lines.

    There is also a third type of fund which is Public fund under article 266 (2) of constitution and consists of all the deposits etc taken on behalf of Govt. This is Public money and Govt has an obligation for its repayment to the contributors. Govt does not require parliament approval for expenditures from this fund. States have their public funds on similar lines.

    Knowledge is power.


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