In India, the funds play a crucial role in managing government finances. The three main funds are the Consolidated Fund of India, the Contingency Fund of India, and the Public Account of India. Each fund serves a specific purpose and has distinct features.
1. Consolidated Fund of India (CFI):
A. Definition:
- The Consolidated Fund of India is the primary fund of the government into which all revenues are credited, and from which all expenditures are made.
B. Sources of Revenue:
- All government revenues, including taxes, fees, fines, and loans raised, are credited to the Consolidated Fund.
C. Expenditure:
- All government expenditures, both regular and special, are incurred from the Consolidated Fund.
D. Parliamentary Approval:
- Expenditure from the Consolidated Fund requires parliamentary approval through the passage of appropriation bills.
E. Charged Expenditure:
- Certain expenditures, known as charged expenditures (e.g., salaries of the President, Judges, and other constitutional authorities), are charged directly on the Consolidated Fund and do not require annual parliamentary approval.
F. Exceptional Expenditure:
- All other expenditures, referred to as voted expenditures, require specific approval through the budgetary process.
2. Contingency Fund of India:
A. Definition:
- The Contingency Fund of India is a fund set aside for emergencies or unforeseen expenditures.
B. Objective:
- The primary purpose of the Contingency Fund is to provide immediate funds to meet urgent or unforeseen expenses when the necessary parliamentary approvals cannot be obtained promptly.
C. Amount:
- The amount of the Contingency Fund is determined by Parliament, and the President of India has the authority to make advances from this fund.
D. Parliamentary Approval:
- Advances from the Contingency Fund are later regularized by obtaining parliamentary approval through the passage of a Supplementary or Additional Grant.
E. Role in Emergencies:
- The Contingency Fund is especially useful in times of emergencies when quick financial resources are required.
3. Public Account of India:
A. Definition:
- The Public Account of India is used for transactions that do not form a part of the Consolidated Fund or Contingency Fund.
B. Nature of Transactions:
- The Public Account includes transactions such as the receipt of funds for specific purposes, deposit funds, and utilization of funds held for specific objectives.
C. Examples:
- Funds related to Provident Funds, Small Savings, and other specific deposits are maintained in the Public Account.
D. Parliamentary Control:
- Transactions in the Public Account do not require annual parliamentary approval; however, any changes or withdrawals from specific funds held in the Public Account may be subject to parliamentary scrutiny.
E. Interest:
- Interest earned on investments made from the Public Account is also credited to the Public Account.
The separation of funds into different categories ensures transparency, accountability, and parliamentary oversight in the utilization of public resources.
