Indian Government Accounting: Consolidated Fund, Public Account, Contingency Fund

Indian constitution provides for 3 accounts for management of accounts of Govt. of India, they are Consolidated fund of India, Public Account and Contingency Fund. 

These accounts provide for meeting unforeseen circumstances (Contingency Fund of India), revenue management (Consolidated Fund of India) and investment money that Govt. holds for organized sector public employees (public account).

Consolidated Fund of India

Article 266 (1) mentions this fund. Expenditure for the conduct of the business of govt. is met from this fund. All the loans (including those raised through treasury bills. Read about Money and Capital market)

Every State is required to maintain their separate Consolidated Fund.

Public Account

Article 266 (2) provides, all other money (except those under the Consolidated Fund) comes under this account. It is to be noted unlike Consolidated fund, credits to this account do not form part of routine credit and debit/transactions.

Similar to the Consolidated Fund, states are required to maintain separate public accounts. 

Contingency Fund of India

Article 267 (1) says it be maintained in the nature of imprest account.

Let’s see how they differ from each other.

Basis Consolidated Fund Public Account Contingency Fund
Composition All taxes, loans raised/paid/granted to/from domestic and foreign sources.

Provident fund, postal saving certificates etc.

(Money that public gives to Govt. in the form of savings, which will be returned to him/her on a future date.)

Money set aside for meeting unforeseen exigencies.
Corpus Varies from time to time,i.e. not fixed. Varies from time to time,i.e. not fixed. 500 crore. (It was recently raised by the Parliament)
Authority Parliament is in charge of this fund. Parliament is in charge of this fund. President holds it under him. (Finance secretary of Ministry of Finance, holds it on behalf of the President.)
Permission Prior permission of Parliament is required,i.e. permission before expenditure can be made. No prior or post approval of Parliament is required for expenditure from this corpus. Permission is required. However, this permission can be obtained post the expenditure has been made. 

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