Part XII of the Constitution of India
(Articles 266 and 267) provide for the
establishment of:
a) The Consolidated Fund of India and
the Consolidated Fund of each State;
b) The Public Account of India and the
Public Account of each State; and
c) The Contingency Fund of India and
Contingency Fund of each State.
Consolidated Fund of India and of the
States
Subject to the provisions of Article 267
of the Constitution (relating to
Contingency Fund) and also subject to
the provisions of the Constitution
relating to the assignment of the whole
or part of the net proceeds of certain
taxes and duties to States, all revenue
received by the Government of India, all
loans raised by that Government by issue
of treasury bills, loans or ways and
means advances and all moneys received
by that Government in repayment of
loans shall form one consolidated fund to
be entitled ‘The Consolidated Fund of
India’. Similarly all revenues raised by
the Government of a State, all loans
raised by that Government by issue of
treasury bills, loans or ways and means
advances and all moneys received by
that Government in repayment of loans
shall form one consolidated fund to be
entitled ‘The Consolidated Fund of the
State’. (Refer to Article 266(1) of the
Constitution).
No money out of the Consolidated Fund
of India or the Consolidated Fund of a
State shall be appropriated except in
accordance with the law and for the
purposes and in the manner provided in
the Constitution.
Public Account of India and of the
States
Apart from the money creditable to the
Consolidated Fund of India or to the
Consolidated Fund of a State, all other
public moneys received by or on behalf
of the Government of India or the
Government of a State shall be credited
to the Public Account of India or the Public Account of the State, as the case
may be.
Contingency Fund
Under article 267 of the Constitution,
Parliament may by law establish a
Contingency Fund in the nature of an
imprest to be entitled ‘The Contingency
Fund of India’ into which shall be paid
from time to time sums (from
Consolidated Fund of India) as may be
determined by law, and such Fund shall
be placed at the disposal of the President
to enable advances to be made by him
out of such fund for the purposes of
meeting unforeseen expenditure pending
authorization of such expenditure by
Parliament by law under relevant articles
of the Constitution (under Article 115 or
under Article 116).
Similarly, the Legislature of a State may
by law establish a contingency fund in
the nature of imprest into which shall be
paid from time to time such sums as may
be determined by such law, and the said
Fund shall be placed at the disposal of
the Governor of the State to enable
advances to be made by him out of such
fund for the purposes of meeting
unforeseen expenditure pending
authorization of such expenditure by the
Legislature of the State by law under
Article 205 or Article 206 of the
Constitution.
Based on the constitutional requirement,
the Government Accounts are kept in
these three main divisions, viz.:
- Consolidated Fund;
- Contingency Fund; and
- Public Account.
These funds and accounts exist
separately for the Government of India,
for each State and for each Union
Territory having a Legislative Assembly.
There being no separate Public Account
in the case of Union Territory
Governments, the transactions pertaining
to this account shall be booked in the
Public account of the Central
Government.
The Accounts of Union Territories of
Delhi, Andaman and Nicobar Island,
Dadra and Nagar Haveli, Lakshadweep,
Chandigarh and Daman and Diu which
do not have Legislative Assemblies,
form part of the Accounts of the
Government of India.
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