Updated: Nov 13, 2020
You may have heard or read these words in the newspaper and must have seem new tough words.
Actually these are very important elements of the country which provide funding to the country to use for its betterment.
These are types of funds of the Central Government and you can read more about them in Indian Polity.
1. Consolidated Fund of India (CFI)
The Consolidated Fund is as per the provision given in Article 266(1) in the constitution of India and it’s the largest one.
This fund is filled by direct and indirect taxes collected, a loan taken by the government, and the interest earned on the loan lent to anyone/ agency.
The government cannot withdraw money from this fund without parliamentary approval.
Each state can have its own Consolidated Fund under same provision.
2. Public Accounts of India
The Public Accounts of India I as per provision given in the Constitution of India in Article 266(2).
This fund is filled by public money other than those considered in the Consolidated Fund, like collected Provident Fund, savings of ministries & departments, defense fund, Contingency Fund, Postal Insurance, etc.
The government can withdraw money from this fund without any approval.
Each state can have its own Public Accounts under the same provision.
3. Contingency Fund of India
This fund is provided under Article 267(1) of the Constitution of India.
There’s no compulsion about this fund’s existence but Parliament is authorized to have one if needed.
The Secretary, Finance Ministry holds this fund on behalf of the Prime Minister of India.
Contingency Fund is used as a relief in national calamity and disaster management.
Contingency Fund has a corpus of 500 crores. After approval of the Parliament, 500 crores can be transferred from Consolidated Fund to Contingency Fund.
Each state can have its own Contingency Fund under the same provision.