Government Accounts

Introduction

Like private entities, the Government of India has various accounts through which it manages funds and various short-term and long-term financial activities. The funds are kept into three different accounts which are the Consolidated Fund of India, Public Account of India, and Contingency Fund of India.  

Consolidated Fund of India

• It draws its existence from Article 266 (1) of the Constitution. 
• All revenues received by the Government such as  loans raised by it, receipts from recoveries of loans granted by it, together form the Consolidated Fund of India. 
• All expenditure of Government is incurred from this fund and no amount can be drawn without the due authorization from the Parliament.
• The Comptroller and Auditor General of India audit this fund.

Public Account of India

• It draws its existence from Article 266 (2) of the Constitution. 
• Money held by the Government in trust is kept in the Public Account such as Provident Funds, Small Savings collections, etc. 
• Funds in the public account do not belong to the Government and have to be finally paid back to the persons and authorities, who deposited them.
• It does not require Parliamentary authorization for withdrawals.

Contingency Fund of India

• It draws its existence from Article 267 of the Constitution.
• It authorizes the existence of a Contingency Fund of India, which is placed at the disposal of the President of India to facilitate meeting of urgent unforeseen expenditure by the Government. 
• Parliamentary approval is required for such unforeseen expenditure. 
• The corpus of the Contingency Fund as authorized by Parliament presently stands at Rs. 500 crores.

Note- The Reserve bank of India, being a banker of the government, manages these three funds.