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Understanding about Funds of India (for UPSC CSE/IAS exam)
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In this lesson, the presenter explains about the various funds and their role as parliamentary instruments. He begins the lesson by explaining in detail about the consolidated fund of India, contingency fund of India and Public account of India.

Bhavin Sangoi
BA Political Science and Psychology, Mumbai University. Teaching Polity, Economics and international relations for 7 years.

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നാലാമത്തെ question സൗത്ത് ആഫ്രിക്കന് മനസിൽ പറഞ്ഞുകൊണ്ട് സൗത്ത് കൊറിയ അടയാളപ്പെടുത്തി ഇന്ന് ഫുൾ വാങ്ങുന്ന കരുതിയതായിരുന്നു
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9 months ago
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Sir, when the government bonds are issued they also need to be paid after some time by the govt. So shouldn't they would come under the public account of india...... As it is also a temproral mony that is to be paid by the govt.?? Plzz clear ...
Bhavin Sangoi
3 years ago
Let us first understand the difference between money in Consolidated fund of India and money Public accounts of India. Money in CFI is owned by government either in the form of assets (tax) or in the form of liabilities (debt), which it can use on its volition. On the other hand government doesn't own the money in Public accounts of India, it just acts as a trustee of money for instance money deposited as election deposit or security deposit for government contracts. Now money accumulated by government by selling bonds is also a kind of debt, which government owes to the bond holder, and the primary purpose of issuing bond is that government wants to use money for the time being. When government accumulates certain amount in Public accounts of India, the primary motive isn't to use the money, but is something else. So depending on the motive of accumulating money and role played by government either as the owner or as trustee, the money is kept in either of the two accounts.
Bhavin Sangoi
3 years ago
As mentioned above the bond money is owned by government in the form of liability and is accumulated to use it. It is kept in CFI. In fact Economic Survey 2015-16, precisely called debt as "deferred taxation", because ultimately debt will have to be paid by future generations in the form of increased tax. Government could've accumulated same amount of money by increasing taxation now but either to avoid being unpopular among masses because of heightened taxes or because people don't have the capability to pay taxes now, Government defers it for some time by borrowing money, which will be paid by this same lot of people in future along with intrest and then government will have to charge more tax to them to extract this money.
Sir what a wonderful concept! Thanks for that clarification
Sir, why does the govt. not need permission of parliament to withdraw money from the public accounts of India, as you have said about NDRF?
Sir from which fund does government pays to different state governments for special help in case of droughts or relief to farmers. Please let me know. Thank you
Bhavin Sangoi
3 years ago
Draught relief to farmer is provided from National Disaster Relief Fund (NDRF) and State Disaster Relief Funds(SDRF), NDRF is a part of Public Accounts of India and SDRF is a part of Public Accounts of State.
Bhavin Sangoi
3 years ago
By the way money into NDRF is provided from Consolidated fund of India and in case of SDRF, 75% money to General category states and 90% money to Special category states, is provided by central government in the form of non plan grants. This money too is contributed from Consolidated fund of India. In short money is transferred from Consolidated fund to Public Account in which NDRF is created and from here money is provided to farmers.
Rahul Sharma
3 years ago
Thank you sir for clearing my doubts.
Abhinandan Dubey
3 years ago
If National Disaster Relief Fund (NDRF) is part of Public account of India, then it means that Parliamentary approval (Appropriation bill) is not required to withdraw money from this account. Please confirm...
Bhavin Sangoi
3 years ago
Yes it doesn't require permission of Parliament
Sir in that maharastra chattishgarh cement example.. is it CENVAT or CST ?
Bhavin Sangoi
3 years ago
Sales tax was replaced by VAT, so earlier it was CST now it is CENVAT.
Manav Chawla
3 years ago
sir but VAT is for INTRA STATE trade and commerce.. Central sales tax is for INTER STATE trade and commerce.. And also sir Constitution provides for that the Inter state trade and commerce shall be free but then we have these taxes for it..can you please clarify this sir
Bhavin Sangoi
3 years ago
VAT is also a kind of Sales tax, because it is levied on the sale of goods. The difference is just that Sales tax is collected on aggregate amount, whereas VAT is collected on value addition at every stage. Imposition of tax doesn't mean inter state trade is not free. I will discuss this topic in detail in next series, on Center state relations.
Manav Chawla
3 years ago
ok sir this topic needs clarifications.. realy looking forward to your next series
AJ
Hello sir, Thank you so much for guiding us. I actually want to clarify that whether Public Account of India will come under Article 266 or 267 of the constitution because as per Laxmikant it is article 266.
Bhavin Sangoi
4 years ago
Thanks for pointing out the mistake, it's article 266. Here Laxmikant correct.
  1. Course: Gain an understanding of Parliamentary Processes and Instruments Lesson Funds Presented by Bhavin Sangoi


  2. About me . B.A in Political Science & Psychology . Appeared in UPSC CSE Mains Teaching Indian Polity, International Relations, economics & mental Ability since 5 years Experience of teaching for various competitive exams such as NTSE, CET & UPSC . Follow me on: https://Unacademy.in/user/BhavinSangoi


  3. Consolidated fund of India It is the treasury of government of India, According to article 266(1), except 'net proceeds of certain taxes and duties' which are assigned to states, by Chapter I of Part XII, following money would form the part of the fund . It is the treasury of government of India


  4. Continued . All revenue received by the by the Government of India e loans raised by Government by the issue of treasury bills, Loans or ways means advances . All money received by the Government in repayment of loan:s


  5. Contingency fund of India It is the fund which government can tap during the time of contingency . It is the fund which government can tap during the time of According to article 26 Contingency fund of India" 7, Parliament may by law establish the


  6. Continued The same law also specifies how much and when money should be deposited into the fund It is put at the disposal of President of India, so that he can advance money for unforeseen expenditure, pending approval of Parliament e It is put at the disposal of President o


  7. Public account of India . According to article 267 public money, other than that which has to be deposited into Consolidated fund of India, is deposited into this account According to article 284, various deposits in court cases, deposits for government contracts etc., form the part of this fund


  8. Government Borrowing Government of India can borrow money upon the security and TOvernment O guarantee of Consolidated fund of India, subject to limits fixed by the law made by parliament . Fiscal Responsibility and Budget Management Act, mandates that for the year 2016, Fiscal deficit of Government of India shouldn't cross the limit of 3.9 % of GDP