The interim budget has arrived, and the finance ministry has announced the outlay for upcoming months up till the elections, along with giving a brief overview of the government expenditures. In the preceding financial year. But where does the union keep its money?
The central government maintains different types of funds to keep the money it has received from taxes, exports, and many other government activities.
There are three types of funds that the government maintains. These are The Consolidated Fund of India, The Contingency Fund of India and The Public Account of India.
Consolidated Fund of India
This fund is mentioned in Article 266(1) of the Constitution of India. It is the most important account of the government, and all the funds raised through direct and indirect taxes and the loans taken by govt. of India along with income generated by loans/interests of loans to the government by anyone/agency that has taken it.
Each State can have its own Consolidated fund of State with the same provisions. The government needs parliamentary approval to withdraw money from this fund, and this is audited by the Comptroller and Auditor General (CAG) of India.
Contingency Fund of India
This fund finds its mention in Article 267(1) of the Constitution of India. It has a corpus of 30000 crores that is maintained for a specific purpose like any emergency, war or natural calamity.
The secretary of the Finance ministry holds 40% of this fund on behalf of the President of India who can withdraw the money at will. However, it requires parliamentary approval after the expenditure has been made.
Each State can have its own fund under the same provisions as mentioned in the Constitution under Article 267(2).
Public Account of India
Any kind of other public money (apart from those covered under the Consolidated Fund of India) of the Indian Government is credited to this account.
The Public Account of India finds its mention in Article 266(2) of the Constitution. It is made up of savings accounts of various ministries and departments, a National small savings fund, a National Investment fund(proceeds of disinvestment), a provident fund, Postal insurance, and a National Calamity and Contingency fund for disaster management.
The government does not have any permission to take advances from this fund, and each State can have their fund under similar provisions.
The Comptroller General of India audits this account and submits the report to the President/ Governor in case of states, and then the President/Governor causes these reports to be tabled in the legislature.
The Expenditures of Government
These are non-votable charges, and no voting takes place for the amount that is charged to the Consolidated Fund of India, which means parliamentary approval is not required for this. These expenses are paid no matter whether the budget is passed or not.
Emoluments, allowances and expenditures of the President and his office, salary and allowances of the chairman, Deputy Chairman of Rajya Sabha, Speaker, Supreme Court judges, CAG and Deputy Speaker of the Lok Sabha, debts owed by the government come under this expenditure.
These are non-votable because the State guarantees these payments. Even though voting does not take place, these can be discussed in the parliament.
This is the real budget that contains all the necessary expenditures. These expenditures are listed in the form of a Demand for Grants, which is presented to the Lok Sabha along with the Annual Financial Statement, and voting takes place for these expenditures. Typically, each Ministry or Department has its own Demand for Grants that is presented.
These are granted when the money allotted for a specific service/department/ministry needs to be insufficient, and there is a requirement for more funds.
These grants are made when there is a need for funds for any new service which was unaccounted for in the current budget.
Excess Grant is granted when the expenditure for a service exceeds the budgeted amount for that service in a fiscal year.
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