Consolidated Fund India
Updated on July 18, 2023
Government has a detailed structure of the flow of funds to be utilised for capital and revenue expenditures. The financial accounts of the Government are divided into three categories namely, Consolidated Funds of India, Contingency Fund of India, and Public Account. Given here is the meaning of Consolidated Funds of India and its relevance.
Meaning of Consolidated Funds of India
The Consolidated Fund is established under Article 266(1) of the Indian Constitution. All revenues received by the government, such as taxes, duties, fees, and other receipts, are deposited into this fund. It also includes loans raised by the government and recoveries of loans granted by the government. The funds in the Consolidated Fund are utilized to meet the government’s day-to-day expenditures, including salaries, pensions, debt servicing, defense, infrastructure development, and various other expenses.
The funds in the Consolidated Fund are under the control of the government and can be utilized only through the authorization of the Parliament. The government cannot withdraw money from this fund without the approval of the Parliament through the passage of appropriation bills. These bills specify the nature and amount of expenses for which funds can be withdrawn from the Consolidated Fund. The Consolidated Fund ensures that all government revenues and expenditures are consolidated into a single account, providing transparency and accountability in public finance. It helps the government in managing its finances effectively and ensures that expenditures are authorized and aligned with the priorities set in the budget.