Previous Year Question

Under Article 266(1), all revenues received by the Government of India, all loans raised by it and all money received in repayment of loans form one fund known as the Consolidated Fund of India.

Money credited to the Consolidated Fund

It principally includes:

• Direct taxes such as income tax and corporation tax.

• Indirect taxes such as customs duties and the Union’s share of Goods and Services Tax.

• Non-tax revenue such as fees, dividends, interest and receipts from government services.

• Money borrowed by the Government through treasury bills, loans and ways and means advances.

• Money received in repayment of loans given to State Governments or other institutions.

Ordinary government expenditure—such as defence expenditure, salaries, pensions, interest payments, expenditure on schemes and grants to States—is generally incurred from this Fund.

It is the principal account of the Government, but no money can be withdrawn from it without legal authorisation by Parliament.

Why are the other options incorrect?

(a) Contingency Fund of India

• It is provided under Article 267(1).

• It is placed at the disposal of the President.

• It is used for urgent and unforeseen expenditure for which prior parliamentary authorisation cannot immediately be obtained.

• It is subsequently recouped from the Consolidated Fund after Parliament authorises the expenditure.

• Regular tax and other government revenues are not credited to this Fund.

(b) Public Account of India

• Under Article 266(2), other public money received by or on behalf of the Government, which does not form part of the Consolidated Fund, is credited to the Public Account.

• It may include provident funds, small savings, court deposits, departmental deposits, remittances and other deposits.

• The Government principally acts as a banker or trustee regarding this money.

• Withdrawal from the Public Account does not require parliamentary appropriation, although its accounts remain subject to CAG audit.

(d) Deposits and Advances Fund

Deposits and advances do not constitute one of the three independent constitutional funds. They are generally an accounting sector within the Public Account.

Three principal public accounts of the Union

• Consolidated Fund of India—Article 266(1)

• Public Account of India—Article 266(2)

• Contingency Fund of India—Article 267(1)

Therefore, tax revenue and other revenue received for conducting government business are credited to the Consolidated Fund of India.