Previous Year Question

Article 267 of the Constitution provides for the Contingency Fund. Under Article 267(1), Parliament may by law establish the Contingency Fund of India, which is maintained in the nature of an imprest.

The Contingency Fund of India is placed at the disposal of the President so that advances may be made for unforeseen expenditure pending final authorisation by Parliament. Such expenditure is subsequently authorised under Articles 115 or 116.

Article 267(2) provides a parallel arrangement for the States. A State Legislature may establish a Contingency Fund of the State, placed at the disposal of the Governor, for advances required to meet unforeseen expenditure pending legislative authorisation.

The distinction among the other options is important. Article 265 prohibits taxation without authority of law; Article 266 deals with Consolidated Funds and Public Accounts; while Article 268 concerns certain duties levied by the Union but collected and appropriated by the States.

Thus, the useful examination association is—Article 266 = Consolidated Fund/Public Account; Article 267 = Contingency Fund.