Anand Classes provides comprehensive Consolidated Fund of India, Contingency Fund of India, and Public Account of India (Articles 266 & 267) Polity Notes for NDA, covering constitutional provisions, differences, and significance of each fund. These notes are designed in a simple, exam-oriented format to help aspirants clearly understand government finances and strengthen their NDA GAT preparation. Click the print button to download study material and notes.
The Accounts of Government – NDA Polity Study Guide
he Constitution of India provides for three types of funds/accounts to handle the Union Government’s revenues and expenditures. These are:
- Consolidated Fund of India – Article 266(1)
- Contingency Fund of India – Article 267
- Public Account of India – Article 266(2)
These three funds together ensure financial discipline, transparency, and constitutional control of Parliament over government expenditure.
1. Consolidated Fund of India (CFI) – Article 266(1)
- The most important fund of the Government of India.
- Revenues credited into it:
- All tax revenues (Income Tax, Customs Duty, Excise Duty, GST, etc.).
- All non-tax revenues (fees, fines, dividends from PSUs, interest, etc.).
- Loans credited into it:
- Internal borrowings (treasury bills, public loans, bonds).
- External borrowings (loans from foreign governments and international organizations like IMF, World Bank).
- Expenditure:
- All government spending such as defense, infrastructure, subsidies, pensions, and salaries is made from this fund.
- Withdrawal rule:
- No amount can be withdrawn without Parliamentary approval.
- This ensures that executive spending is controlled by the legislature (Lok Sabha).
👉 Because of its comprehensiveness, the CFI is the backbone of Union Government finances.
2. Contingency Fund of India – Article 267
- A fund created to meet emergencies or unforeseen expenditures.
- Operated by: The President of India.
- Held by: The Secretary, Ministry of Finance, Department of Economic Affairs on behalf of the President.
- Nature of fund:
- Works like an imprest account (a small cash reserve kept for urgent use).
- The government can withdraw immediately from it without waiting for Parliamentary approval.
- However, such expenditure must later be approved by Parliament to maintain constitutional accountability.
👉 This fund ensures that the government is never helpless in case of natural disasters, war, or urgent financial needs.
3. Public Account of India – Article 266(2)
- A fund for money that does not belong to the Government of India, but is kept in its custody as a trustee or banker.
- Examples:
- Provident Fund deposits.
- Postal savings deposits.
- Small savings schemes.
- Court deposits and judicial fines.
- Security deposits of contractors.
- Key feature:
- Since this money does not belong to the government, it does not form part of normal revenues.
- Therefore, no Parliamentary approval is needed for withdrawals from this fund.
- However, the government has a legal obligation to repay these funds when due.
👉 The Public Account shows the fiduciary (trust-based) role of the government in handling citizens’ money.
Differences Between Consolidated Fund of India, Contingency Fund of India and Public Account of India
| Feature | Consolidated Fund | Contingency Fund | Public Account |
|---|---|---|---|
| Article | 266(1) | 267 | 266(2) |
| Money belongs to | Government | Government (for emergencies) | Other parties (public deposits, etc.) |
| Withdrawal requires Parliament approval? | ✅ Yes | ❌ No (but later approval required) | ❌ No |
| Usage | Regular government expenditure | Emergency expenditure | Deposits, savings, advances |
| Controlled by | Parliament (Lok Sabha) | President of India | Government as trustee |
Important for NDA Exam
- The three accounts of government are a favorite topic in UPSC NDA polity section.
- Questions are often asked about:
- Which account requires Parliamentary approval.
- Which account is used for emergency expenditure.
- Which account contains public deposits like Provident Fund.
- This ensures you understand financial accountability and separation of powers.
NDA FAQs on The Accounts of Government for SSB Preparation
❓What is the Consolidated Fund of India?
The Consolidated Fund of India (Article 266(1)) is the chief account of the government, where all tax revenues, non-tax revenues, and loans are deposited. All government expenditure is made from this fund with the approval of Parliament.
👉 This is a frequently repeated topic in UPSC NDA polity notes preparation and explained in UPSC NDA study material pdf and Anand Classes UPSC NDA notes download.
❓What is the difference between Consolidated Fund and Public Account?
- Consolidated Fund: All revenues + loans; expenditure requires Parliament’s approval.
- Public Account: Holds money for which government is a trustee (like PF, postal deposits); no parliamentary approval is required for withdrawal.
👉 This difference is important for NDA polity exam questions and covered in UPSC NDA notes download.
❓What is the purpose of the Contingency Fund of India?
The Contingency Fund of India (Article 267) is meant for urgent or unforeseen expenditure. The President can authorize withdrawal, but the expenditure must later be approved by Parliament.
👉 Direct factual question for UPSC NDA polity exam, included in Anand Classes NDA notes and UPSC NDA study material pdf.
❓Who controls the three government funds?
- Consolidated Fund of India: Controlled by Parliament.
- Contingency Fund: Held by President, managed by Ministry of Finance.
- Public Account: Managed by government as trustee.
👉 A procedural question type, often asked in UPSC NDA polity preparation.
❓Why is the Consolidated Fund of India considered the most important?
Because all revenues and loans go into it and all government expenditure is met from it, making it the primary account of the Union Government.
👉 Very commonly asked in NDA polity MCQs, easily revised from UPSC NDA study material pdf.
MCQs – The Accounts of Government (NDA Polity Practice)
Q1. Which of the following is the most important fund of the Government of India?
A) Public Account of India
B) Contingency Fund of India
C) Consolidated Fund of India
D) National Investment Fund
Answer: C) Consolidated Fund of India
Explanation: The Consolidated Fund of India (Article 266(1)) contains all tax revenues, non-tax revenues, and loans. It is the chief account of the Union Government, and all expenditure is made from it only after Parliament’s approval.
👉 A frequently repeated fact in UPSC NDA polity notes preparation and available in UPSC NDA study material pdf.
Q2. Expenditure from which of the following funds requires prior approval of Parliament?
A) Consolidated Fund of India
B) Contingency Fund of India
C) Public Account of India
D) Both B and C
Answer: A) Consolidated Fund of India
Explanation: Only withdrawals from the Consolidated Fund of India need Parliamentary authorization. The Contingency Fund can be used immediately (later approval needed), and Public Account withdrawals do not require any approval since it is trust money.
👉 This is a conceptual question asked often in NDA polity MCQs and covered in Anand Classes UPSC NDA notes download.
Q3. The Contingency Fund of India is held by:
A) Prime Minister of India
B) Finance Commission
C) President of India
D) Speaker of Lok Sabha
Answer: C) President of India
Explanation: Under Article 267, the Contingency Fund of India is held by the President and operated by the Finance Secretary. It is used for urgent or unforeseen expenditure.
👉 Direct factual question for UPSC NDA exam, available in UPSC NDA polity notes pdf.
Q4. Which of the following statements is correct regarding the Public Account of India?
A) It contains money belonging to the Government of India.
B) Withdrawals require Parliament’s approval.
C) It contains deposits like Provident Fund and Postal Savings.
D) It is used for emergency expenditure.
Answer: C) It contains deposits like Provident Fund and Postal Savings.
Explanation: The Public Account (Article 266(2)) holds money that does not belong to the Government. Examples: Provident Fund deposits, small savings, judicial deposits. Withdrawals do not require Parliamentary approval.
👉 Important conceptual difference tested in UPSC NDA polity exam preparation and explained in Anand Classes NDA notes download.
Q5. Which of the following funds can be spent without prior approval of Parliament, but requires subsequent approval?
A) Consolidated Fund of India
B) Contingency Fund of India
C) Public Account of India
D) Both A and B
Answer: B) Contingency Fund of India
Explanation: The Contingency Fund of India (Article 267) allows the government to spend immediately in case of unforeseen emergencies. However, such spending must later be approved by Parliament.
👉 Very scoring question for UPSC NDA polity exam included in UPSC NDA study material pdf.
Q6. Loans raised by the Government of India through treasury bills and external borrowings are credited into:
A) Contingency Fund of India
B) Public Account of India
C) Consolidated Fund of India
D) Reserve Bank of India Fund
Answer: C) Consolidated Fund of India
Explanation: All loans raised by the government, whether internal (treasury bills, bonds) or external (from foreign countries/IMF/World Bank), are credited to the Consolidated Fund of India.
👉 High-probability question in NDA polity exam practice, included in Anand Classes UPSC NDA notes.
Q7. Which of the following does NOT require Parliamentary approval for withdrawal?
A) Expenditure from Consolidated Fund of India
B) Withdrawal from Contingency Fund of India
C) Withdrawal from Public Account of India
D) All of the above
Answer: C) Withdrawal from Public Account of India
Explanation: The Public Account of India (Article 266(2)) does not require Parliamentary approval because the money does not belong to the government—it is trust money like PF deposits, postal savings, etc.
👉 Direct factual recall type, common in UPSC NDA polity notes preparation.
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