Consolidated Fund of India
The Consolidated Fund of India is the primary fund of the Government of India, established under Article 266 (1) of the Constitution of India. It is a fund into which all revenues raised or received by various government departments and bodies are deposited, and withdrawals from which are subject to parliamentary control.
Origin and Purpose
The Consolidated Fund of India was created to promote accountability between the executive and the legislature in governance and public finance. Instead of individual funds for each government department, the framers of the Constitution decided to pool all government revenue into one fund to enable an overall view and control of public spending. This fund is operated by the Finance Ministry under procedures established by Parliament.
Components
All revenues received by the government, all money raised by borrowing, all income from loans given by the government, and all money received in repayment of loans forms part of the Consolidated Fund of India. This includes:
- Tax revenues such as income tax, corporate tax, customs duties etc.
- Non tax revenues such as license fees, dividends from PSUs etc.
- Grants-in Aid from foreign countries
- Income from Railways
Some exceptions to this rule include money raised from disinvestment or privatization which is kept in the National Investment Fund.
Withdrawal Process
As per Article 266 (3), no money can be withdrawn from the Consolidated Fund of India without the enactment of a law by Parliament. Thus, government spending from this fund requires approval from Parliament. This is done through the annual budget, where Parliament approves withdrawal of funds for various purposes through Appropriation Bills. Money can also be withdrawn in exceptional cases through supplementary grants approved by Parliament. This promotes legislative oversight of government spending.
Audit
As per Article 148 (1), the Comptroller and Auditor General (CAG) audits all expenditure from the Consolidated Fund of India to ensure legal compliance. The CAG submits audit reports to the President, who causes them to be laid before the Parliament. This promotes financial accountability of the executive towards the legislature. In this way, the Consolidated Fund of India established by the Constitution ensures proper accountability, oversight and transparency in management of public finances.
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