Introduction
The Consolidated Fund of India contains revenue collected by the government via taxes as well as expenses incurred through borrowings and loans. It is one of three components of the Annual Financial Statement, the other two being the Contingency Fund and the Public Account.
Except for a few contingency or public fund expenses, all government expenditures are paid by consolidated funds. Article 266 of the Indian Constitution established the Consolidated Fund of India. It is also regarded as the most significant part of the financial statement. Every state, like the Centre, has its own Consolidated Fund.
The Consolidated Fund of India is divided into five parts namely:
Revenue account (receipts)
Revenue account (disbursements)
Capital account (receipts)
Capital account (disbursements)
Disbursements charged on the Consolidated Fund.
It includes:
Revenue earned indirect taxes such as income tax, corporate tax, etc
Revenue earned in indirect taxes such as GST
Dividends and profits from PSUs (Public Sector Undertakings)
Money earned through the government’s general services
Disinvestment receipts
Debt repayments
Loan recoveries
The Comptroller and Auditor General of India audit this Fund.
All government expenditure is made from this fund, except exceptional items which are met from the Contingency Fund or the Public Account. Importantly, no money can be withdrawn from this fund without the Parliament’s approval.
Expenditures Charged on Consolidated Funds
The chargeable expenditures on the Consolidated Funds of India are non-votable, which means that no vote is required to withdraw these expenditures. Whether or not the budget is passed, these charges must be paid in the form of salaries and allowances for:
● The President
● The Speaker
● The Deputy Speaker of the Lok Sabha
● The Chairman and Deputy Chairman of Rajya Sabha
● Salaries and allowances of Supreme Court judges
● Pensions of Supreme Court and High Court judges