All revenues received by the Union Government by way of taxes and other receipts for the conduct of Government business are credited to the
Contents7
- AContingency Fund of India
- BPublic Account
- CConsolidated Fund of India
- DDeposits and Advances Fund
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Answer: (C) Consolidated Fund of India
The answer is (c) — Consolidated Fund of India (Article 266).
India has THREE types of government funds:
(1) CONSOLIDATED FUND OF INDIA:
- ALL revenues (taxes, duties, fees)
- all loans raised
- all money received in repayment of loans go HERE.
This is the main government account. No money can be spent from it without Parliament's approval.
(2) PUBLIC ACCOUNT:
- Money held by government in TRUST — like provident funds, small savings, judicial deposits.
Government acts as a banker, not owner. Parliament approval NOT needed for withdrawals.
(3) CONTINGENCY FUND:
- A small fund (₹500 crore) at the President's disposal for EMERGENCY unforeseen expenses.
Like a 'petty cash' fund. Parliament must later approve the spending.
Simple analogy:
- Consolidated Fund = your salary account (main income).
- Public Account = money you hold for others (security deposits).
- Contingency Fund = your emergency cash stash.
The Consolidated Fund of India is the government's main account where all tax revenues, loans raised, and loan repayments are deposited, requiring Parliament approval for any expenditure.
UPSC tests the distinction between three constitutional funds - Consolidated Fund (main revenue account), Public Account (trust money), and Contingency Fund (emergency expenses) - to check understanding of financial accountability under Article 266.
Consolidated Fund of India
Indian Polity Consolidated Fund of India all revenues taxes
Consolidated Fund of India: Main Government Treasury
ALL government revenues (taxes, duties, fees) go to Consolidated Fund of India
Established under Article 266 of the Constitution
Parliament's approval required for all withdrawals
Main treasury account — government's primary income source
What Goes In
The Consolidated Fund receives all money that belongs to the government:
All tax revenues (income tax, GST, customs, excise)
All non-tax revenues (fees, penalties, interest receipts)
All loans raised by the government
All loan repayments received by government
Key Features
Parliamentary control: No money can be withdrawn without Parliament's approval through budget or supplementary grants
Custody with RBI: Reserve Bank of India acts as the banker and custodian
Single account principle: All central government money flows through this single account
Constitutional mandate: Article 266(1) makes it mandatory for all revenues to be credited here
Trap: Students confuse with Public Account — but Public Account holds money government holds in trust, not government's own revenue
Trap: Contingency Fund seems like main fund — but it's only ₹500 crore for emergencies, not all revenues
Trap: Some think only tax revenue goes here — but all government receipts including loans go to Consolidated Fund
Three Types of Government Funds
Indian Polity Public Account Contingency Fund
Three Government Funds: Complete Classification
Three funds: Consolidated Fund (main), Public Account (trust), Contingency Fund (emergency)
Parliamentary approval needed only for Consolidated and Contingency Funds
Public Account holds money government doesn't own — acts as banker only
Fund Comparison
Fund Type | Money Source | Parliamentary Approval | Purpose |
|---|---|---|---|
Consolidated Fund | All govt revenues, loans raised | Required | Main government treasury |
Public Account | Money held in trust (PF, deposits) | Not required | Government as banker |
Contingency Fund | ₹500 crore advance | Required later | Emergency expenses |
Public Account Details
Trust money: Provident funds, small savings, court deposits, other people's money
Government as banker: Government holds and manages but doesn't own this money
No parliamentary control: Minister can withdraw without Parliament's prior approval
Article 266(2): Constitutional provision for Public Account
Contingency Fund Details
₹500 crore corpus: Fixed amount available for emergencies
President's disposal: Only President can authorize withdrawals
Unforeseen expenses: Natural disasters, urgent defense needs
Later approval: Parliament must approve the spending retrospectively
Trap: Question asks about 'all revenues' — only Consolidated Fund receives ALL revenues
Trap: Public Account sounds official — but it's trust money, not government's own revenue
Trap: Contingency Fund for emergencies — but the question specifically asks about regular tax revenues