Definition: Consolidated Fund of India is the most important of all government accounts. Revenues received by the government and expenses made by it, excluding the exceptional items, are part of the Consolidated Fund.
The Consolidated Fund is a term used in India to refer to the funds of the central and state governments that are available for meeting all kinds of expenses. The Consolidated Fund is one of the three types of funds created by the Constitution of India, the other two being the Contingency Fund and the Public Account.
The Consolidated Fund is made up of revenues received by the government through taxes, duties, and other sources. All money received by the government, including loans raised by it, are credited to the Consolidated Fund. The money in the Consolidated Fund is used to meet all the expenses of the government, including salaries of government employees, payments of interest and debt, and other general expenditures.
The Constitution of India provides that no money can be withdrawn from the Consolidated Fund without the authorization of Parliament in the case of the central government, or the state legislature in the case of state governments. All expenses incurred by the government are authorized through appropriations made by Parliament or the state legislature.
The Consolidated Fund of India is maintained by the Reserve Bank of India on behalf of the central government, while the Consolidated Fund of each state is maintained by the State Bank of India on behalf of the respective state government.
Description: This fund was constituted under Article 266 (1) of the Constitution of India. All revenues received by the government by way of direct taxes and indirect taxes, money borrowed and receipts from loans given by the government flow into the Consolidated Fund of India.
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 Importantly, no money can be withdrawn from this fund without the Parliament’s approval.
In summary, the Consolidated Fund is a key component of the financial system of India, as it is the primary source of funding for all kinds of expenses incurred by the central and state governments. The money in the Consolidated Fund is used to meet all the expenses of the government, and no money can be withdrawn from it without the authorization of Parliament or the state legislature
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