As the name suggests, the Contingency Fund of India is an account maintained for meeting expenses during any unforeseen emergencies. Established under Article 267(1) of the Indian Constitution, the fund is maintained by the ministry of finance on behalf of the President of India.
Like the Consolidated Fund of India, the Contingency Fund of India constitutes a part of the annual financial statement. Public Account of India forms the remaining part of the annual document. At present, the Contingency Fund of India has Rs 8,000 crore in its account.
The Constitution of India states: “Parliament may by law establish a contingency fund in the nature of an imprest to be entitled the Contingency Fund of India into which shall be paid from time to time such sums as may be determined by such law, and the said the fund shall be placed at the disposal of the President to enable advances to be made by him out of such fund for the purposes of meeting unforeseen expenditure pending authorisation of such expenditure by the Parliament by law under Article 115 or Article 116.”
Thus, the government, on behalf of the President, would require the permission of the Parliament in order to utilise the fund. Moreover, the corpus is enhanced from time to time by the Parliament. In order to keep the corpus intact in the Contingency Fund of India, the government seeks approval of the Parliament for withdrawing an equal amount of money from the Consolidated Fund of India.
Under Article 267(2) of the Constitution, each state in the country has its own contingency fund, which works on the same principles as the Central contingency fund. The quantum, however, varies from state to state and is decided by the state legislature.
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Updated Date: Jun 17, 2019 11:19:32 IST