What is the Consolidated Fund of India?
The Consolidated Fund of India (CFI) is the principal government account established under Article 266 of the Indian Constitution. This fund comprises all revenues received by the government through direct taxes, indirect taxes, profits from public sector undertakings (PSUs), and other sources. It is the most significant account of the Indian government, utilised for all routine expenditures, except for specific cases covered by the Contingency Fund or Public Account.
How Does the Consolidated Fund of India Work?
The Consolidated Fund of India is a place where all revenues and expenditures collected by the government are deposited. It is utilized for:
- Running Expenditures: Salary bills, construction, and other schemes.
- Repayment of Debts: Paying off government debts.
- Investment: Funding any scheme or undertaking undertaken by the government.
Withdrawal from the consolidated fund requires parliamentary approval and therefore keeps a check on what is spent in the public kitty.
Sources of the Consolidated Fund of India
The fund accumulates money from a variety of sources, such as:
- Direct Taxes: Income tax, corporate tax, capital gains tax, estate tax, etc.
- Indirect Taxes: GST, customs duties, excise duties, etc.
- Profits from PSUs: Dividends and earnings from companies like NTPC, ONGC, and SAIL.
- Disinvestment Proceeds: Revenue generated from selling stakes in government enterprises.
- Debt Repayments: Principal and interest payments recovered from loans given by the government.
- Other Receipts: Charges from general services or miscellaneous activities.
Expenditures Charged on the Consolidated Fund
Certain expenses are non-votable, meaning they are automatically approved and must be paid, regardless of whether the budget is passed. These include:
- Salaries and Allowances:
- The President of India.
- Speaker and Deputy Speaker of the Lok Sabha.
- Chairman and Deputy Chairman of the Rajya Sabha.
- Judges of the Supreme Court and High Courts.
- Pensions: For retired Supreme Court and High Court judges.
Advantages of the Consolidated Fund of India
- Transparency: The funds are utilized properly with parliamentary scrutiny.
- Accountability: All expenditure requires parliamentary sanction and hence good governance.
- Efficiency in Public Spending: Consolidation of revenue and expenditure helps in proper financial management.
- Safeguard Against Misuse: Non-votable expenditures ensure that the essential constitutional obligations are always met.
Key Takeaways
Recent highlights include:
- Social Sector Spending to Increase: The government is to provide more funds for welfare schemes.
- GST Collection Milestones: The revenue increases contribution to the Consolidated Fund.
- Disinvestment Drive: Ongoing efforts to boost revenues through stake sales in public enterprises.
