Definition
Contingency Fund of India
The Contingency Fund of India is an imprest account placed at the disposal of the President to meet urgent, unforeseen expenditure pending Parliament's approval.
Created under Article 267, the Contingency Fund of India lets the government respond to emergencies — disasters or sudden needs — without waiting for Parliament to vote the money. Spending is met from this fund first and later recouped from the Consolidated Fund once Parliament approves it.
The fund operates on an imprest basis with a fixed corpus that can be enhanced by law; it was increased substantially in recent years. Because it is replenished after parliamentary authorisation, it bridges the timing gap between an urgent need and the normal budgetary process.
Related terms
- Consolidated Fund of IndiaThe Consolidated Fund of India is the government's main account into which all revenues, loans raised and recoveries flow, and from which most expenditure is drawn only with Parliament's approval.
- Public Account of IndiaThe Public Account of India holds money where the government acts as a banker or trustee, such as provident funds and small savings, which it must eventually repay.
- Appropriation BillThe Appropriation Bill is the law that authorises the government to withdraw money from the Consolidated Fund of India to meet the expenditure approved in the Budget.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.