Definition
Public Account of India
The 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.
Under Article 266, transactions where the government merely holds money on behalf of others flow through the Public Account rather than the Consolidated Fund. This includes provident funds, small savings collections, reserve funds and deposits — amounts that do not belong to the government and must be returned.
Because Parliament's spending approval is not needed for these flows, the Public Account gives the government access to a pool of funds it can temporarily use. Small savings collected here, for instance, can be lent to the Centre and states, linking household savings to government financing.
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.
- Contingency Fund of IndiaThe Contingency Fund of India is an imprest account placed at the disposal of the President to meet urgent, unforeseen expenditure pending Parliament's approval.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.