UPSC CSE Prelims 2004
Which of the statements given above are correct?
Statements 2 and 3 are correct.
Statement 2: The Indian Constitution, under Article 266(1), mandates the establishment of a Consolidated Fund for both the Union and each State. Similarly, Article 266(2) provides for a Public Account for the Union and each State. Furthermore, Article 267 empowers Parliament to establish a Contingency Fund of India, and state legislatures to establish Contingency Funds for their respective states. Therefore, the Constitution provides for all three types of funds at both the Union and State levels.
Statement 3: All appropriations and disbursements of public funds in India are subject to parliamentary control. This principle applies uniformly across all government expenditures. Even during the period when a separate Railway Budget was presented (prior to 2017), its appropriations and disbursements required the same form of parliamentary approval, including demands for grants and the passage of appropriation bills, as other government expenditures. The merger of the Railway Budget with the General Budget in 2017 did not alter the fundamental form of parliamentary control over these financial matters.
Statement 1: Disbursements from the Public Account of India are not subject to the Vote of the Parliament. Article 266(2) of the Constitution defines the Public Account as comprising all other public money received by or on behalf of the Government of India, such as provident fund deposits, small savings, and other deposits. These funds are held by the government in a trust capacity and do not constitute government revenue. Consequently, withdrawals from the Public Account do not require parliamentary appropriation or a vote, unlike disbursements from the Consolidated Fund of India.