Among the several government accounts, the Consolidated Fund of India is the most crucial. Constituted under Article 266(1) of the Indian Constitution, the Consolidated Fund of India is the account of the revenue the Government of India receives — via income tax, Customs, central excise and the non-tax revenue — and the expenses it makes, excluding exceptional items.
Any money raised by the government, including loans through public notifications, treasury bills, and borrowings from foreign governments or international institutions, is always credited to this fund. Likewise, whatever money the Indian government spends — government expenditure — is incurred from this account. The government cannot withdraw any fund from this account without the approval of Parliament. Essentially, a sum of Rs 500 crore from Consolidated fund of India is transferred to the Contingency Fund of India for dealing with any emergency situation. However, if the contingency fund is not used by the government in a given financial year, there is no requirement to add more to it.
Disbursement charged on Consolidated Fund of India
Payment of interests, loans and advances to state governments, internal debt of the central government, and grants-in-aid to state governments account for the bulk of expenditure.
Read full Consolidated Fund of India documentof Budget 2020-2021