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The Contingency Fund of India, placed at the disposal of the President to meet unforeseen expenditure, is established by Parliament by law under:
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Answer: Option C — Article 267
Detailed Solution
Article 267 empowers Parliament to establish by law a Contingency Fund of India, in the nature of an imprest, into which such sums as may be determined by law shall be paid from time to time.
Purpose of the Contingency Fund:
- It is placed at the disposal of the President, to enable advances to be made out of it for meeting unforeseen expenditure, pending its authorisation by Parliament.
- For example, it can be used for emergency relief during natural disasters, or for urgent expenditure that was not provided for in the budget.
How it works:
- The Contingency Fund of India Act, 1950, was passed by Parliament under Article 267.
- The fund is held by the Finance Secretary (Department of Economic Affairs) on behalf of the President.
- Advances made from the fund must later be approved by Parliament, through a supplementary or additional grant, and the amount is then recouped (paid back) to the fund from the Consolidated Fund.
- The size (corpus) of the fund has been increased from time to time by Parliament.
Contingency Funds of the States:
Article 267(2) allows each state legislature to establish a Contingency Fund of the State, placed at the disposal of the Governor.
The three funds of the government:
- The Consolidated Fund: the main fund, from which most expenditure is made, with the approval of the legislature.
- The Contingency Fund: a small fund for unforeseen expenditure, at the disposal of the President or the Governor.
- The Public Account: money held by the government as a trustee, such as provident fund deposits and small savings.
Related provisions:
- Article 112: The Annual Financial Statement (budget) shall be laid before both Houses of Parliament every year.
- Article 114: The Appropriation Bill.
Why not the other options?
- ✗Article 266 deals with the Consolidated Fund and the Public Account; Article 112 with the annual budget; Article 114 with the Appropriation Bill.
Quick tip
Remember: Article 267 = Contingency Fund of India (at the disposal of the President; for unforeseen expenditure; Contingency Fund of India Act, 1950).
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Important Articles & Schedules — Preparation
This question tests your understanding of Important Articles & Schedules, a key topic in the General Knowledge section. The detailed solution above uses a step-by-step approach to show the reasoning, and where available, a shortcut that helps you solve similar questions in under 90 seconds during the actual exam.
This topic covers the important articles of the Constitution that exams test most often, the parts of the Constitution, and the twelve schedules, such as the Seventh Schedule (Union, State and Concurrent Lists), the Eighth Schedule (languages) and the Tenth Schedule (anti-defection law). Questions directly ask which article or schedule deals with a subject, so make a table and revise it often. High-frequency examples include Article 112 (annual financial statement), Article 280 (Finance Commission), Article 324 (Election Commission) and Article 368 (amendment procedure). Remember that the Ninth Schedule was added by the 1st Amendment in 1951. Practise the important articles and schedules questions below, written in the style of the general awareness sections of exams such as SSC, banking, railways, CUET GAT, MAH CET and CLAT. Each question comes with a detailed explanation that adds related facts, so every question helps you revise more than one point.