SSC
The government account that holds funds for transactions in which the government acts only as a banker, such as provident funds and deposits, is the:
Answer (Detailed Solution Below)View answer ▾Hide ▴
Answer: Option B — Public Account of India
Detailed Solution
Under Article 266(2), all other public money received by or on behalf of the Government of India, other than that credited to the Consolidated Fund, is credited to the Public Account of India.
Nature of the Public Account:
- It includes money that the government holds in trust, where it acts like a banker.
- The money does not belong to the government; it has to be paid back to the depositors.
Examples of items in the Public Account:
- Provident funds of government employees.
- Small savings collections, such as the National Small Savings Fund.
- Judicial deposits and other deposits.
- Departmental deposits and remittances.
- Reserve funds for specific purposes.
Parliamentary approval:
- Payments from the Public Account do not require appropriation by Parliament, because the money belongs to others.
- They are made by executive action.
The Consolidated Fund of India (Article 266(1)):
- All revenues received by the government, loans raised by it, and money received in repayment of loans form the Consolidated Fund.
- No money can be withdrawn from it without a law passed by Parliament (an appropriation).
- Some expenditure, such as the salaries of the President and judges, is charged on the Consolidated Fund and is not voted.
The Contingency Fund of India (Article 267):
- It is placed at the disposal of the President to meet unforeseen expenditure, pending authorisation by Parliament.
- It is held by the Finance Secretary on behalf of the President.
- Its size was raised to 30,000 crore rupees in 2021.
State-level funds:
Each state has its own Consolidated Fund, Public Account and Contingency Fund.
Audit:
All three funds are audited by the national audit authority.
Why not the other options?
- ✗The Consolidated Fund holds the government's own revenues and loans.
- ✗The Contingency Fund is for emergencies.
- ✗The National Investment Fund was created for disinvestment proceeds.
Quick tip
Remember: Government as banker (provident funds, deposits) = Public Account (Article 266(2)); no parliamentary appropriation needed.
💬 Discussions on this question
Ask a doubt ›Still stuck on this question? Ask our faculty and fellow students — answers appear here.
Ask a doubtMore Budget, Fiscal Policy & Taxation Questions
View all ›- Q1.The Fiscal Responsibility and Budget Management (FRBM) Act was passed by Parliament in:
- Q2.Gross fiscal deficit minus net interest payments is equal to:
- Q3.The Goods and Services Tax (GST) is a/an:
- Q4.In which year was the Railway Budget merged with the Union Budget?
- Q5.In which type of tax is the marginal tax rate higher than the average tax rate?
More General Knowledge Questions
- Q1.The techniques of Rasa and Bhava used in Indian classical dance trace their origin to which ancient text?Indian Dance Forms
- Q2.Lavani, Powada, Koli, Waghya Murali and Dhangari Gaja are folk dances of which state?Indian Dance Forms
- Q3.The one-act play associated with the Sattriya tradition of Assam is called:Indian Dance Forms
- Q4.Which dance form of Goa is known as the 'Warrior Dance'?Indian Dance Forms
- Q5.Manipuri dance is based on the Rasleela themes of:Indian Dance Forms
Budget, Fiscal Policy & Taxation — Preparation
This question tests your understanding of Budget, Fiscal Policy & Taxation, 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 Union Budget and fiscal policy: revenue and capital budgets, types of deficits (fiscal, revenue and primary), the FRBM Act, direct and indirect taxes, the Goods and Services Tax (GST) and the GST Council, and the role of the Finance Commission. Common questions ask how each deficit is defined, which article covers the annual financial statement (Article 112), which taxes GST replaced, and the difference between direct and indirect taxes. GST was introduced on 1 July 2017 through the 101st Constitutional Amendment. Budget figures change every year, so check recent numbers in current affairs. Practise the budget, fiscal policy and taxation 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.