Para 18.3.11 — The Contingency Fund of India, established under A
Original Rule Text
18.3.11 Advance from Contingency Fund of India 18.3.11.1 Article 267 of Indian Constitution stipulates “Parliament may by law establish a Contingency Fund in the nature of an imprest to be entitled the Contingency Fund of India into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the President to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorization of such expenditure by Parliament by law under article 115 or article 116”. Government of India through Finance Act, 2021 increased the corpus of Contingency Fund of India from ₹ 500 crore to ₹ 30,000 crore.
18.3.11.2 In view of the increased corpus of Contingency Fund, additionality sought by the line Ministries/Departments, if any, are preferred to be allocated from the Contingency Fund instead of authorising excess expenditure in terms of Rules 61 and 69 of GFR 2017 (APPENDIX-10).
18.3.11.3 Proposals for advance from Contingency Fund of India shall be sent to Budget Division, Ministry of Finance in the prescribed format of the GFR,2017 giving appropriate reasons for immediate requirement of funds, and why Ministry/Department cannot wait till SDG through the Parliament.
18.3.11.4 After Contingency Advance is taken and funds are expended, care should be taken to obtain requisite appropriations from Parliament to recoup the advance and that the necessary Transfer Entry (TE) is made for final expenditure booking.
18.3.12 Excess Expenditure under APPENDIX-10 of GFR 2017 18.3.12.1 Since most of Central Government expenditure is effected through PFMS, a check to ensure that individual Ministries/Departments are within the ceilings of Demand for Grants, and payments are made from the budget line authorised by the legislature is inbuilt. However, any overriding of the budgetary ceilings in the system, should be done only with appropriate approvals.
18.3.12.2 Whenever Excess Expenditure under APPENDIX-10 of GFR, 2017 is granted by Budget Division, Ministry of Finance, Head of Accounting Organization i.e. Pr.CCAs/CCAs/CAs (i/c) as the case may be, should authorise the Pay and Accounts Offices to override the budgetary provisions in the PFMS under a particular head of accounts and incur excess expenditure, over and above the budgetary provisions. However, in such instances, Budget section should ensure that the additional budget is projected under the intended budget head and the same is provisioned through supplementary demands and/or re-appropriation of funds, before the close of the financial year.
What This Means
The Contingency Fund of India, established under Article 267 of the Constitution, allows the President to make advances for unforeseen expenditure before Parliament authorizes it. The corpus was increased from Rs 500 crore to Rs 30,000 crore through the Finance Act, 2021. With this enlarged corpus, additional funding requests are now preferred from the Contingency Fund instead of authorizing excess expenditure under GFR Rules 61 and 69. After the advance is used, Parliament must be approached for appropriations to recoup the fund, and a Transfer Entry must be made for final expenditure booking.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Contingency Fund corpus increased from Rs 500 crore to Rs 30,000 crore via Finance Act, 2021
- 2Used for unforeseen expenditure pending Parliament's authorization — functions like an imprest
- 3After spending, Parliament's approval must be obtained through Supplementary Demands to recoup the advance
- 4Transfer Entry (TE) required for final expenditure booking after appropriation is obtained
- 5PFMS has built-in budgetary ceiling checks; overriding requires appropriate approvals
Practical Example
A sudden flood disaster requires Rs 200 crore in emergency relief. The Ministry of Home Affairs cannot wait for the next Parliament session. They submit a proposal to Budget Division with justification for Contingency Fund advance. The President sanctions Rs 200 crore from the Contingency Fund. The Ministry spends it on relief operations. In the next session, a Supplementary Demand is presented to Parliament for Rs 200 crore. Once approved, a Transfer Entry recoupes the Contingency Fund and books the expenditure under the disaster relief head.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
Why was the Contingency Fund corpus increased so significantly?▼
What is the difference between Contingency Fund advance and excess expenditure under GFR?▼
Can PAOs override PFMS budgetary ceilings?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.