Consider the following statements regarding Procedure for increasing the corpus through legislative amendment:
1. Legislative approval for increasing the corpus of the Contingency Fund is granted through a Money Bill introduced in the Rajya Sabha, reflecting the upper house's role in financial oversight.
2. The Contingency Fund of India is governed by the rules framed under Article 283, which allows the Cabinet Committee on Economic Affairs to authorize corpus increases without further parliamentary debate.
3. The Secretary to the Government of India in the Ministry of Finance, Department of Economic Affairs, holds the Contingency Fund of India on behalf of the President.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because, under the Contingency Fund of India Act, 1950, the fund is placed at the disposal of the President and is held on their behalf by the Secretary to the Ministry of Finance. Statement 1 is incorrect because any legislative amendment to increase the corpus must be passed by Parliament as a whole, and Money Bills can only be introduced in the Lok Sabha, not the Rajya Sabha. Statement 2 is incorrect because the corpus can only be increased through an Act of Parliament, and the Cabinet Committee on Economic Affairs lacks the constitutional authority to bypass parliamentary approval for such financial adjustments.
Consider the following statements regarding Legislative competence of Parliament versus State Legislatures:
1. Article 267(1) of the Constitution empowers the Parliament to establish a Contingency Fund of India by law, with the corpus currently fixed at 30,000 crore rupees.
2. The Contingency Fund of India is placed at the disposal of the President, who authorizes advances for meeting unforeseen expenditure pending authorization by the Parliament.
3. The Contingency Fund of India operates under the direct oversight of the Comptroller and Auditor General, who authorizes the withdrawal of funds before the presentation of the annual budget.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as Article 267(1) empowers Parliament to establish the fund, and the Finance Act, 2021 increased its corpus to âš30,000 crore. Statement 2 is correct because the fund is held by the President to enable the government to meet urgent, unforeseen expenditures pending parliamentary approval. Statement 3 is incorrect because the fund is placed at the disposal of the President, not the Comptroller and Auditor General, and withdrawals are authorized by the Secretary of the Ministry of Finance on behalf of the President, not the CAG.
Consider the following statements regarding Auditing role of the Comptroller and Auditor General (CAG):
1. The initial corpus of the Contingency Fund of India was set at Rs 15 crore by the Contingency Fund of India Act, 1950, before being increased by subsequent legislative amendments.
2. Advances from the Contingency Fund are recouped to the fund through a supplementary grant presented to Parliament under Article 115 of the Constitution.
3. The Comptroller and Auditor General of India conducts a post-expenditure audit of the Contingency Fund to ensure that the money was spent for the purpose for which the advance was granted.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the Contingency Fund of India Act, 1950, initially set the corpus at Rs 15 crore, which has been periodically increased by Parliament to the current Rs 30,000 crore. Statement 2 is correct because once an advance is made from the fund to meet unforeseen expenditure, it must be recouped by obtaining parliamentary authorization through a supplementary or excess grant under Article 115. Statement 3 is correct because, although the CAG does not authorize withdrawals from the fund, they perform a post-expenditure audit to verify that the funds were utilized strictly for the specific purposes for which the advances were sanctioned.
Consider the following statements regarding Nature of the fund as an imprest account:
1. The Contingency Fund is classified as a part of the Consolidated Fund of India, and any increase in its corpus is authorized through a Money Bill introduced in the Rajya Sabha.
2. Withdrawals from the Contingency Fund are recorded in the Annual Financial Statement, and these expenditures are subject to a post-facto audit by the Public Accounts Committee before the next fiscal year.
3. The Contingency Fund of India, established under Article 267(1) of the Constitution, operates as an imprest account placed at the disposal of the President to meet unforeseen expenditure pending authorization by Parliament.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because the Contingency Fund, established under Article 267(1), functions as an imprest account enabling the President to authorize urgent, unforeseen expenditures before parliamentary approval. Statement 1 is incorrect because the fund is distinct from the Consolidated Fund of India, and its corpus is determined by Parliament via law, not a Money Bill in the Rajya Sabha. Statement 2 is incorrect because while expenditures from the fund are later recouped from the Consolidated Fund after parliamentary authorization, they are not recorded in the Annual Financial Statement as initial withdrawals, nor is there a requirement for a post-facto audit by the Public Accounts Committee specifically for these withdrawals.
Consider the following statements regarding Role of the President in authorizing advances:
1. The Secretary to the Government of India in the Ministry of Finance, Department of Economic Affairs, holds the Contingency Fund on behalf of the President.
2. The corpus of the Contingency Fund of India was increased from Rs 50 crore to Rs 500 crore through the Finance Act, 2005.
3. Advances from the Contingency Fund are made for the purposes of meeting unforeseen expenditure pending authorization of such expenditure by Parliament under Article 115 or 116.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the Contingency Fund is placed at the disposal of the President, who authorizes advances through the Secretary of the Department of Economic Affairs. Statement 2 is correct because the Finance Act, 2005, amended the Contingency Fund of India Act, 1950, to raise the corpus from Rs 50 crore to Rs 500 crore (further increased to Rs 30,000 crore in 2021). Statement 3 is correct as the fund is designed for unforeseen expenditures that cannot wait for the lengthy parliamentary process of passing supplementary or excess grants under Articles 115 and 116.
Consider the following statements regarding Role of the Contingency Fund in maintaining fiscal discipline:
1. The corpus of the Contingency Fund was increased from âš500 crore to âš30,000 crore through the Finance Act of 2021 to manage unforeseen expenditure.
2. Advances from the Contingency Fund are recouped to the fund by a subsequent authorization from Parliament through a supplementary or excess grant.
3. State governments utilize the Contingency Fund of India for disaster management operations, and these expenditures are reimbursed through the National Disaster Response Fund within the same financial year.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as the Finance Act, 2021 increased the corpus of the Contingency Fund of India from âš500 crore to âš30,000 crore to provide the government with greater flexibility for unforeseen expenditures. Statement 2 is correct because, under Article 267, advances made from the fund must be recouped by transferring an equivalent amount from the Consolidated Fund of India following parliamentary authorization via supplementary or excess grants. Statement 3 is incorrect because state governments operate their own separate Contingency Funds under Article 267(2), and the Contingency Fund of India is exclusively at the disposal of the President for central government exigencies.
Consider the following statements regarding Distinction between Contingency Fund and Consolidated Fund of India:
1. Parliamentary approval for withdrawals from the Consolidated Fund of India is governed by the Public Accounts Committee, which reviews the estimates before the presentation of the Union Budget.
2. The Contingency Fund of India Act, 1950, provides for the transfer of surplus funds from the Reserve Bank of India to the corpus, which currently stands at 500 crore rupees.
3. The Consolidated Fund of India includes all public moneys received by or on behalf of the Government of India, and its corpus is periodically adjusted by the Finance Commission under Article 280.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because withdrawals from the Consolidated Fund of India require authorization by Parliament through an Appropriation Act, not the Public Accounts Committee. Statement 2 is incorrect as the Contingency Fund corpus is fixed by Parliament via law (currently Rs. 30,000 crore) and is not funded by RBI surplus transfers. Statement 3 is incorrect because the Finance Commission has no role in adjusting the corpus of the Contingency Fund, which is established under Article 267, and the Consolidated Fund is defined by Article 266.
Consider the following statements regarding Mechanism for charging expenditure to the Consolidated Fund after authorization:
1. The Contingency Fund of India is established under Article 267(1) of the Constitution and is placed at the disposal of the President to enable advances for meeting unforeseen expenditure.
2. When an advance is made from the Contingency Fund, a corresponding amount is authorized by Parliament through a supplementary or excess grant to recoup the fund to its original corpus.
3. The Public Account of India acts as the primary source for the Contingency Fund, and withdrawals from this account are regulated by the Comptroller and Auditor General under Article 149.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as Article 267(1) empowers Parliament to establish the Contingency Fund of India, which is placed at the President's disposal for unforeseen expenditures pending legislative authorization. Statement 2 is correct because once an advance is made, the equivalent amount must be recouped by obtaining parliamentary approval through supplementary or excess grants, effectively transferring funds from the Consolidated Fund of India to the Contingency Fund. Statement 3 is incorrect because the Contingency Fund is an imprest fund maintained by the Secretary to the Government of India in the Ministry of Finance, not the Public Account, and its withdrawals are not regulated by the CAG under Article 149.
Consider the following statements regarding Legal status of the fund as an entity separate from the Consolidated Fund:
1. The Contingency Fund of India is established under Article 267(1) of the Constitution and functions as an imprest placed at the disposal of the President.
2. Advances from the Contingency Fund are recouped to the corpus through a supplementary grant presented in Parliament under Article 115 of the Constitution.
3. The Contingency Fund is maintained by the Reserve Bank of India under the 1934 Act, which allows the Finance Secretary to authorize withdrawals for unforeseen expenditures.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as Article 267(1) empowers Parliament to establish the Contingency Fund of India, which acts as an imprest for the President to meet unforeseen expenditures. Statement 2 is correct because once an advance is made, it must be recouped by transferring an equivalent amount from the Consolidated Fund of India, authorized through supplementary grants under Article 115. Statement 3 is incorrect because the fund is held by the Finance Secretary on behalf of the President, not the RBI, and it is governed by the Contingency Fund of India Act, 1950, rather than the RBI Act, 1934.
Consider the following statements regarding Comparison with the Contingency Fund of States under Article 267(2):
1. The audit of the Contingency Fund of States is conducted by the Comptroller and Auditor General of India, and the reports are submitted to the Union Finance Ministry for review.
2. Article 267(2) allows the State Legislature to delegate the power of withdrawal to the Chief Minister, provided the expenditure is ratified in the subsequent session of the Assembly.
3. Under the provisions of the Contingency Fund of India Act 1950, the Secretary of the Ministry of Finance holds the authority to authorize withdrawals for emergency relief operations.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the audit of State Contingency Funds is submitted to the State Legislature, not the Union Finance Ministry. Statement 2 is incorrect as Article 267(2) empowers the Governor to make advances from the fund, not the Chief Minister, and such withdrawals must be authorized by law made by the State Legislature. Statement 3 is incorrect because, under the Contingency Fund of India Act, 1950, the power to authorize withdrawals is vested in the President (exercised by the Secretary to the Government of India, Ministry of Finance, on behalf of the President), but it is not restricted solely to emergency relief operations; it covers any unforeseen expenditure pending parliamentary authorization.
Consider the following statements regarding Legislative competence of Parliament versus State Legislatures:
1. The Contingency Fund Act of 1950 was enacted to provide for the initial corpus of the Contingency Fund of India, which was originally set at 15 crore rupees.
2. Advances from the Contingency Fund of India are recorded in the Public Account, and the subsequent recoupment of these funds follows the procedure outlined in the Finance Act of 1992.
3. The Governor of a state maintains the Contingency Fund of the State as a personal discretionary account, which allows for the funding of local disaster relief projects without legislative approval.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is correct as the Contingency Fund of India Act, 1950, established the fund with an initial corpus of Rs 15 crore. Statement 2 is incorrect because advances from the Contingency Fund are recouped by transferring funds from the Consolidated Fund of India through a supplementary grant process, not via the Finance Act of 1992. Statement 3 is incorrect because the Contingency Fund of a State is placed at the disposal of the Governor, but it is operated by the Finance Secretary on behalf of the Governor and requires subsequent legislative approval for any expenditure incurred.
Consider the following statements regarding Parliamentary oversight on the utilization of advanced funds:
1. Advances from the Contingency Fund are made to meet unforeseen expenditure pending authorization of such expenditure by Parliament under Article 115 or 116.
2. The Secretary to the Government of India in the Ministry of Finance, Department of Economic Affairs, holds the Contingency Fund on behalf of the President.
3. The corpus of the Contingency Fund of India was increased from Rs 50 crore to Rs 30,000 crore through the Finance Act, 2021.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the Contingency Fund acts as an imprest placed at the President's disposal to meet urgent, unforeseen expenditures until Parliament authorizes them via supplementary or excess grants under Articles 115 and 116. Statement 2 is correct because the Fund is held by the Secretary of the Ministry of Finance (Department of Economic Affairs) on behalf of the President, as per the Contingency Fund of India Act, 1950. Statement 3 is correct because the Finance Act, 2021, significantly raised the corpus of the Fund from Rs 500 crore (not Rs 50 crore) to Rs 30,000 crore to enhance fiscal flexibility.
Consider the following statements regarding Executive power to withdraw funds without prior parliamentary approval:
1. The Finance Act of 2021 further raised the corpus of the Contingency Fund of India from Rs 500 crore to Rs 30,000 crore.
2. The Public Accounts Committee oversees the periodic audit of the Contingency Fund of India and possesses the legal authority to block presidential advances before they are disbursed.
3. Parliamentary approval for the recoupment of the Contingency Fund is sought through the submission of Supplementary Demands for Grants.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as the Finance Act, 2021, increased the Contingency Fund of India's corpus from Rs 500 crore to Rs 30,000 crore to meet unforeseen expenditures. Statement 3 is correct because, under Article 267, advances made from the fund must be recouped by transferring an equivalent amount from the Consolidated Fund of India, which requires parliamentary authorization via Supplementary Demands for Grants. Statement 2 is incorrect because the Contingency Fund is placed at the disposal of the President, and the Public Accounts Committee has no legal authority to block presidential advances; it only audits the expenditure after it has been incurred.
Consider the following statements regarding Comparison with the Contingency Fund of States under Article 267(2):
1. Advances from the Contingency Fund of India are placed at the disposal of the President to meet unforeseen expenditure pending authorization by the Parliament.
2. The corpus of the Contingency Fund of India was increased from Rs. 50 crore to Rs. 500 crore by the Finance Act of 2005.
3. The Contingency Fund of India maintains a corpus of Rs. 30,000 crore as per the revised guidelines issued by the Reserve Bank of India in the 2021 fiscal circular.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as Article 267(1) empowers the President to make advances from the Contingency Fund of India for unforeseen expenditure pending parliamentary approval. Statement 2 is correct because the Finance Act, 2005, increased the corpus of the fund from Rs. 50 crore to Rs. 500 crore. Statement 3 is incorrect because the corpus was increased to Rs. 30,000 crore by the Finance Act, 2021, not by a Reserve Bank of India circular.
Consider the following statements regarding Nature of the fund as an imprest account:
1. The Contingency Fund functions as a revolving fund, and its total corpus is equivalent to five percent of the annual budgetary allocation for capital expenditure as determined by the Union Budget.
2. The President of India exercises discretionary power over the Contingency Fund, allowing for the withdrawal of funds for state-level disasters without seeking the approval of the respective State Governor.
3. Under the provisions of the Contingency Fund of India Act, 1950, the fund is managed by the Ministry of Finance, and interest earned on the balance is credited to the Consolidated Fund of India.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the corpus of the Contingency Fund of India is determined by Parliament through law (currently Rs. 30,000 crore), not by a percentage of capital expenditure. Statement 2 is incorrect as the fund is placed at the disposal of the President, but it is operated by the Finance Secretary on behalf of the President, and it cannot be used for state-level disasters as states maintain their own separate Contingency Funds. Statement 3 is incorrect because, while the fund is managed by the Ministry of Finance, it is an imprest account held by the President to meet unforeseen expenditure; it does not generate interest, and the fund itself is replenished by the Consolidated Fund of India after parliamentary approval.
Consider the following statements regarding Distinction between Contingency Fund and Consolidated Fund of India:
1. The Contingency Fund of India is established under Article 267(1) of the Constitution, functioning as an imprest placed at the disposal of the President.
2. The Consolidated Fund of India is established under Article 266(1) of the Constitution, encompassing all revenues received by the Government of India.
3. Expenditure from the Consolidated Fund of India is subject to prior authorization by Parliament through the passage of Appropriation Acts.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
The Contingency Fund (Article 267) acts as an imprest for unforeseen expenditures, while the Consolidated Fund (Article 266) is the primary repository for all government revenues and borrowings. All three statements are correct because the Contingency Fund is placed at the President's disposal to meet urgent needs pending parliamentary approval, whereas the Consolidated Fund requires strict prior authorization through Appropriation Acts before any withdrawal can be made.
Consider the following statements regarding Constitutional basis under Article 267(1):
1. The corpus of the Contingency Fund of India was increased from Rs 50 crore to Rs 30,000 crore through the Finance Act of 2021.
2. The Contingency Fund of India is placed at the disposal of the President of India to enable advances for meeting urgent unforeseen expenditure.
3. The Contingency Fund of India is established by the Parliament under Article 267(1) of the Constitution to meet unforeseen expenditure.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the Finance Act, 2021 increased the corpus from Rs 500 crore (not Rs 50 crore) to Rs 30,000 crore, though the initial corpus at inception in 1950 was Rs 15 crore. Statement 2 is correct because the fund is held by the Finance Secretary on behalf of the President, allowing for advances to meet urgent unforeseen expenditure pending parliamentary authorization. Statement 3 is correct as Article 267(1) empowers the Parliament to establish the Contingency Fund of India, which functions as an imprest account for the Executive.
Consider the following statements regarding Role of the Finance Secretary in managing the fund:
1. The corpus of the Contingency Fund of India was increased from Rs 500 crore to Rs 30,000 crore through the Finance Act of 2021.
2. The Contingency Fund of India is governed by the Reserve Bank of India Act of 1934, which allows the Finance Secretary to transfer surplus liquidity from the fund into the national exchequer.
3. The Consolidated Fund of India and the Contingency Fund of India are both audited by the Public Accounts Committee, which submits its annual findings to the Finance Secretary by 31 March.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is correct as the Finance Act, 2021 increased the corpus of the Contingency Fund of India from Rs 500 crore to Rs 30,000 crore to meet unforeseen expenditures. Statement 2 is incorrect because the fund is established under Article 267(1) of the Constitution and is held by the Finance Secretary on behalf of the President, not governed by the RBI Act. Statement 3 is incorrect because these funds are audited by the Comptroller and Auditor General (CAG) of India, and the Public Accounts Committee examines the audit reports, not the Finance Secretary.
Consider the following statements regarding Constitutional limits on the corpus of the fund:
1. Once the Parliament authorizes the expenditure through a supplementary or excess grant, the amount advanced from the Contingency Fund of India is recouped to the fund.
2. The Contingency Fund of India Act, 1950, provides that the fund shall be placed at the disposal of the President to enable advances to be made.
3. The audit of the Contingency Fund of India is conducted by the Comptroller and Auditor General of India as part of the accounts of the Union government.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct because the Contingency Fund acts as an imprest, requiring subsequent parliamentary approval and recoupment to restore the corpus. Statement 2 is correct as the Contingency Fund of India Act, 1950, enacted under Article 267(1), mandates that the fund remains at the disposal of the President for unforeseen expenditures. Statement 3 is correct because the Comptroller and Auditor General (CAG) audits all expenditures from the Contingency Fund under Article 151, ensuring transparency in the Union government's accounts.
Consider the following statements regarding Nature of the fund as an imprest account:
1. The Contingency Fund of India is maintained by the Reserve Bank of India under the Public Account, and its corpus is periodically adjusted based on the recommendations of the Finance Commission.
2. The corpus of the Contingency Fund was initially set at 50 crore rupees by the Contingency Fund of India Act, 1950, and it remains under the direct oversight of the Comptroller and Auditor General.
3. Advances from the Contingency Fund are authorized by the Union Cabinet, and these funds are subsequently recouped through a Supplementary Grant presented during the Winter Session of Parliament.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
The Contingency Fund of India is placed at the disposal of the President and is held by the Finance Secretary on their behalf, not the RBI, and it operates independently of the Finance Commission. While the initial corpus was 50 crore rupees under the 1950 Act, it is currently governed by the executive (Finance Secretary) rather than the CAG, who only audits the expenditure post-facto. Furthermore, advances are authorized by the Finance Secretary on behalf of the President to meet unforeseen expenditure, and these are recouped by Parliament through supplementary, additional, or excess grants in the next session, not specifically the Winter Session.
Consider the following statements regarding Legal constraints on the usage of the fund for non-emergency purposes:
1. The Contingency Fund of India (Amendment) Act, 2005, introduced a mechanism to transfer a portion of the surplus from the Consolidated Fund to the Contingency Fund.
2. Expenditure incurred from the Contingency Fund is recouped to the fund by withdrawing an equivalent amount from the Consolidated Fund of India after parliamentary approval.
3. The Secretary of the Department of Economic Affairs operates the Contingency Fund of India on behalf of the President.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the 2005 amendment increased the corpus and allowed for periodic transfers from the Consolidated Fund to maintain the statutory limit of âš500 crore. Statement 2 is correct because, per Article 267(1), any advance taken from the Contingency Fund must be recouped by the Consolidated Fund following authorization by Parliament through a supplementary grant. Statement 3 is correct as the Contingency Fund is placed at the disposal of the President, who has authorized the Secretary of the Department of Economic Affairs, Ministry of Finance, to operate it on their behalf.
Consider the following statements regarding Comparison with the Contingency Fund of States under Article 267(2):
1. Article 267(1) of the Constitution empowers the Parliament to establish the Contingency Fund of India with a corpus determined by law.
2. The Contingency Fund of States is administered by the Governor under Article 267(2), and its initial corpus was fixed at Rs. 50 crore by the Seventh Amendment Act of 1956.
3. The Contingency Fund of States is established under Article 267(2) by the respective State Legislatures through appropriate legislative enactments.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as Article 267(1) empowers Parliament to establish the Contingency Fund of India by law, while Statement 3 is correct because Article 267(2) authorizes State Legislatures to establish a Contingency Fund for their respective states. Statement 2 is incorrect because the Constitution does not fix a specific corpus amount like Rs. 50 crore for the Contingency Fund of States; rather, the corpus is determined by the respective State Legislatures through law, and the Seventh Amendment Act of 1956 did not prescribe such a fixed national limit for states.
Consider the following statements regarding Requirement of subsequent parliamentary authorization for recoupment:
1. The Secretary to the Government of India in the Ministry of Finance holds the Contingency Fund on behalf of the President of India.
2. Supplementary estimates are presented to Parliament to authorize the recoupment of advances taken from the Contingency Fund for unforeseen expenditure.
3. The Contingency Fund of India operates under the oversight of the Public Accounts Committee, which provides the necessary executive authorization for recoupment during inter-session periods.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is incorrect.
Statement 1 is correct as the Contingency Fund of India Act, 1950, places the fund at the disposal of the President, operated on their behalf by the Secretary to the Ministry of Finance. Statement 2 is correct because once an advance is made from the fund for unforeseen expenditure, the equivalent amount must be recouped by presenting supplementary, additional, or excess grants to Parliament. Statement 3 is incorrect because the fund is under the control of the Executive (President), not the Public Accounts Committee, and the Committee has no role in providing executive authorization for recoupment.
Consider the following statements regarding Role of the Contingency Fund in maintaining fiscal discipline:
1. The corpus of the Contingency Fund is maintained by the Controller General of Accounts, and the fund allows for the transfer of surplus tax revenue at the end of each fiscal year.
2. The Comptroller and Auditor General of India submits a quarterly report on the Contingency Fund to the Public Accounts Committee, which reviews the necessity of the emergency expenditure.
3. The Contingency Fund of India is established under Article 267(1) of the Constitution and is placed at the disposal of the President of India.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because Article 267(1) empowers Parliament to establish the Contingency Fund of India, which is placed at the disposal of the President to meet unforeseen expenditures pending parliamentary authorization. Statement 1 is incorrect because the fund is held by the Secretary to the Government of India, Ministry of Finance, on behalf of the President, and it is not a repository for surplus tax revenue. Statement 2 is incorrect because there is no constitutional or statutory requirement for the CAG to submit a quarterly report on this fund to the Public Accounts Committee; instead, all such expenditures must be subsequently approved by Parliament through a supplementary grant.
Consider the following statements regarding Constitutional limits on the corpus of the fund:
1. The Contingency Fund of India Act, 1950, was amended by the Finance Act of 2005 to link the corpus of the fund to 0.5 percent of the annual Gross Domestic Product of the country.
2. The Contingency Fund of India was established by the Parliament under the Contingency Fund of India Act, 1950, pursuant to Article 267(1) of the Constitution.
3. The corpus of the Contingency Fund of India was increased from Rs. 50 crore to Rs. 30,000 crore through the Finance Act of 2021 to provide for unforeseen expenditures.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 2 is correct as Article 267(1) empowers Parliament to establish the Contingency Fund of India, which was enacted via the 1950 Act. Statement 3 is correct because the Finance Act, 2021, raised the corpus from Rs. 500 crore (not Rs. 50 crore) to Rs. 30,000 crore to enhance financial flexibility. Statement 1 is incorrect because the corpus is fixed by law at a specific monetary amount rather than being linked to a percentage of the annual GDP.
Consider the following statements regarding Conditions defining 'unforeseen expenditure:
1. Advances from the Contingency Fund are placed at the disposal of the President of India to enable the government to meet unforeseen expenditure pending authorization by Parliament.
2. The Contingency Fund of India was established by the Parliament under the Contingency Fund of India Act, 1950, in accordance with Article 267(1) of the Constitution.
3. The corpus of the Contingency Fund of India was increased from the initial amount of 15 crore rupees to 500 crore rupees through the Finance Act, 2005.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the Contingency Fund acts as an imprest placed at the President's disposal to meet urgent, unforeseen expenses before parliamentary approval. Statement 2 is correct because Article 267(1) mandates the establishment of this fund, which was enacted via the Contingency Fund of India Act, 1950. Statement 3 is correct as the corpus was indeed raised from its initial âš15 crore to âš500 crore via the Finance Act, 2005, and has since been further increased to âš30,000 crore in 2021 to provide greater fiscal flexibility.
Consider the following statements regarding Judicial review of withdrawals made under emergency provisions:
1. The Supreme Court in the 1997 judgment of 'Vineet Narain v. Union of India' emphasized that executive actions involving public funds remain subject to judicial scrutiny.
2. Article 267(2) of the Constitution refers to the Contingency Fund of States, which allows the Governor to authorize expenditures that are subsequently ratified by the Election Commission.
3. The corpus of the Contingency Fund of India was increased from Rs. 50 crore to Rs. 30,000 crore through the Finance Act, 2021 to provide greater fiscal flexibility.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as the Supreme Court in Vineet Narain (1997) affirmed that executive actions, including the handling of public funds, are subject to judicial oversight to ensure accountability. Statement 3 is correct because the Finance Act, 2021, significantly enhanced the Contingency Fund of India corpus from Rs. 500 crore to Rs. 30,000 crore to address unforeseen exigencies. Statement 2 is incorrect because Article 267(2) empowers the Governor to authorize advances from the State Contingency Fund, which must be subsequently approved by the State Legislature, not the Election Commission.
Consider the following statements regarding Parliamentary oversight on the utilization of advanced funds:
1. The Contingency Fund of India is established under Article 267(1) of the Constitution and is placed at the disposal of the President.
2. The Finance Act of 1950 created the Contingency Fund of India with an initial corpus of Rs 15 crore, which remained unchanged until the constitutional amendment of 1976.
3. The Contingency Fund of India operates under the direct supervision of the Comptroller and Auditor General, who authorizes all withdrawals before they are presented to the Public Accounts Committee.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is correct as Article 267(1) empowers Parliament to establish the Contingency Fund of India, which is held by the Finance Secretary on behalf of the President. Statement 2 is incorrect because the fund was established by the Contingency Fund of India Act, 1950, not the Finance Act, and its corpus has been revised multiple times by Parliament, currently standing at Rs 30,000 crore. Statement 3 is incorrect because the fund is placed at the disposal of the President, and withdrawals are made by the Executive without prior Parliamentary approval, with the CAG only auditing the expenditure post-facto.
Consider the following statements regarding Conditions defining 'unforeseen expenditure:
1. The Contingency Fund of India operates under the administrative control of the Comptroller and Auditor General, who authorizes withdrawals for unforeseen expenditure exceeding 50 crore rupees.
2. Article 267(2) of the Constitution provides for the establishment of a Contingency Fund for each state, which is maintained by the Governor and replenished through the Reserve Bank of India's annual surplus transfer.
3. The Finance Act of 1999 introduced a provision allowing the President to utilize the Contingency Fund for recurring administrative expenses during periods when the Parliament is under prorogation.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Contingency Fund is at the disposal of the President, not the CAG, and is operated by the Secretary to the Government of India in the Ministry of Finance. Statement 2 is incorrect as Article 267(2) empowers the State Legislature to establish a Contingency Fund for the state, which is placed at the disposal of the Governor, not replenished by RBI surplus transfers. Statement 3 is incorrect because the Contingency Fund is strictly reserved for unforeseen expenditure pending parliamentary authorization, and no such provision exists in the Finance Act of 1999 to cover recurring administrative expenses.
Consider the following statements regarding Accounting procedure for replenishment of the fund:
1. The Contingency Fund of India is governed by the Contingency Fund of India Act of 1950, which provides for the automatic replenishment of the corpus through the Reserve Bank of India's annual surplus transfer.
2. The Finance Act of 2021 raised the Contingency Fund corpus to Rs 30,000 crore, and the replenishment process involves a direct transfer from the National Investment and Infrastructure Fund.
3. Subsequent to the expenditure from the Contingency Fund, a supplementary estimate is presented to Parliament to recoup the amount withdrawn.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because, under Article 267(1), once the Contingency Fund is used for unforeseen expenditure, Parliament must authorize the withdrawal from the Consolidated Fund of India to recoup the amount. Statement 1 is incorrect because the corpus is replenished through the Consolidated Fund of India, not the RBI's surplus transfer. Statement 2 is incorrect because, while the corpus was raised to Rs 30,000 crore in 2021, the replenishment process involves a parliamentary vote for supplementary grants, not a transfer from the National Investment and Infrastructure Fund.
Consider the following statements regarding Legal status of the fund as an entity separate from the Consolidated Fund:
1. The Comptroller and Auditor General of India maintains the accounts for the Contingency Fund, and any expenditure incurred from this fund is categorized as charged expenditure under Article 112.
2. The corpus of the Contingency Fund was increased from Rs. 50 crore to Rs. 30,000 crore through the Finance Act of 2021 to provide greater fiscal flexibility.
3. Under the provisions of the General Financial Rules, the Contingency Fund functions as a revolving fund, and its interest earnings are credited to the Consolidated Fund of India at the end of each fiscal year.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 1 is incorrect. Statement 3 is incorrect.
Statement 2 is correct because the Finance Act, 2021, increased the Contingency Fund of India's corpus from Rs. 500 crore to Rs. 30,000 crore to enhance fiscal agility. Statement 1 is incorrect because the Contingency Fund is held by the President and operated by the Secretary of the Ministry of Finance, not the CAG, and expenditures from it are not 'charged' under Article 112 but are 'voted' by Parliament subsequently to recoup the fund. Statement 3 is incorrect because the Contingency Fund is an imprest fund meant for unforeseen expenditures, and there is no provision under the General Financial Rules requiring its interest earnings to be credited to the Consolidated Fund of India.
Consider the following statements regarding Procedure for increasing the corpus through legislative amendment:
1. The Comptroller and Auditor General of India exercises ex-ante control over the Contingency Fund, and any increase in the corpus involves a direct amendment to the Second Schedule of the Constitution.
2. The Contingency Fund of India Act, 1950, provides for the transfer of surplus funds from the Consolidated Fund of India into the corpus at the end of each fiscal year ending March 31.
3. The initial corpus of the Contingency Fund was fixed at âš15 crore by the Constitution (First Amendment) Act, 1951, which remains the baseline for all subsequent legislative revisions.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Contingency Fund is under the control of the President, not the CAG, and its corpus is increased via an Act of Parliament, not a Constitutional Amendment. Statement 2 is incorrect as the Act does not mandate automatic year-end transfers; rather, Parliament may authorize the transfer of funds from the Consolidated Fund to the Contingency Fund as needed. Statement 3 is incorrect because the initial corpus was fixed at âš15 crore by the Contingency Fund of India Act, 1950, not by a Constitutional Amendment, and the corpus has been increased multiple times by Parliament, currently standing at âš30,000 crore.
Consider the following statements regarding Role of the Finance Secretary in managing the fund:
1. Advances made from the Contingency Fund are subsequently recouped by obtaining authorization from Parliament through a Supplementary Demand for Grants.
2. Section 2 of the Contingency Fund of India Act, 1950, provides the legal framework for the custody and administration of the fund by the Secretary to the Government of India in the Ministry of Finance.
3. The Contingency Fund of India is placed at the disposal of the President, and the Department of Economic Affairs under the Ministry of Finance manages its day-to-day operations.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct because, per Article 267(1), any expenditure from the Contingency Fund must be recouped by Parliament through a Supplementary Grant to restore the fund's corpus. Statement 2 is correct as the Contingency Fund of India Act, 1950, explicitly vests the custody and administration of the fund in the Secretary to the Ministry of Finance on behalf of the President. Statement 3 is correct because the fund is legally at the disposal of the President, while the Department of Economic Affairs (DEA) is the administrative body responsible for its day-to-day management.
Consider the following statements regarding Accounting procedure for replenishment of the fund:
1. The Contingency Fund of India is established under Article 267(1) of the Constitution and is placed at the disposal of the President.
2. The corpus of the Contingency Fund of India was increased from Rs 50 crore to Rs 500 crore through the Finance Act of 2005.
3. Advances from the Contingency Fund are made for the purposes of meeting unforeseen expenditure pending authorization by Parliament.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as Article 267(1) empowers Parliament to establish the Contingency Fund, which is held by the President to meet unforeseen expenditures. Statement 2 is correct because the Finance Act, 2005, raised the corpus from Rs 50 crore to Rs 500 crore (further increased to Rs 30,000 crore in 2021). Statement 3 is correct as the fund acts as an imprest, allowing the Executive to incur urgent expenses before formal parliamentary authorization is obtained through a supplementary grant.
Consider the following statements regarding Accounting procedure for replenishment of the fund:
1. Article 267(2) of the Constitution relates to the Contingency Fund of India, and the accounting procedure allows for the fund to be replenished via the issuance of treasury bills by the Comptroller and Auditor General.
2. The accounting procedure for the replenishment of the Contingency Fund involves a debit to the Consolidated Fund of India after legislative approval.
3. The Secretary to the Government of India in the Ministry of Finance, Department of Economic Affairs, holds the fund on behalf of the President.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 1 is incorrect because Article 267(1) pertains to the Contingency Fund of India, while Article 267(2) relates to the Contingency Fund of States; furthermore, the fund is replenished by the Consolidated Fund of India through a parliamentary vote, not by the Comptroller and Auditor General. Statement 2 is correct as any expenditure incurred from the Contingency Fund must be recouped by transferring an equivalent amount from the Consolidated Fund of India following subsequent parliamentary authorization. Statement 3 is correct because, under the Contingency Fund of India Act, 1950, the fund is placed at the disposal of the President, who authorizes the Secretary of the Department of Economic Affairs to operate it on their behalf.
Consider the following statements regarding Role of the President in authorizing advances:
1. Article 266 of the Constitution governs the Contingency Fund, providing the President the authority to bypass parliamentary approval for recurring administrative expenses exceeding Rs 100 crore.
2. The Contingency Fund of India operates under the direct supervision of the Comptroller and Auditor General, who authorizes all withdrawals before they are presented to the President for final approval.
3. The Finance Act of 1950 established the initial corpus of the Contingency Fund at Rs 15 crore, which remained unchanged until the constitutional amendment of 1976.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Contingency Fund is governed by Article 267, not 266, and it is meant for unforeseen expenditure, not recurring administrative expenses. Statement 2 is incorrect as the fund is placed at the disposal of the President, and advances are made by the Secretary to the Government of India in the Ministry of Finance, not the CAG. Statement 3 is incorrect because the corpus was established by the Contingency Fund of India Act, 1950, and its limit has been revised multiple times through legislative amendments, not by a constitutional amendment.
Consider the following statements regarding Distinction between Contingency Fund and Consolidated Fund of India:
1. The initial corpus of the Contingency Fund of India was set at 15 crore rupees by the Contingency Fund of India Act, 1950.
2. Advances made from the Contingency Fund of India are recouped to the fund by subsequent authorization from the Consolidated Fund of India.
3. The Contingency Fund of India is held by the Secretary to the Government of India in the Ministry of Finance on behalf of the President.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the Contingency Fund of India Act, 1950, initially established the corpus at Rs 15 crore, which has since been increased by Parliament. Statement 2 is correct because any expenditure incurred from this fund is treated as an advance, which must be recouped by transferring an equivalent amount from the Consolidated Fund of India after parliamentary authorization. Statement 3 is correct as the fund is placed at the disposal of the President and is held on their behalf by the Secretary to the Government of India, Ministry of Finance.
Consider the following statements regarding Judicial review of withdrawals made under emergency provisions:
1. Withdrawals from the Contingency Fund for emergency purposes are governed by the Contingency Fund of India Act, 1950, which provides for an automatic judicial review by the High Courts.
2. The Finance Ministry manages the Contingency Fund as a part of the Public Account of India, and the Reserve Bank of India oversees the audit of these withdrawals under the 1934 Act.
3. Advances from the Contingency Fund are recouped by the Consolidated Fund of India after obtaining authorization from Parliament through a supplementary grant.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because Article 267(1) of the Constitution mandates that advances from the Contingency Fund must be recouped by the Consolidated Fund of India through parliamentary authorization. Statement 1 is incorrect as the Contingency Fund is placed at the disposal of the President, and its withdrawals are not subject to automatic judicial review by High Courts. Statement 2 is incorrect because the Fund is held by the Secretary to the Government of India in the Ministry of Finance on behalf of the President, and it is audited by the Comptroller and Auditor General (CAG) of India, not the Reserve Bank of India.
Consider the following statements regarding Parliamentary oversight on the utilization of advanced funds:
1. Parliamentary approval for the recoupment of the Contingency Fund is sought through the submission of Supplementary Demands for Grants during the Winter Session, as per the rules of the Lok Sabha Secretariat.
2. The President of India exercises the power to withdraw funds from the Contingency Fund in consultation with the Reserve Bank of India, which maintains the ledger for these transactions.
3. Article 266 of the Constitution provides the legal framework for the Contingency Fund, allowing the Union government to utilize these resources for capital expenditure without prior legislative sanction.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because recoupment is sought through Supplementary Demands for Grants in the session immediately following the expenditure, not specifically the Winter Session. Statement 2 is incorrect as the Contingency Fund is placed at the disposal of the President, but it is operated by the Secretary to the Government of India, Ministry of Finance, not in consultation with the RBI. Statement 3 is incorrect because the Contingency Fund of India is established under Article 267, not Article 266, and it is intended for unforeseen expenditure, not specifically for capital expenditure without legislative sanction.
Consider the following statements regarding Executive power to withdraw funds without prior parliamentary approval:
1. Article 267(2) of the Constitution governs the operation of the Contingency Fund of India, and it allows the Governor of a state to authorize withdrawals for central government projects.
2. The Contingency Fund of India Act of 1950 provides for the initial corpus of Rs 15 crore and designates the Comptroller and Auditor General as the primary custodian of the fund.
3. The Contingency Fund of India is established under Article 267(1) of the Constitution to meet unforeseen expenditure pending authorization by Parliament.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because Article 267(1) empowers Parliament to establish the Contingency Fund of India to meet unforeseen expenditures pending legislative authorization. Statement 1 is incorrect because Article 267(2) pertains to the Contingency Fund of a State under the Governor's control, not the Contingency Fund of India. Statement 2 is incorrect because the Secretary to the Government of India in the Ministry of Finance, not the Comptroller and Auditor General, acts as the custodian of the fund on behalf of the President.
Consider the following statements regarding Judicial review of withdrawals made under emergency provisions:
1. The Comptroller and Auditor General of India maintains the accounts of the Contingency Fund under Article 150, and these accounts are subject to prior parliamentary approval before any withdrawal.
2. The Contingency Fund of India is established under Article 267(1) of the Constitution and is placed at the disposal of the President to meet unforeseen expenditure.
3. The President of India holds the authority to increase the corpus of the Contingency Fund through an executive ordinance, which was last exercised during the 2008 global financial crisis.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 1 is incorrect. Statement 3 is incorrect.
Statement 2 is correct as Article 267(1) establishes the Contingency Fund of India at the disposal of the President to meet unforeseen expenditure pending parliamentary authorization. Statement 1 is incorrect because the Contingency Fund operates as an imprest account, allowing withdrawals without prior parliamentary approval, with regularization occurring later. Statement 3 is incorrect because the corpus of the fund is determined by Parliament through law, not by executive ordinance, and the corpus has been revised multiple times by legislative acts, most recently in 2021.
Consider the following statements regarding Procedure for increasing the corpus through legislative amendment:
1. The Contingency Fund of India was established by the Parliament under the Contingency Fund of India Act, 1950, to meet unforeseen expenditure pending authorization by the legislature.
2. The Contingency Fund of India is maintained in the Public Account under Article 266, and its corpus adjustment follows the budgetary process outlined in the Appropriation Act of 1951.
3. Under the Finance Act of 2021, the corpus of the Contingency Fund of India was increased from âš500 crore to âš30,000 crore to provide the government with greater financial flexibility.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as the Contingency Fund of India Act, 1950, was enacted by Parliament under Article 267(1) to meet unforeseen expenditures. Statement 3 is correct because the Finance Act, 2021, amended the 1950 Act to increase the corpus from âš500 crore to âš30,000 crore. Statement 2 is incorrect because the Contingency Fund is held by the President under Article 267, not Article 266 (which pertains to the Consolidated Fund and Public Account), and it operates as an imprest rather than being subject to the standard budgetary process of an Appropriation Act.
Consider the following statements regarding Constitutional limits on the corpus of the fund:
1. Article 267(2) of the Constitution provides for the establishment of a Contingency Fund for each state, which is subject to the same parliamentary ceiling as the Contingency Fund of India.
2. Advances from the Contingency Fund of India are made for the purposes of meeting unforeseen expenditure pending authorization of such expenditure by the Parliament.
3. The Secretary to the Government of India in the Ministry of Finance, Department of Economic Affairs, holds the Contingency Fund of India on behalf of the President.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 3 is correct. Statement 1 is incorrect.
Statement 1 is incorrect because Article 267(2) empowers the State Legislature, not Parliament, to establish and determine the corpus of a state's Contingency Fund. Statement 2 is correct as the fund acts as an imprest placed at the President's disposal to meet urgent, unforeseen expenditures that require subsequent parliamentary approval. Statement 3 is correct because the Contingency Fund of India is legally held by the Secretary to the Government of India in the Ministry of Finance (Department of Economic Affairs) on behalf of the President.
Consider the following statements regarding Conditions defining 'unforeseen expenditure:
1. The Contingency Fund of India is held by the Secretary to the Government of India in the Ministry of Finance, Department of Economic Affairs, on behalf of the President.
2. The Contingency Fund of India Act was amended in 2021 to increase the corpus of the fund to 30,000 crore rupees to provide greater fiscal flexibility during the pandemic.
3. Expenditure incurred from the Contingency Fund is subsequently recouped by transferring funds from the Consolidated Fund of India after obtaining parliamentary approval via supplementary estimates.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the Contingency Fund of India is placed at the disposal of the President and operated by the Secretary, Ministry of Finance, on their behalf. Statement 2 is correct because the Finance Act, 2021, increased the corpus of the fund from Rs 500 crore to Rs 30,000 crore to enhance fiscal agility. Statement 3 is correct as expenditures from this fund are of an emergent nature and must be recouped by the Consolidated Fund of India through parliamentary authorization via supplementary, additional, or excess grants.
Consider the following statements regarding Mechanism for charging expenditure to the Consolidated Fund after authorization:
1. The corpus of the Contingency Fund of India was increased from Rs 50 crore to Rs 30,000 crore through the Finance Act, 2021, to enhance the financial flexibility of the executive.
2. The Contingency Fund is maintained by the Reserve Bank of India, and the Finance Secretary exercises the authority to approve disbursements before the Parliament session begins.
3. Article 266(2) provides for the establishment of the Contingency Fund, and the Ministry of Finance manages the fund through the Consolidated Fund of India's annual budget estimates.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is correct as the Finance Act, 2021, raised the Contingency Fund corpus from Rs 500 crore to Rs 30,000 crore to meet unforeseen expenditures. Statement 2 is incorrect because the Contingency Fund is placed at the disposal of the President, not the Finance Secretary, and is operated by the Secretary to the Government of India, Ministry of Finance, on behalf of the President. Statement 3 is incorrect because the Contingency Fund of India is established under Article 267(1), not Article 266(2), and it operates as an imprest fund independent of the annual budget estimates of the Consolidated Fund.
Consider the following statements regarding Role of the President in authorizing advances:
1. Under the provisions of the Contingency Fund of India Act, 1950, the President can authorize advances for state-level disasters if the Governor of the concerned state submits a formal request to the Union Cabinet.
2. The Reserve Bank of India maintains the Contingency Fund as a separate escrow account, and the Governor of the Bank countersigns the President's orders for the release of emergency funds.
3. The Contingency Fund of India is established under Article 267(1) of the Constitution and is placed at the disposal of the President.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 3 is correct. Statement 1 is incorrect. Statement 2 is incorrect.
Statement 3 is correct because Article 267(1) of the Constitution mandates the establishment of the Contingency Fund of India, which is placed at the disposal of the President to meet unforeseen expenditures pending parliamentary authorization. Statement 1 is incorrect because the Contingency Fund of India is exclusively for Union expenditures; state-level disasters are addressed by the Contingency Fund of the State under Article 267(2). Statement 2 is incorrect because the fund is held by the Secretary to the Government of India in the Ministry of Finance on behalf of the President, not the RBI, and the RBI plays no role in countersigning presidential orders for its release.
Consider the following statements regarding Legal status of the fund as an entity separate from the Consolidated Fund:
1. Article 266 of the Constitution provides for the creation of the Contingency Fund, and its annual audit is conducted by the Public Accounts Committee of Parliament.
2. The Secretary of the Department of Economic Affairs operates the Contingency Fund on behalf of the President, and its balance is reflected in the Union Budget as a part of the Public Account.
3. The Contingency Fund is governed by the Contingency Fund of India Act of 1950, which permits the Cabinet Committee on Economic Affairs to approve emergency disbursements exceeding the corpus limit.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Contingency Fund is established under Article 267, not 266, and it is audited by the Comptroller and Auditor General (CAG), not the Public Accounts Committee. Statement 2 is incorrect because the fund is held by the Finance Secretary on behalf of the President, and it operates as an imprest account distinct from the Public Account. Statement 3 is incorrect because the Contingency Fund of India Act, 1950, empowers the Finance Secretary to make advances for unforeseen expenditure, and no authority, including the Cabinet Committee, can bypass the statutory corpus limit without parliamentary approval.
Consider the following statements regarding Legal constraints on the usage of the fund for non-emergency purposes:
1. The Contingency Fund of India is established under Article 267(1) of the Constitution and is placed at the disposal of the President.
2. The corpus of the Contingency Fund of India was increased from Rs 50 crore to Rs 30,000 crore through the Finance Act of 2021.
3. Advances from the Contingency Fund are made to meet unforeseen expenditure pending authorization of such expenditure by Parliament under Article 115 or 116.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as Article 267(1) empowers Parliament to establish the Contingency Fund, which remains under the President's control for unforeseen expenses. Statement 2 is correct because the Finance Act, 2021, significantly enhanced the corpus of the fund from Rs 500 crore (not Rs 50 crore) to Rs 30,000 crore to provide greater fiscal flexibility. Statement 3 is correct because the fund acts as an imprest, allowing the executive to draw money for urgent needs, which must subsequently be regularized by Parliament through supplementary or excess grants under Articles 115 or 116.
Consider the following statements regarding Constitutional basis under Article 267(1):
1. The Contingency Fund of India Act, 1950, provides the legal framework for the operation and management of the fund.
2. The Contingency Fund of India is utilized for meeting expenditure on new services not contemplated in the Annual Financial Statement, as defined under Article 115 of the Constitution.
3. Advances from the Contingency Fund of India are recouped to the fund by a subsequent authorization from the Parliament through a supplementary grant.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as the Contingency Fund of India Act, 1950, was enacted by Parliament to establish the fund as per Article 267(1). Statement 3 is correct because any advance taken from the fund must be recouped by transferring an equivalent amount from the Consolidated Fund of India after Parliament authorizes the expenditure via supplementary or excess grants. Statement 2 is incorrect because the Contingency Fund is meant for 'unforeseen' expenditure, whereas Article 115 relates to 'Supplementary, additional or excess grants' which are processed through the Consolidated Fund, not the Contingency Fund.
Consider the following statements regarding Executive power to withdraw funds without prior parliamentary approval:
1. The Contingency Fund of India is placed at the disposal of the Secretary to the Government of India in the Ministry of Finance, Department of Economic Affairs.
2. The President of India holds the authority to make advances out of the Contingency Fund to meet urgent expenditures.
3. The corpus of the Contingency Fund of India was increased from Rs 50 crore to Rs 500 crore through the Finance Act of 2005.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
The Contingency Fund of India is established under Article 267(1) and is legally placed at the disposal of the Finance Secretary on behalf of the President. The President holds the authority to authorize advances from this fund to meet unforeseen expenditures pending parliamentary authorization. The corpus was indeed increased from Rs 50 crore to Rs 500 crore by the Finance Act, 2005, and subsequently raised further to Rs 30,000 crore in 2021 to provide greater fiscal flexibility.
Consider the following statements regarding Requirement of subsequent parliamentary authorization for recoupment:
1. The Contingency Fund of India is governed by the provisions of Article 266, which allows the Comptroller and Auditor General to authorize direct withdrawals for emergency relief operations.
2. The Finance Act of 1952 established the current corpus limit of 500 crore rupees, which allows the Cabinet Secretariat to bypass legislative oversight during national disasters.
3. Advances from the Contingency Fund are recorded under the Public Account of India, and the Reserve Bank of India maintains the authority to recoup these amounts without seeking legislative sanction.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
The Contingency Fund of India is established under Article 267, not Article 266, and is placed at the disposal of the President, not the CAG. The fund is governed by the Contingency Fund of India Act, 1950, which sets the corpus at Rs. 500 crore, and any advance must be recouped by subsequent parliamentary authorization, meaning the Cabinet cannot bypass legislative oversight. Furthermore, advances from the fund are not part of the Public Account, and the Reserve Bank of India has no authority to recoup these amounts; instead, the government must seek approval from Parliament to replenish the fund from the Consolidated Fund of India.
Consider the following statements regarding Legal constraints on the usage of the fund for non-emergency purposes:
1. Article 267(2) of the Constitution provides for the establishment of a Contingency Fund for the Union Territories, which is administered by the Lieutenant Governor of Delhi under the guidance of the Union Finance Ministry.
2. The Contingency Fund of India was originally constituted with a corpus of Rs 15 crore under the Contingency Fund of India Act, 1950, which allows the Cabinet Secretary to authorize emergency disbursements.
3. The 2021 enhancement of the Contingency Fund corpus to Rs 30,000 crore is managed by the Comptroller and Auditor General, who provides quarterly reports on non-emergency withdrawals to the Public Accounts Committee.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because Article 267(1) establishes the Contingency Fund of India for the Union, while Article 267(2) pertains to States, not specifically Union Territories, and it is administered by the Finance Secretary, not the Lieutenant Governor. Statement 2 is incorrect as the corpus was initially Rs 15 crore, but it is administered by the Finance Secretary on behalf of the President, not the Cabinet Secretary. Statement 3 is incorrect because the fund is managed by the Finance Secretary, and while the corpus was increased to Rs 30,000 crore, the Comptroller and Auditor General does not manage the fund nor provide quarterly reports on its usage to the Public Accounts Committee.
Consider the following statements regarding Auditing role of the Comptroller and Auditor General (CAG):
1. The Comptroller and Auditor General verifies the initial authorization of every withdrawal from the Contingency Fund, providing a pre-expenditure certification that is recorded in the Union Budget documents.
2. The Contingency Fund of India is placed at the disposal of the President under Article 267(1) of the Constitution to enable the government to meet unforeseen expenditure.
3. The Contingency Fund of India Act, 1950, provides for the transfer of unspent balances at the end of the financial year into the Consolidated Fund of India to maintain fiscal neutrality in the government accounts.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 2 is correct. Statement 1 is incorrect. Statement 3 is incorrect.
Statement 2 is correct as Article 267(1) empowers the President to operate the Contingency Fund to meet unforeseen expenditure pending parliamentary authorization. Statement 1 is incorrect because the CAG does not provide pre-expenditure certification; withdrawals are made by the Executive, and the CAG audits them only post-facto. Statement 3 is incorrect because the Contingency Fund operates as an imprest account, and unspent balances remain in the fund rather than being transferred to the Consolidated Fund of India.
Consider the following statements regarding Auditing role of the Comptroller and Auditor General (CAG):
1. The Comptroller and Auditor General submits a dedicated annual report on the Contingency Fund to the President, which is then tabled in the Rajya Sabha under Article 151(2) before the budget session begins.
2. Under the provisions of the General Financial Rules, the Secretary of the Ministry of Finance holds the authority to authorize withdrawals from the Contingency Fund, subject to a retrospective audit by the Public Accounts Committee.
3. The Contingency Fund of India operates under the direct supervision of the Reserve Bank of India, which maintains the ledger accounts and reports the monthly balance to the Comptroller and Auditor General.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the CAG does not submit a dedicated annual report on the Contingency Fund; instead, expenditures from it are audited and reported as part of the annual Appropriation Accounts. Statement 2 is incorrect as the Contingency Fund is placed at the disposal of the President, and withdrawals are authorized by the Secretary of the Department of Economic Affairs on behalf of the President, not the Ministry of Finance secretary, and are subject to subsequent Parliament approval, not just a PAC audit. Statement 3 is incorrect because the Contingency Fund is held by the Secretary of the Department of Economic Affairs on behalf of the President, and while the RBI maintains the account, it does not supervise the fund or report monthly balances to the CAG for oversight purposes.
Consider the following statements regarding Constitutional basis under Article 267(1):
1. The Contingency Fund of India was first constituted under the Government of India Act, 1935, and later incorporated into the Constitution by the 1st Amendment Act, 1951.
2. The Contingency Fund of India is maintained in the Public Account of India, and its corpus is determined by the Union Cabinet on the recommendation of the Finance Commission.
3. The Secretary of the Department of Economic Affairs holds the fund on behalf of the President, and the fund is audited by the Comptroller and Auditor General under Article 148.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is incorrect because the Contingency Fund of India was established by the Contingency Fund of India Act, 1950, under Article 267(1) of the Constitution, not by the 1935 Act or the 1st Amendment. Statement 2 is incorrect as the fund is at the disposal of the President, and its corpus is determined by Parliament through law, not by the Cabinet or Finance Commission. Statement 3 is incorrect because, while the Secretary of the Department of Economic Affairs operates the fund on behalf of the President, the Comptroller and Auditor General (CAG) audits the expenditure from the fund only after it has been incurred, but the fund itself is not maintained under Article 148.
Consider the following statements regarding Role of the Finance Secretary in managing the fund:
1. The Contingency Fund of India was established under Article 267(1) of the Constitution, which came into effect on 26 January 1950.
2. The Contingency Fund of India Act was amended in 2005 to include the Comptroller and Auditor General as a co-signatory alongside the Finance Secretary for all disbursements exceeding Rs 100 crore.
3. The Finance Secretary, acting on behalf of the President of India, holds the authority to make advances from the Contingency Fund to meet unforeseen expenditures.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 3 is correct. Statement 2 is incorrect.
Statement 1 is correct as the Contingency Fund of India was established by Parliament under Article 267(1) of the Constitution. Statement 3 is correct because the fund is placed at the disposal of the President, and advances are made by the Finance Secretary on behalf of the President to meet unforeseen expenditure pending parliamentary authorization. Statement 2 is incorrect because the Contingency Fund of India Act, 1950, does not require the Comptroller and Auditor General to be a co-signatory for disbursements; the fund is operated by the Finance Secretary on behalf of the President.
Consider the following statements regarding Mechanism for charging expenditure to the Consolidated Fund after authorization:
1. Expenditure incurred from the Contingency Fund is audited by the Estimates Committee, which submits its findings to the President within six months of the financial year ending.
2. The Contingency Fund operates under the supervision of the Union Cabinet, and its disbursements are classified as charged expenditure under the Second Schedule of the Constitution.
3. The President of India holds the power to increase the corpus of the Contingency Fund via an executive order, which is subsequently ratified by the Public Accounts Committee.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
All three statements are incorrect because the Contingency Fund of India is placed at the disposal of the President, not the Union Cabinet, and is operated by the Finance Secretary on the President's behalf. Expenditure from this fund is recouped by the Parliament through the Consolidated Fund of India, not audited by the Estimates Committee, and is not classified under the Second Schedule. Furthermore, the corpus of the fund is determined by the Parliament through law (Contingency Fund of India Act, 1950), and any increase requires legislative amendment rather than an executive order ratified by the Public Accounts Committee.
Consider the following statements regarding Role of the Contingency Fund in maintaining fiscal discipline:
1. Under the provisions of the Contingency Fund of India Act, 1950, the fund is utilized for meeting unforeseen expenses, with interest earned on the balance credited to the Reserve Bank of India.
2. The Contingency Fund operates as a revolving fund under the Public Account of India, and its annual audit is conducted by the NITI Aayog to ensure fiscal transparency.
3. The Secretary of the Department of Economic Affairs holds the authority to operate the Contingency Fund, and these withdrawals are recorded under the Consolidated Fund of India as per the 1950 Act.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is incorrect. Statement 2 is incorrect. Statement 3 is incorrect.
All three statements are incorrect because the Contingency Fund is placed at the disposal of the President, not the RBI or NITI Aayog, and is operated by the Secretary of the Department of Economic Affairs on behalf of the President. Statement 1 is false as the fund does not earn interest, and Statement 2 is incorrect because the fund is not part of the Public Account but is a separate fund under Article 267, with audits conducted by the Comptroller and Auditor General (CAG), not NITI Aayog. Statement 3 is misleading because while the Secretary operates the fund, withdrawals are made to meet unforeseen expenditure pending authorization by Parliament, after which the amount is recouped to the fund from the Consolidated Fund of India, rather than being simply recorded under it.
Consider the following statements regarding Requirement of subsequent parliamentary authorization for recoupment:
1. The Contingency Fund Act of 1950 originally set the corpus of the fund at 15 crore rupees before subsequent amendments increased this limit.
2. The Contingency Fund of India is established under Article 267(1) of the Constitution and is placed at the disposal of the President of India.
3. Expenditure incurred from the Contingency Fund is subsequently recouped by transferring funds from the Consolidated Fund of India after parliamentary approval.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is correct. Statement 3 is correct.
Statement 1 is correct as the Contingency Fund of India Act, 1950, initially fixed the corpus at Rs 15 crore, which has been raised periodically, most recently to Rs 30,000 crore. Statement 2 is correct because Article 267(1) empowers Parliament to establish the fund, which is held by the Finance Secretary on behalf of the President to meet unforeseen expenditures. Statement 3 is correct because once the contingency expenditure is incurred, the amount is recouped to the fund from the Consolidated Fund of India through a supplementary grant approved by Parliament, ensuring the fund remains available for future emergencies.
Consider the following statements regarding Legislative competence of Parliament versus State Legislatures:
1. Article 267(2) provides the legislative framework for State Legislatures to establish a Contingency Fund of the State, managed by the Governor for similar emergency purposes.
2. The Contingency Fund of the State is established under Article 266, which allows the State Legislature to transfer surplus revenue from the Consolidated Fund into a separate emergency reserve.
3. The 1950 Act governing the Contingency Fund was amended in 2005 to include provisions for the transfer of unclaimed judicial deposits into the national emergency corpus.
How many of the statements given above are correct?
- Only one
- Only two
- All three
- None
Explanation: Statement 1 is correct. Statement 2 is incorrect. Statement 3 is incorrect.
Statement 1 is correct as Article 267(2) empowers State Legislatures to establish a Contingency Fund of the State, which is placed at the disposal of the Governor to meet unforeseen expenditure. Statement 2 is incorrect because the Contingency Fund is established under Article 267, not Article 266, which pertains to the Consolidated Fund and Public Account. Statement 3 is incorrect because the Contingency Fund of India Act, 1950, does not contain provisions for transferring unclaimed judicial deposits; such funds are typically governed by specific judicial rules and the Public Account.