Consolidated Fund of India

Constituted under Article 267 of the Constitution, Consolidated Fund of India is one of the three most important accounts of Government, along with Contingency Fund and Public Account.
Consolidated Fund
3 min

The Consolidated Fund of India stands as a cornerstone of the nation's financial architecture, serving as the principal repository for all government revenue and essential expenditures. Embedded within the intricate fabric of India's fiscal framework, this fund embodies the collective financial resources amassed through diverse revenue streams, encompassing direct and indirect taxes, dividends from Public Sector Undertakings (PSUs), and proceeds from disinvestment initiatives. At its core, the Consolidated Fund embodies the essence of financial prudence and accountability, dictating the stringent protocols governing the allocation and utilisation of the country's financial resources. Consolidated funds play a crucial role in the financial operations of Asset Management Companies (AMCs), as they are often utilised for pooling and managing diverse investments across various financial instruments and portfolios.

What is Consolidated Fund of India?

The Consolidated Fund of India, as mandated by Article 266(1) of the Indian Constitution, stands as the cornerstone of the nation's financial operations. It serves as the central repository for all revenues amassed by the Government of India, drawing from a diverse array of sources including income tax, customs duties, central excise, and non-tax revenue. Moreover, it encompasses financial inflows stemming from loans, be it through the issuance of treasury bills or other avenues, alongside repayments made on these borrowings.

So, answering the question - of what is a consolidated fund; the Consolidated Fund of India plays a pivotal role in the fiscal landscape, acting as the primary financial hub through which all legitimate expenditures on behalf of the Indian government are facilitated. It functions as the principal reservoir from which all government spending is financed, with only extraordinary items falling under the purview of the Contingency Fund or the Public Account.

Of paramount importance is the requirement for parliamentary authorisation before any disbursement from this fund can take place. This rigorous adherence to parliamentary approval mechanisms ensures that resource allocation remains transparent and accountable, safeguarding against misuse or mismanagement of public funds.

Similarly, each state within the Indian federation possesses the authority to establish its own Consolidated Funds, guided by the principles and guidelines laid down by the central authority. This decentralised approach allows for efficient financial management at both the national and state levels, ensuring fiscal responsibility and prudent governance across the board.

What are the sources of revenue for the consolidated fund of India?

The Consolidated Fund of India functions as the primary reservoir where all government revenue is pooled, covering a wide spectrum of sources and transactions:

  • Revenue from direct taxes: This encompasses income tax collected from individuals and corporate entities. It also includes taxes levied on income derived from various sources such as salaries, investments, and business profits.
  • Revenue from indirect taxes: Indirect taxes, including the Goods and Services Tax (GST), form a significant portion of the fund. These taxes are imposed on goods and services at the point of sale or consumption, contributing to the government's revenue stream.
  • Dividends and profits from PSUs: Public Sector Undertakings (PSUs) contribute to the Consolidated Fund by providing dividends and profits generated from their operations. These state-owned enterprises play a crucial role in contributing to the government's revenue.
  • Earnings from government services: The fund also includes earnings generated from various services provided by the government, such as administrative fees, licences, and permits. These revenues stem from a diverse range of government activities and services rendered to the public.
  • Receipts from disinvestment, debt repayments, and loan recoveries: Disinvestment proceeds, repayments of government debt, and recoveries from loans constitute another significant component of the Consolidated Fund. These inflows result from strategic divestment of government assets, repayment of loans extended by the government, and recovery of outstanding dues.

It's noteworthy that any withdrawal from the Consolidated Fund of India necessitates explicit approval from the Parliament. This legislative oversight ensures that the allocation of the nation's financial resources undergoes a stringent and transparent process, safeguarding against misuse or arbitrary expenditure. The rigorous parliamentary scrutiny upholds accountability and ensures that public funds are utilised efficiently for the benefit of the nation's development and welfare.

What is the charged expenditure on the consolidated fund of India?

Nature of charged expenditures:

  • Charged Expenditures are disbursements sourced from the Consolidated Fund of India.
  • These expenditures fall under the category of non-votable charges.

Withdrawal procedure:

  • No voting procedure is involved in the withdrawal process of Charged Expenditures.
  • These expenses are withdrawn from the Consolidated Fund without undergoing a voting process.

Obligatory nature:

  • It is crucial to recognise that Charged Expenditures are obligatory.
  • These expenses must be honoured regardless of whether the Budget is passed or not.

Expenses covered:

  • Charged Expenditures encompass various expenses related to high-ranking officials and dignitaries.
  • These include salaries and allowances for:
    • The President of India
    • The Speaker of the Lok Sabha
    • The Deputy Speaker of the Lok Sabha
    • The Chairman and Deputy Chairman of the Rajya Sabha
    • Supreme Court judges, including their salaries and allowances
    • Pensions allocated to Supreme Court and High Court judges.


In conclusion, the Consolidated Fund of India stands as a testament to the nation's commitment to fiscal responsibility and transparency in governance. Serving as the bedrock of financial operations, it encapsulates the essence of prudent resource management and diligent oversight. By upholding rigorous parliamentary authorization processes and ensuring the allocation of resources to meet obligatory charges, the Consolidated Fund epitomises the nation's unwavering dedication to fiscal discipline. As India continues its journey towards economic prosperity and inclusive growth, the significance of the Consolidated Fund remains paramount, underscoring the importance of responsible financial stewardship for the collective welfare of its citizens.

Furthermore, it is essential to recognise the role of platforms like Bajaj Finserv Mutual Fund Platform in empowering individuals to participate in wealth creation and financial planning. By providing access to a diverse range of mutual funds and investment opportunities, the Bajaj Finserv Platform enables investors to navigate the complexities of the financial markets with confidence. Mutual fund schemes offer diverse investment options tailored to investors' risk profiles and financial goals, facilitating comparison among various mutual funds to make informed investment decisions. With over 1000 mutual funds listed on the platform, investors can diversify their portfolios and pursue their financial goals with ease.

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Frequently asked questions

What is meant by Consolidated Fund?
The Consolidated Fund refers to a financial account in which all government revenues, receipts, and expenses are consolidated. It serves as the primary repository for government funds, encompassing revenue from taxes, duties, fees, and other sources. The utilisation of funds from the Consolidated Fund requires parliamentary approval and is typically designated for essential government expenditures, including salaries, pensions, debt repayments, and other non-discretionary expenses.
What is difference between Consolidated Fund and Contingency Fund?
The Consolidated Fund is the main repository where all government revenues, including taxes and other receipts, are deposited. It is utilised for routine government expenses like salaries, pensions, and debt repayments, and requires parliamentary approval for withdrawals. In contrast, the Contingency Fund serves as an emergency reserve for unforeseen expenses, allowing for quick access to funds without prior parliamentary approval, and is specifically designated for urgent situations such as natural disasters or emergencies.
What are the types of Consolidated Fund?
The Consolidated Fund typically refers to a single fund within a country's governmental financial structure. However, in some contexts, the term "Consolidated Funds" might refer to various funds consolidated together for reporting or accounting purposes. In such cases, the types of Consolidated Funds can vary based on the specific entities or accounts being consolidated. These may include funds from different government departments, agencies, or sources of revenue, all combined into a single consolidated view for financial reporting and analysis.
Who gets Salary from Consolidated Fund?
Salaries for various high-ranking officials and dignitaries are paid from the Consolidated Fund. These include individuals such as the President, the Speaker and Deputy Speaker of the Lok Sabha, the Chairman and Deputy Chairman of the Rajya Sabha, as well as salaries and allowances for Supreme Court judges, among others. Additionally, pensions allocated to Supreme Court and High Court judges are also drawn from the Consolidated Fund.
Why is Consolidated Fund important?
The Consolidated Fund is of utmost importance as it serves as the central repository for all government revenues and expenditures. It ensures that all legitimate disbursements on behalf of the government are facilitated transparency and accountability. By centralising government finances, it enables effective management and allocation of resources while upholding financial discipline. Additionally, the strict parliamentary authorization required for withdrawals from the Consolidated Fund ensures oversight and accountability in the utilisation of public funds, safeguarding against misuse or unauthorised expenditure. Overall, the Consolidated Fund plays a crucial role in maintaining the financial integrity and stability of the government.
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