UPSC Prelims 2004 Q1: Indian Economy – Fiscal Policy & Budget
With reference to Indian Public Finance, consider the following statements:
1. Disbursements from Public Accounts of India are subject to the Vote of Parliament.
2. The Indian Constitution provides for the establishment of a Consolidated Fund, a Public
Account and a Contingency Fund for each State.
3. Appropriations and disbursements under the Railway Budget are subject to the same form of
Parliamentary control as other appropriations and disbursements.
Which of these statements given above are correct?
- (a) 1 and 2
- (b) 2 and 3
- (c) 1 and 3
- (d) 1, 2 and 3
Answer: (b) 2 and 3
Explanation
Indian public finance: Public Account, State funds and Railway Budget
| Statement | Verdict |
|---|---|
| 1. Disbursements from the Public Account need Parliament's vote | False: they are not subject to the vote of Parliament |
| 2. Consolidated Fund, Public Account and Contingency Fund for each State | True — Articles 266 and 267 apply to States |
| 3. Railway Budget has the same parliamentary control | True — appropriations are voted like others |
Statements 2 and 3 are correct. Money in the Public Account, such as provident funds, is spent without a vote of Parliament.
Answer: (b) 2 and 3.
Why each option is right or wrong
- (a) Incorrect. Statement 1 is false because Public Account is outside the vote.
- (b) CORRECT. Statements 2 and 3 are correct.
- (c) Incorrect. Statement 1 is false.
- (d) Incorrect. Statement 1 is false.
Key point
Three funds: Consolidated Fund (vote needed), Public Account (no vote), Contingency Fund (advance).
Remember
Disbursements from the Public Account do not require a parliamentary vote.
Common mistakes
- Thinking every disbursement of the Union needs Parliament's vote.
- Forgetting that the three funds exist for States too.
- Believing the Railway Budget has special immunity from control.
Exam tip
Public Account of India: provident funds, small savings, deposits; spent by executive without vote.
Sources
- Constitution of India — Articles 266 and 267
- Constitution of India — Articles 112 and 114 (annual financial statement; appropriation Bills)