Article 267 of Indian Constitution: Contingency Fund

Article 267 of Indian Constitution

Contingency Fund

(1) Parliament may by law establish a Contingency Fund in the nature of an imprest to be entitled "the Contingency Fund of India" into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the President to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorization of such expenditure by Parliament by law under article 115 or article 116.

(2) The Legislature of a State may by law establish a Contingency Fund in the nature of an imprest to be entitled "the Contingency Fund of the State" into which shall be paid from time to time such sums as may be determined by such law, and the said Fund shall be placed at the disposal of the Governor of the State to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorization of such expenditure by the Legislature of the State by law under article 205 or article 206.

Note: "The information provided above has been sourced from the official website, i.e., Indian Code. While the content has been presented here for reference, no modifications have been made to the original laws and orders" 

Under the Indian Constitution , Article 267 provides for the creation of contingency funds to handle unexpected expenses :

• Contingency Fund of India : Parliament can establish this fund which the President can use to meet unforeseen expenditures. The fund acts as an imprest, meaning it is a fixed reserve replenished as needed. Advances from this fund address urgent expenses until Parliament authorizes them under Articles 115 or 116.
• Contingency Fund of the State : Similarly, state legislatures can create their own contingency funds. These funds are at the disposal of the Governor, who can use them for unforeseen state expenses, pending legislative authorization under Articles 205 or 206.

Article 267 of Indian Constitution: Landmark Cases

Article 267 of Indian Constitution lacks any courtroom interpretations or major challenging cases . No major court rulings have emerged regarding Article 267 because its provisions have so far functioned as designed with no need for judges to intervene.

Article 267 plays a crucial role in fiscal governance:

• Financial Preparedness: It ensures that both Union and State governments have immediate access to funds for emergencies, such as natural disasters or economic crises.
• Swift Response : By allowing the executive to access these funds without prior legislative approval governments can respond promptly to urgent situations.
• Legislative Oversight : While the executive can use these funds immediately subsequent legislative authorization ensures accountability and transparency in public spending .

Article 267 of Indian Constitution: Developments and Amendments 

Over time the corpus of the Contingency Fund of India has been adjusted to meet changing fiscal needs:

• Initial Corpus: Established under the Contingency Fund of India Act, 1950 the fund initially had a corpus of ₹50 crore.
• Increase in 2005: The fund's size was increased to ₹500 crore to accommodate larger unforeseen expenditures.
• Proposal in 2021: The government proposed enhancing the fund to ₹30,000 crore reflecting the need for greater financial flexibility in emergencies.

Conclusion

The government receives authorized funds from Article 267 of Indian Constitution to handle sudden expense requirements at both Union level and state level. The ability to respond quickly to emergencies becomes feasible through contingency funding that operates under legislative oversight for accountability purposes.