Q. With reference to the Union Government, consider the following statements:

  1. The Department of Revenue is responsible for the preparation of Union Budget that is presented to the Parliament.
  2. No amount can be withdrawn from the Consolidated Fund of India without the authorization from the Parliament of India.
  3. All the disbursements made from Public Account also need the authorization from the Parliament of India.

Which of the statements given above is/are correct?

  • 1 and 2 only
  • 2 and 3 only
  • 2 only
  • 1, 2 and 3

Answer: (c) 2 only

Notes:
  • Union Budget:
    • Article 112 to the Indian Constitution defines the term ‘Financial Statement‘ also referred to as the Union Budget.
    • It is the statement of the estimated receipts and expenditure of the government for that particular year.
    • It is now presented on the 1st of February instead of the last day of February so that sufficient time is there for the budget provisions to get materialized.
      • 2017 onwards, the Railway Budget got merged with the Union Budget.
    • The responsibility of the budget is given to the Budget Division of the Department of Economic Affairs in the Finance Ministry.
  • Department of Economic Affairs:
    • This is the nodal agency for formulating the economic policies and programs of the Union Government that influence the domestic and international aspects of economic management.
    • The most significant role of the department is the preparation of the Union Budget.
  • Department of Revenue:
    • This department looks into the matters relating to the Direct and Indirect Union Taxes.
    • The Central Board of Direct Taxes (CBDT) and the Central Board of Indirect Taxes and Customs (CBIC) works under the supervision of the Department of Revenue.
  • Department of Financial Services:
    • The financial services provided by the institutions like banks, insurance companies, etc. come under the Department of Financial Services.
    • The Pension Fund Regulatory and Development Authority (PFRDA) works under the supervision of the Department of Financial Services.
  • Department of Expenditure:
    • It is the nodal agency for supervising the Public Financial Management System (PFMS) and matters connected with the finances.
    • The National Institute of Financial Management (NIFM), Faridabad is under the administrative control of the Department of Expenditure.
Public Account of India
  • Public Account of India is a constitutionally created fund, under Article 266(2) to park certain specially mobilised financial resources of the central government.
  • All other public money (other than those which are credited to the Consolidated Fund of India) received by or on behalf of the Government of India shall be credited to the Public Account of India.
  • The Public Account is where funds held in trust by the government are stored, such as Provident Funds, Small Savings collections, and revenue put aside for spending on specific projects.
  • Public Accounts includes provident fund deposits, judicial deposits, savings bank deposits, departmental deposits, remittances and so on.
  • This account is operated by executive action, that is, the payments from this account can by made without parliamentary appropriation. Such payments are mostly in the nature of banking transactions.
  • The Comptroller and Auditor General is in charge of auditing all expenditures from the Public Account of India.