Government Tweaks Spending Norms For Contingency Fund

Government has effected some changes in spending norms for Contingency Fund of India (CFI), enabling 40 per cent of the total corpus to be at the disposal of the expenditure secretary.

The last budget had proposed to enhance the CFI from Rs 500 crore to Rs 30,000 crore through the Finance Bill.

"An amount equivalent to 40 per cent of the Fund corpus shall be placed at the disposal of the secretary, ministry of finance, department of expenditure for the purpose of meeting unforeseen expenditure, and beyond this limit, all further contingency fund releases shall be made with the approval of secretary to the Government of India, department of economic affairs, after the approval of secretary to the government of India, department of expenditure,” a notification said.

CFI is held by the department of economic affairs on behalf of the President of India and it can operated only through executive action.

This is fund is mainly used for disasters and other such unforeseen expenditures. Its limit can be hiked through the Finance Bill when Parliament is in the session, or through an Ordinance if the House is not in session and situation warrants. Withdrawal from the fund takes place with the approval of the secretary of department of economic affairs, as per the provisions of the Contingency Fund of India Act, 1950.

Applications for advances required shall be made to the expenditure secretary and applications for advances of new loans shall be made to the economic affairs secretary, the notification added.