Budget 2026: Consolidated Fund of India- What it is, how it works, and why it matters in the Union Budget

As the Union Budget 2026 for the financial year 2026–27 is set to be presented in Parliament on Sunday, 1st February 2026 at 11 AM, understanding how the government manages its finances becomes crucial. The Consolidated Fund of India (CFI) serves as the central account where all government revenues are deposited, and expenditures are made, ensuring transparency, accountability, and proper allocation of public funds. 

What Is the Consolidated Fund of India?

The Consolidated Fund of India (CFI) is the most important government account, established under Article 266 of the Indian Constitution. All revenues received by the central government are credited to this fund, and most government expenditures are made from it.

These revenues include tax collections, non-tax income, and money raised through borrowings. The fund is used to meet the government’s routine administrative and developmental expenses, except for transactions handled through the Contingency Fund or the Public Account.

How does the Consolidated Fund of India work?

The Consolidated Fund of India functions as a central pool where government income is deposited and from which expenditure is incurred. It is used to meet day-to-day expenses such as salaries, infrastructure development, welfare schemes, and repayment of government debt.

Importantly, no money can be withdrawn from the Consolidated Fund without parliamentary approval, ensuring legislative oversight over public spending. This requirement helps maintain transparency, accountability, and fiscal discipline in the use of public funds.

Sources of the Consolidated Fund of India

The fund receives money from a wide range of sources. These include direct taxes such as income tax, corporate tax, and capital gains tax, and indirect taxes like GST, customs duties, and excise duties.

It also includes dividends and profits from public sector undertakings (PSUs), proceeds from the disinvestment of government-owned enterprises, repayments of loans given by the government, and various fees and charges collected for public services.

Expenditures included in the Consolidated Fund of India

Certain expenditures are classified as charged expenditures, meaning they are non-votable and do not require Parliament’s annual approval. These include the salaries and allowances of the President of India, the Speaker and Deputy Speaker of the Lok Sabha, the Chairman and Deputy Chairman of the Rajya Sabha, and judges of the Supreme Court and High Courts.

Pensions of retired Supreme Court and High Court judges are also charged on the fund. These provisions ensure the independence of key constitutional authorities.

The Consolidated Fund of India plays a crucial role in ensuring transparent, accountable, and efficient public financial management. Parliamentary scrutiny prevents misuse of funds, while charged expenditures ensure that essential constitutional obligations are always met.