Budget 2026: All about Public Account, common items included, its significance

Not all money reflected in the Union Budget belongs to the government; some of it is held in trust, and that trust is recorded in the Public Account. As Budget 2026 approaches, understanding the different accounts through which government finances are routed helps decode the fine print of fiscal management. One such key but often overlooked component is the Public Account, which reflects funds the government manages on behalf of others rather than money it owns.

What is a Public Account?

The Public Account of India includes funds that do not belong to the government but are held by it in a trustee capacity. These are receipts that the government is obligated to return or transfer to their rightful owners. Because the money is not the government’s own income, transactions under the Public Account do not directly affect the fiscal deficit.

Common items included in a public account

Common items under the Public Account include provident funds (such as employee contributions), small savings collections, deposits of state governments and other trust funds. When citizens invest in schemes like the Public Provident Fund or National Savings Certificates, the money comes into the Public Account. Similarly, court deposits or security deposits collected by government departments are parked here until they are repaid.

Unlike expenditure from the Consolidated Fund of India, spending from the Public Account does not require Parliament’s approval. This is because the government is merely returning or reallocating money that already belongs to others, not spending public revenue.

Significance of public account

A public account is a transparent, separate fund for handling money that the government holds in trust, acting as a banker rather than an owner. Through public accounts, the government ensures that these non-revenue funds are managed responsibly and returned to rightful owners. 

It also offers insights into savings behaviour, public trust in government-backed instruments and liquidity management. Large inflows may indicate strong household savings, while significant outflows reflect repayments or withdrawals. For policymakers, careful handling of the Public Account is crucial to maintaining credibility and ensuring that entrusted funds are available when needed.

Simply put, the Public Account acts as the government’s safe custody ledger—tracking money it holds temporarily, responsibly and with the obligation to give it back.