Contingency Fund

Article 267, Constitution of India 1950

(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 authorisation 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 or Rajpramukh of the State to enable advances to be made by him out of such Fund for the purposes of meeting unforeseen expenditure pending authorisation of such expenditure by the Legislature of the State by law under article 205 or article 206.

Draft Article 248B was discussed on 4 August 1949 and 13 October 1949. It was not initially included in the Draft Constitution of India 1948.  It was proposed by a Member in the Constituent Assembly. It read:

“Contingency Fund

(1) Parliament may be 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 be advanced by him for the purpose of meeting unforeseen expenditure which has not been authorised by Parliament pending authorisation of such expenditure by Parliament  by law under article 95 or article 96 of the Constitution.

(2) The legislature of a State may be 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 which sums as may be determined by such law and the said Fund shall be placed at the disposal of the Governor to be advanced by him for the purpose of meeting unforeseen expenditure which has not been authorised by the legislature of the State pending authorisation of such expenditure by the legislature of a State under article 180 or article 181 of this Constitution.”

The Draft Article empowered the Union and State legislatures to establish a Contingency Fund for meeting unexpected expenditure. The President or the Governor as the case may be would handle the fund.

The Member recommended the introduction of this Draft Article to enable the Union and State executives to meet unexpected or urgent expenditure that did not have legislative approval. He cited the example of a similar fund in the United Kingdom. Another Member supported this Draft Article and felt that the financial provisions in the Constitution would be incomplete without a contingency fund.

There was no further discussion.

The Draft Article was adopted on 4 August 1949.