Question 6 from UPSC CSE 2015 - Economy

Question

With reference to the Union Government, consider the following statements:
1. The Department of Revenue is responsible for the preparation of the Union Budget that is presented to the Parliament.
2. No amount can be withdrawn from the Consolidated Fund of India without authorization from the Parliament of India.
3. All disbursements made from the Public Account also need authorization from the Parliament of India.
Which of the statements given above is/are correct?

IASCODEX · Accepted Answer

Correct Option: C. 2 only

Strategy: - Identify the Department of Economic Affairs as the body responsible for the Union Budget.
- Confirm that withdrawals from the Consolidated Fund require parliamentary approval, validating statement 2.
- Acknowledge that withdrawals from the Public Account are made by executive action, which invalidates other statements.
- Conclude that only statement 2 is correct, leading to option C.

Key Info: **Union Budget**
The Annual Financial Statement is prepared by the Department of Economic Affairs, Ministry of Finance, not the Department of Revenue.

**Consolidated Fund of India**
Established under Article 266(1), this fund holds all government revenues, loans, and loan repayments. Withdrawals require prior authorization from Parliament via the annual Appropriation Act.

**Public Account of India**
Established under Article 266(2), this account holds funds the government manages in trust. These include:
- Provident funds
- Judicial deposits
- Small savings
- Other similar deposits

Disbursements from the Public Account are made by executive action and do not require parliamentary approval, as the government acts as a banker or trustee. The distinctions between these funds are fundamental to India's system of parliamentary financial control.

IASCODEX · Answer

Option A: 1 and 2 only

IASCODEX · Answer

Option B: 2 and 3 only

IASCODEX · Answer

Option D: 1, 2, and 3