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Spending Norms for Contingency Fund Changed by the Union Government

By Ameena Ameena - Jan 26 2022

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 ₹ 500 crore to ₹ 30,000 crore through the Finance Bill.
Officials claimed the move would ensure greater administrative convenience for the government.
The thinking behind the decision seems to be the railways will now get funds for unforeseen circumstances only from the finance ministry — as the rail budget is art of the general budget.

40% of fund at disposal of expenditure secretary
Beyond this, any expense requires approval of expenditure secretary and economic affairs secretary
Beyond the 40 per cent limit, all releases from the fund will require the approval of the expenditure secretary in addition to the economic affairs secretary’s approval.
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.

This is fund is mainly used for disasters and other such unforeseen expenditures.
The Contingency Fund of India is established under Article 267(1) of the Indian Constitution.
The fund is held by the Finance Secretary (Department of Economic Affairs) on behalf of the President of India and it can be operated by executive action. The Contingency Fund of India exists for disasters and related unforeseen expenditures.
In 2005, it was raised from Rs. 50 crore to Rs 500 crore.
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.