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What is Contingency Fund of India?
As the name suggests, the Contingency Fund of India is the emergency fund for the nation. Constituted under Article 267(1) of the Indian Constitution, the Contingency fund of India is used at a time when there is a crisis in the nation — a natural calamity, for instance — and money is required to deal with it. The Union government has its own contingency fund with a corpus of Rs 500 crore.
In 2005, the amount of the fund was raised from Rs 5 crore to Rs 500 crore. States can also opt to have their own contingency funds. The contingency fund of the Union government is at the disposal of the President of India, who releases the funds on request of the Union Cabinet, which later gets an approval from Parliament. A Parliament approval is mandatory.
After the emergency has been dealt with, the fund is reimbursed to its full capacity of Rs 500 crore. This required money comes from the Consolidated Fund of India.
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