Which of the following statements regarding State Funds under the Indian Constitution is/are correct?
1. The Consolidated Fund of the State is defined under Article 266.
2. The Contingency Fund of the State is operated by the Governor in accordance with rules made by the State Legislature.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is option 3 i.e. Both 1 and 2.
Both statements are constitutional facts. Article 266 defines the Consolidated Fund of the State, which receives all revenues, loans, and repayments. No money can be withdrawn from it without legislative approval. Article 267(2) allows for the Contingency Fund of the State, an imprest placed at the disposal of the Governor to meet unforeseen expenditures pending legislative authorization. This fund is operated by the Governor based on rules prescribed by the State Legislature, ensuring administrative flexibility during emergencies.