The ministry comprises of five departments: Economic affairs,
disinvestment, financial services, expenditure, revenue.
Government has consolidated fund, contingency fund and public
account of India to manage its finances. Money from the
consolidated fund can be withdrawn only after parliament's
approval. the money from the contingency fund can be withdrawn
in an emergency but needs parliaments approval later. Public
account is for transactions of government and no legislative
Department of Economic affairs:
Responsible for preparation of Union budget,
budget of states under Presidents rule and Union territories.
The budget is sanctioned through the appropriation
bill which contains all demand for grants. this
bill cant be altered and needs to be passed. Each ministry has
one demand for grant but large ministries can have multiple
A finance bill is a money bill presented to impose taxation.
It is accompanied with a memorandum explaining its provisions.
The procedure of getting budget passed takes two months so for
temporary arrangement of finance a vote of account is done.
Appropriation bill is passed by Lok Sabha approving allocation
of funds to meet two months of expenditure.
Infrastructure Financing in India
Infrastructure Debt Funds:
To channel long term stable finance towards infrastructure
projects these funds have been allowed. the income from
these shall be tax free. the interested parties who can
invest are offshore institutional investors, high net worth
individuals and domestic institutional investors. the IDF
can be setup as a NBFC or a trust.
Real estate investment trust and infrastructure
Special mutual funds for financing long term real estate or
infrastructure projects. High net worth investors can invest
in these. they provide low cost finance to such projects.
National investment and infrastructure fund
To be created by the government for maximizing the impact
of commercially viable projects. NIIF would invest in equity
or related products of NBFC that finance infrastructure
Foreign investment promotion board
Single window clearance for FDI proposals with the
secretary to the Dept of Economic affairs as the chairman
and secretaries of other ministries like external affairs,
overseas affairs, small scale industries as members.
Experts from trade, industry and commerce or
representatives from financial institutions too are invited.
FDI from NRI investments is handled by Dept of Industrial
policy and promotion.
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