Classification of Government Accounting in India For a specific treatment of government accounts in India. The constitution of India has clearly provided for three funds or accounts:

(l) The Consolidated Fund of India [Article 266(1)]

(2) The Public Account [Article 266(2)]

(3) The Contingency Fund of India [Article 267(1)]

These funds and accounts exist separately for the Government of India, for each State and for each Union Territory having a Legislative Assembly. There is no separate Public Account in the case of Union Territory Governments, the transactions pertaining to this account shall be booked in the Public account of the Central Government.
The Accounts of Union Territories of Delhi, Andaman and Nicobar Island, Dadra and Nagar Haveli, Lakshadweep, Chandigarh and Daman and Diu which do not have Legislative Assemblies, form part of the Accounts of the Government of India.
Compare/Differences between Consolidated Fund and Contingency Fund of India and Public Accounts can be easily understood after reading the entire article.

CONSOLIDATED FUND OF INDIA

There is both for the centre and each of the states, a consolidated fund to which all incomes received by the government are credited. These income comprise all revenues. (i) tax or non-tax; (ii) all short-term loans like the Treasury Bills and ways and means, and (3) moneys received by the government in repayment of loans it had advanced previously.
Certain expenditures like the salaries and allowances of the President, the Chief Election Commissioner, the Comptroller and Auditor General of India. the Supreme Court charged upon it. i.e..they have to paid out of regardless of legislative sanction. They are described as non-rateable items of expenditure.
All government expenditure is made from this fund, except for exceptional items met from the Contingency Fund or the Public Account.
No money can be withdrawn from this fund without the Parliament's approval. The time of withdrawal is at the time of Budget. Budget is a procedure to withdraw the generated money for useful purposes.
Non-votable Expenditure part of Consolidated Fund of India is not subjected or reduced under CUT Motions.

As per the provisions of Article 112, the following expenditure shall be expenditure charged on the Consolidated Fund of India

(i) the emoluments and allowances of the President and other expenditure relating to his office;

(ii) the salaries and allowances of the Chairman and the Dy. Chairman of the Council of States and the Speaker and Dy Speaker of the House of the People;

(iii) debt charges for which Government of India is liable including interests, sinking fund charges and redemption charges, and other expenditure relating to the raising of loans and the service and redemption of debt;

(iv) the salaries and pensions pay able in respect to judges of the Supreme Court and High Courts;

(v) the salary and pension ‘payable to the Comptroller and Auditor General of India;

(vi) any sums required to satisfy any judgment, decree or award of any court or arbitral tribunal; and

(vii) any other expenditure declared by this Constitution or by Parliament by law so charged.

Demand For Grants: Lok Sabha takes up for discussion each ministry's expenditure proposals, and this is known as demand for grants, a process that takes several weeks and spills over to the next financial year.
The Appropriation Bill is intended to give authority to Government to incur expenditure from and out of the Consolidated Fund of India. The procedure for passing this Bill is the same as in the case of other money Bills. This bill is introduced only after the general discussion on Budget proposals and the completion of voting on grants.
Vote On Account: The demand for grants takes time, and the government cannot wait for Parliament to clear the expenditure proposals of ministries before meeting its expenses from April 1. The constitution, therefore, empowers Lok Sabha to grant a vote-on-account (Article 116) so that the government can continue with the necessary expenditure into the new fiscal, before the Budget proposals actually get passed after necessary discussions. The vote-on-account normally covers the expenditure requirement of the government fortwo months.

CONTINGENCY FUND OF INDIA(Article- 267(1)

It is in the nature of an imprest i.e. money maintained for a specific purpose.
It's at disposal of President of India to make advances to meet urgent unforeseen expenditure (Like Disasters, natural calamities and business interruption) which is subjected to pending authorization by the Parliament.
If the Parliament when comes in to session and approves such expenditure, then it will transfer such equivalent amount from the Consolidated Fund to Contingency Fund so that the total corpus of the fund Rs.500 Crores remains same. But in times of emergency, this could pose a problem, especially if Parliament is not in session. Even if it is meeting, it takes time to prepare the relevant bill and obtain its clearance.
The funds are added to this account with prior approval from Parliament.
The Corpus of the Fund was raised in 2005 the limit was raised from 50 crores to 500 crores.
The fund is held by the finance secretary on behalf of the President of India and it can be operated by executive action.

Contingency Fund of each State Government is established under Article 267(2) of the Constitution – this is in the nature of an imprest placed at the disposal of the Governor to enable him/her to make advances to meet urgent unforeseen expenditure, pending authorization by the State Legislature. Approval of the Legislature for such expenditure and for withdrawal of an equivalent amount from the Consolidated Fund is subsequently obtained, whereupon the advances from the Contingency Fund are recouped to the Fund. The corpus varies across states and the quantum is decided by the State legislatures.

PUBLIC ACCOUNT OF INDIA ARTICLE -266(2)

Public Account mentioned under Article 266 (2) of the Constitution and receives money from accounts mentioned other than in Consolidated Fund of India.
Parliamentary authorization for payments from the Public Account is therefore not required.
Receipts under this account mainly flow from the sale of Savings Certificates, contributions into General Provident Fund and Public Provident Fund, Security Deposits and Earnest Money Deposits received by the Government. In respect of such receipts, the Government is acting as a Banker or Trustee and refunds the money after completion of the contract/event.

Public Account is divided into six sub-division

•Small Savings, Provident Funds etc.

•Reserve Funds.

•Deposits and Advances.

•Suspense and Miscellaneous.

•Remittances.

•Cash Balance.

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Notas sobre Consolidated, Public & Contingency Funds - Government Accounts Explained, criado por Chitaranjen Nayackh em 17-05-2015.

Consolidated, Public & Contingency Funds - Government Accounts Explained