The Central Treasury acts as the custodian of the state’s financial assets and the nerve center for all government financial transactions. While individual ministries focus on executing policy programs, the Central Treasury manages the aggregate cash inflows and outflows of the entire nation, ensuring the state remains liquid and financially solvent.

Tax revenues and external loan payouts flow into government accounts irregularly, while expenditures like civil service salaries occur on fixed, predictable schedules. To prevent temporary cash crunches, the Treasury uses short-term cash flow forecasting models. It projects cash positions on a daily, weekly, and monthly basis. If a cash shortfall is anticipated, the Treasury schedules short-term borrowing; if a temporary cash surplus occurs, it invests the excess funds in low-risk interest-bearing instruments.

The Consolidated Fund, often called the Exchequer Account, is the primary bank account of the state held at the Central Bank. By law, all revenues raised or received by the government must be paid into this fund. No money can be withdrawn from the Consolidated Fund unless the withdrawal has been authorized by an Appropriation Act passed by parliament and approved by an independent Controller of Budget.