Magazine

English Hindi

Index

Prelims Capsule

Polity

Public Accounts Committee completes 100 Years

Public Accounts Committee completes 100 Years

Relevance:

  • GS 2 || Polity || Central Government || Parliament

Why in news?

Public Accounts Committee completes 100 Years.

Present Context:

PAC, the oldest parliamentary committee in India, is responsible for ensuring executive accountability. Congress leader in the LokSabha, AdhirRanjan Chowdhury, heads the PAC

Committee on Public Accounts:

  • The Committee on Public Accounts is constituted by Parliament each year for examination of accounts showing the appropriation of sums granted by Parliament for expenditure of Government of India, the annual Finance Accounts of Government of India, and such other accounts laid before Parliament as the Committee may deem fit such as accounts of autonomous and semi-autonomous bodies (except those of Public Undertakings and Government Companies which come under the purview of the Committee on Public Undertakings).
  • The Committee on Public Accounts is the oldest Parliamentary Committee and was first constituted in 1921.
  • The Committee consists of 22 Members, 15 Members are elected by LokSabha and 7 Members of the RajyaSabha are associated with it.
  • The Speaker is empowered to appoint the Chairman of the Committee from amongst its Members.

Origins in history:

  • The Committee on Public Accounts was founded in 1921 in the aftermath of the Montague-Chelmsford Reforms, according to the PAC website.
  • With the passage of the Constitution on January 26, 1950, the Committee became a Parliamentary Committee, reporting to the Speaker and led by a non-official Chairman nominated by the Speaker from among the LokSabha Members elected to the Committee. Even so, the Chairman was still a member of the ruling party.
  • The Congress held the position until 1967, when Swatantra Party Chairman MinooMasani took over. Since then, the PAC has always been led by an opposition member.

Origins and Types of Parliamentary Committees:

  • The institution of Parliamentary Committees, like many other aspects of Indian parliamentary democracy, has its roots in the British Parliament. The first Public Accounts Committee was established in independent India in April 1950.
  • Constitutional Provision: Article 105 (on the privileges of Parliament members) and Article 118 (on Parliament’s competence to enact rules for controlling its process and conduct of business) provide the foundation for parliamentary committees.
  • Types: Most committees are ‘standing,’ meaning they have been in existence for a long time and are normally recreated on a yearly basis; others are ‘select,’ meaning they were formed for a specific purpose, such as debating a certain bill.
    • In 1993, the Parliament established 17 Departmentally Related Standing Committees (DRSCs), which were eventually expanded to 24.
    • Members of these committees were drawn from both Houses in roughly proportion to the strength of the political parties in each chamber.
  • Allocation of Business: The chair may assign an issue to a parliamentary committee at her discretion, but this is normally done in conjunction with the leaders of the House parties.
    • After government agencies began forming their own standing committees in 1989, the practice of referring bills to committees on a regular basis began.
    • Prior to that, select committees or joint committees of the chambers were only established to thoroughly examine a few key laws.
  • The following are some of the most influential parliamentary committees in the field of finance: Finance committees are regarded as particularly influential since financial control is a crucial weapon for Parliament’s authority over the executive.
    • The Public Accounts Committee, the Estimates Committee, and the Committee on Public Undertakings are the three financial committees.

Functions of the Committee:

  • The Committee on Public Accounts scrutinizes the Appropriation Accounts of the Government of India and the reports of the Comptroller and Auditor General of India thereon.
  • While doing so,  it is the duty of the Committee  to satisfy itself:-
    • That the moneys shown in the accounts as having been disbursed were legally available for, and applicable to, the service or purpose to which have been applied or charged.
    • That the expenditure conforms to the authority which governs it;
    • That every re-appropriation has been made in accordance with the provisions made in this behalf under rules framed by competent authority.
  • It is also the duty of the PAC:
    • To examine the statement of accounts showing the income and expenditure of State Corporations, trading and manufacturing schemes, concerns and projects together with the balance sheets and statements of profit and loss accounts.
    • To examine the statement of accounts showing the income and expenditure of autonomous and semi-autonomous bodies, the audit of which may be conducted by the C&AG of India either under the directions of the President or by a statute of Parliament;
    • To consider the report of the C&AG in cases where the President may have required him to conduct an audit of any receipts and to examine the accounts of stores and stocks.
  • If any money has been spent on any service during a financial year in excess of the amount granted by the House for that purpose, the Committee examine with reference to the facts of each case the circumstances leading to such an excess and make such recommendations as it may deem fit.
  • An important function of the Committee is to ascertain that money granted by Parliament has been spent by Government within the scope of the demand.
  • The implications of this phrase are that:
    • Money recorded as spent against the grant must not be more than the amount granted;
    • The expenditure brought to account against a particular grant must be of such a nature as to warrant its record against the grant and against no others;
    • The grants should be spent on purposes which are set out in the detailed demand and they cannot be spent on any new service not contemplated in the demand.
  • The Committee thus examines cases involving losses, nugatory expenditure and financial irregularities.
  • When any case of proved negligence resulting in loss or extravagance is brought to the notice of the Committee, it calls upon the Ministry/Department concerned to explain what action, disciplinary or otherwise, it had taken to prevent a recurrence.
  • In such a case it can also record its opinion in the form of disapproval or pass strictures against the extravagance or lack of proper control by the Ministry or Department concerned.
  • Another important function of the Committee is the discussion on points of financial discipline and principle.
  • The detailed examination of questions involving principles and system is a leading and recognized function of the Committee.
  • The Committee is not concerned with questions of policy in the broad sense though it is within its jurisdiction to point out whether there has been extravagance or waste in carrying out that policy.
  • While scrutinizing the Reports of the C&AG on Revenues Receipts, the Committee examines various aspects of Government’s tax administration.
  • The Committee, thus, examines cases involving under-assessments, tax-evasion, non-levy of duties, mis-classifications etc., identifies the loopholes in the taxation laws and procedures and makes recommendations in order to check leakage of revenue.

The Importance of Parliamentary Committees:

  • Inter-Ministerial Coordination: They’re supposed to be Parliament’s face in a bunch of different departments and ministries.
    • They are in charge of investigating the requests for grants made by the ministries/departments in question, as well as examining and reporting to Parliament on relevant bills, annual reports, and long-term plans.
  • Detailed Scrutiny Instrument: Committee reports are usually exhaustive and provide accurate information on governance issues.
    • Referred-to-committee bills are returned to the House with significant added value.
    • Aside from standing committees, the Houses of Parliament form ad hoc committees to investigate and report on special topics. These committees are tasked with thoroughly analyzing a Bill and reporting back to the House.
    • They can also seek professional advice and elicit public opinion as part of their duty.
  • Mini-Parliament: These Committees are smaller groups of MPs from both Houses who represent a variety of political parties and meet throughout the year.
    • Furthermore, Parliamentary committees are not constrained by populist demands, which can obstruct parliament’s functioning.
    • The parliamentary committee works on the spirit of debate and discussion because meetings are ‘closed door’ and members are not bound by party whips.

Limitations of the Public Accounts Committee:

  • Though the committee has the authority to act on the CAG’s audit reports and to maintain track of the union government’s spending, it is subject to a few restrictions that it must follow. The Public Accounts Committee’s limits are listed below:
    • In general, it is unable to intervene in policy decisions.
    • It can only keep track of expenses after they’ve been incurred. It has no authority over spending.
    • It is unable to intervene in day-to-day administrative concerns.
    • The committee’s recommendations are purely advisory. The ministries can choose to ignore them.
    • It does not have the authority to prohibit expenditures by departments.
    • It cannot issue an order because it is simply an executive body. Only Parliament has the authority to make a final judgment on the findings.

Past controversy:

  • In 2010 and 2011, then-PAC Chairman Murli Manohar Joshi attempted to force through a contentious report on the 2G scandal, threatening to summon then-Prime Minister Manmohan Singh, which sparked outrage among Congress members.
  • While the PAC cannot finalize any report without unanimous agreement, the Chairman’s job has often been a source of contention.
  • To avoid political turmoil, it is believed that each PAC should focus on policy administration rather than policy itself, because each functions in a particular political context and faces difficulties unique to the legislative it represents.

What changes can be done?

  • Establishing New Committees: With the rising complexity of economic and technological issues, it is necessary to establish new legislative committees. For instance, the Standing Committee on National Economy will provide national economic analysis as well as resources for advising expertise, data collection, and research facilities.
  • Discussion is required: Major reports from all Committees should be debated in Parliament, particularly where there is a disagreement between the Committee and the administration. The PACs’ proposals should be given more weight, and they should be considered as the nation’s “conscience-keepers in financial concerns.”
  • Daily or time to time review:DRSCs should be examined on a regular basis, according to the National Commission to Review the Working of the Constitution (NCRWC), so that committees that have outlived their usefulness can be replaced with new ones.
  • Changing Business Rules: Apart from that, rules of procedure in both the Loksabha and the Rajyasabha should be amended so that all key Bills are referred to DRSCs so that DRSCs can complete the second reading stage in the Committee.

Mains oriented question:

What are Standing Committees of Parliament? What’s the purpose of it? To emphasize their importance, discuss their roles and functions. (200 words)