Committees Related to Budget to Assure Accountability


The Parliamentary control over public expenditure is not limited to the voting of moneys required by Government for carrying on the administration of the country but also extends to
ensuring prudent expenditure on Plans and programmes approved by Parliament for the
achievement of underlying objectives. Even though the Lok Sabha discusses Demands for Grants for a sufficiently long time yet it is almost impossible to scrutinize expenditure proposals effectively or minutely. As per Article 118 of the Constitution, each House of Parliament may make rules for regulating, subject to the provisions of Constitution, its procedure and the conduct of its business. Under these provisions and in order to help it to exercise effective control over public expenditure, Lok Sabha has set up three financial Committees viz. Public Accounts
Committee, Estimates Committee and the Committee on Public Undertakings, apart from the Department Related Standing Committees which came later on.
Parliamentary Committees figure prominently in the working of all parliamentary democracies and are increasingly serving as the principal tool of parliamentary control over Government activities. The Financial Committees in respect of budgetary process have assumed a position of great importance in implementing the principle of accountability. The three Financial Committees of Parliament play an important role in enforcing parliamentary control over public finance viz., to keep an un-remitting vigil over Government spending and performance, and bring to light inefficiencies, waste and indiscretion in the implementation of programmes and policies approved by Parliament, thereby, making the Executive accountable to the Legislature in an effective manner. In addition to these there are the Department Related Standing Committees which is responsible for the administration and scrutiny of budgetary proposals and Bills of Ministries/Departments. The roles and functions of these Committees and some other are
described in brief in the following paragraphs.
Estimates Committee
The Estimates Committee is very important in the sense that through it the House exercises
control over the administrative machinery not only on the expenditure sanctioned and incurred by various Departments of Government, but also over the general policies of the administration. As per Rule 310 of the Lok Sabha, there shall be a Committee on Estimates for the examination of such of the estimates as may seem fit to the Committee or are specifically referred to it by the House or the Speaker.
The functions of the Committee shall be:
(a) To report what economies, improvements in  organization, efficiency or administrative
reform, consistent with the policy underlying the estimates may be effected;
(b) To suggest alternative policies in order to bring about efficiency and economy in administration;
(c) To examine whether the money is well laid out with the limits of the policy implied in the
estimates; and
(d) To suggest the form in which the estimates shall be presented to Parliament.
Provided that the Committee shall not exercise its functions in relation to such Public
Undertakings as are allotted to the Committee on Public Undertakings by these rules, or by the
The Estimates Committee may continue examination of the estimates from time to time throughout the financial year and report to the House as its examination proceeds. It shall not be
incumbent on the Committee to examine the entire estimates of any one year. The Demands for Grants may be finally voted notwithstanding the fact that the Committee has made no report.
Committee on Public Undertakings
The task of exercising parliamentary scrutiny over the accounts of public corporations is
undertaken by the Committee on Public Undertakings. As per Rule 312-A of Lok Sabha, there
shall be a Committee on Public Undertakings for the examination of the working of the Public
Undertakings which are in the Fourth Schedule .
The functions of the Committee shall be:
(a) To examine the reports and the accounts of the public undertakings specified in the
Fourth schedule;
(b) To examine the Reports, if any, of the C&AG on the public undertakings;
(c) To examine, in the context of the autonomy and efficiency of the public undertakings,
whether the affairs of the public undertakings are being managed in accordance with sound business principles and prudent commercial practices; and
(d) To exercise such other functions vested in the Committee on Public Accounts and the
Estimates Committee in relation to the public undertakings specified in the Fourth schedule
as are not covered by the clauses (a), (b) and (c) above as may be allotted to the Committee by the Speaker from time to time.
Provided that the Committee shall not examine and investigate any of the following, namely:
(i) Matters of major Government policy as distinct from business or commercial functions of the public undertakings;
(ii) Matters of day to day administration; and
(iii) Matters for the consideration of which machinery is established by any special statute under which a particular public undertaking is established.
Department Related Standing Committee
In order to strengthen the parliamentary surveillance of the administration and scrutiny of
budgetary proposals and Bills a full fledged Committee system was introduced in 1993. Since
then, the Departmentally Related Standing Committees (DRSCs) of Parliament have been
playing a very significant role in assessing the Government’s policies and programmes. In this
regard, the Speaker, Lok Sabha had issued a new direction 73 A in September 2004, in order to ensure that the Ministries give more attention to the recommendations contained in the Reports of DSRCs. And, the action so taken reported by the Government is laid on the Table of the House in the form of Action Taken Statement. This system not only ensures accountability of the executive to the Parliament but also enables Parliament and the people to know about the Government’s final replies to the Committee’s specific recommendations.
The main functions of the Committee, as laid down in rule 270 of the Rule of Procedure and
Conduct of Business in the Rajya Sabha are:
(i) to consider Demands for Grants of the related Ministries/Departments and report thereon. The report shall not suggest anything of the nature of cut motions;
(ii) to examine Bills pertaining to the related Ministries /Departments referred to the Committee by the Chairman or the Speaker, as the case may be, and report thereon;
 (iii) to consider the annual reports of the Ministries/Departments and report thereon; and
(iv) to consider national basic long term policy documents presented to the Houses, if
referred to the Committee by the Chairman or the Speaker, as the case may be, and
report thereon.
Railway Convention Committee
The Railway Convention Committee is the oldest committee of Parliament which reviews the
rate of dividend which is payable by the railway undertaking to the general revenues as well as other ancillary matters in connection with the Railway Finance vis a vis General Finance. It consists of 18 Members, 12 from the Lok Sabha and 6 from the Rajya Sabha.
Public Accounts Committee
Having voted large sums of money, Parliament expects a detailed account of how the money has been spent, to satisfy itself that the money so voted were directed to intended purpose and were spend prudently and economically. It is difficult for the Parliament to examine in detail the
Accounts which are complex and technical in nature, nor does it have adequate time at its disposal for such a detailed examination. The Parliament therefore constitutes the Public Accounts Committee (PAC) and entrusts it with the detailed examination of those accounts.
As per Rule 308 of the Lok Sabha,
(1) there shall be a Committee on Public Accounts for the
examination of accounts showing the appropriation of sums granted by the House for the expenditure of the Government of India, the Annual Finance Accounts of the Government of India and such other accounts laid before the House as the Committee may think fit.
(2) In scrutinizing the Appropriation Accounts of the Government of India and the report of the
Comptroller & Auditor General thereon, it shall be the duty of the Committee to satisfy itself:
(a) That the moneys shown in the accounts as having been disbursed were legally available
for, and applicable to, the service or purpose to which they have been applied or charged;
(b) That the expenditure conforms to the authority which governs it; and
(c) That every re-appropriation has been made in accordance with the provisions made in
this behalf under rules framed by competent authority.
(3) It shall also be the duty of the Committee:
(a) 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 which the President may have required to be prepared or are prepared under the provisions of the statutory rules regulating the financing of a particular corporation, trading or
manufacturing scheme or concern or project and the report of the C&AG thereon;
(b) 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 Comptroller & Auditor General of India either under the directions of the President or by a statute of Parliament; and
(c) To consider the Report of the C&AG in cases where President may have required him to
conduct an audit of any receipts or to examine the accounts of stores and stocks.
(4) 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 shall examine with reference to the facts
of each case the circumstances leading to such an excess and make such recommendation as it may deem fit;
Provided that the Committee shall not exercise its functions in relation to such undertakings
as are allotted to the Committee on Public Undertakings by these rules or by the Speaker.
The Public Accounts Committee consists of members of both the Houses of Parliament, 15 from
Lok Sabha and 7 from Rajya Sabha, and is in the nature of a Joint Committee of Parliament. Members of the Committee are elected every year from amongst the members of respective houses according to the principle of proportional representation by means of single transferable vote. As an instrument of legislative surveillance over the Executive, the PAC has a very effective role to perform. 

Sunday, 14th Feb 2016, 12:03:09 PM

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