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Financial Committees

Introduction


Effective legislative control over government spending necessitates that the Parliament be satisfied that the appropriations have been used economically for the approved purposes within the framework of the grants. It should also conduct a thorough examination of the government's annual budget estimates in order to suggest economic and sound implementation of the plans and programmes embodied therein. Both of these functions are critical to ensuring that parliamentary oversight of government spending is insightful.


The legislature, as a whole, lacks both the energy and the time to carry out these functions. As a result, it formed three committees comprised of its members to devote themselves to these functions. These three committees are Public Accounts Committee, Estimates Committee, and Committee on Public Undertakings.



1. Public Accountants Committee

The PAC is the oldest parliamentary committee in Indian legislative affairs, and it has played a critical role in upholding the principle of accountability by overseeing public expenditure.


Founded in 1921 in the aftermath of the Montague-Chelmsford Reforms.


The Public Accounts Committee is made up of 22 members who are elected by single transferable vote according to the principle of proportional representation.

  • 15 members are elected by Lok Sabha every year from among its members.

  • 7 members from Rajya Sabha.


The Speaker appoints the Chairperson of the Committee from amongst it's members. Until 1967 the Chairperson belonged to the ruling party, however this convention underwent change and 1967 onwards the Chairperson is selected invariably from the opposition party.


A Minister is ineligible to be elected as a member of the Committee, and if a member is appointed as a Minister after being elected to the Committee, she/he ceases to be a member of the Committee as of the date of such appointment.


Members of the Committee serve for no more than one year at a time.


The Comptroller and Auditor General (CAG) assists the Committee in the examination of Accounts and Audit Reports. CAG has been described as the PAC's friend, philosopher, and guide.


Functions


  • It examines the union government's appropriation account or finance account, as well as any other account laid before the Lok Sabha.


  • To scrutinise the annual audit reports of the Comptroller and Auditor General of India (CAG), which are laid before Parliament by the President. The CAG submits three reports: one on appropriation accounts, one on finance accounts, and one on public undertakings.


Shortcoming


  • It conducts scrutiny of the expenditure already incurred . It does not have the authority to disallow departmental expenditure. It has no authority to intervene in day-to-day administration. Most importantly, its recommendations are merely advisory and are not binding on the ministries.


2. Estimates committee


The Estimates Committee has 30 members, all of whom are Lok Sabha members. Estimates Committee does not have members from Rajya Sabha . Every year, Lok Sabha members are elected from among themselves using proportional representation. A minister cannot be elected to the Estimates Committee as a member or Chairman. The Speaker appoints the chairman, who is invariably from the ruling party.


Functions


  • This committee suggests measures that could contribute to improvements in economy as well as efficiency in expenditures. It suggests policy or administrative framework changes that can be made, as well as alternative policies that can be considered. As a result, this committee is also known as the 'continuous economy committee.' This committee's work continues throughout the year, and it continues to report to the House as the examination progresses.


Shortcoming


  • It examines the budget estimates only after they have been voted by the Parliament and not before that. Its recommendations are merely advisory and are not binding. It lacks the expert assistance of the CAG which is available to the PAC.


3. Committee on Public Undertaking


The Committee on Public Undertakings is made up of 22 members from both houses of parliament, 15 from the Lok Sabha and 7 from the Rajya Sabha. These members are chosen by the members of parliament from among themselves using the principle of proportional representation and a single transferable vote, ensuring that all parties are adequately represented. The members' terms are one year. However, the chairman of this committee, who is appointed by the Lok Sabha speaker, is always a member of the Lok Sabha. A Minister cannot be elected as a member of the committee.

Functions


  • Committee on Public Undertakings examines the reports and accounts of public undertakings and also the CAG audit reports on public undertakings. It determines whether the PSU's affairs are being managed in accordance with sound business and commercial principles and practises.


Shortcoming


  • It does not look into technical matters as aIt does not look into technical matters as it’s members are not technical experts. Its recommendations are advisory in nature and are not binding.

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