By its very nature, Parliament, as a body cannot have an effective control over the government and the whole gamut of its activities. Administrative accountability to the legislature through Committees has been the hallmark of our political system. In a parliamentary democracy like that of India, the Committee system assumes great importance. Administrative accountability to the legislature becomes the sine qua non of such a parliamentary system. The check that Parliament exercises over the executive stems from the basic principle that Parliament embodies the will of the people and it must, therefore, be able to supervise the manner in which public policy laid down by Parliament is carried out. . In this article, we will understand the composition and functioning of the Public Accounts Committee.
The Public Accounts Committee (PAC) was first set up in 1921 in the wake of the Montague-Chelmsford Reforms. The Finance Member of the Executive Council used to be the Chairman of the Committee. The Secretariat assistance to the Committee was rendered by the then Finance Department (now the Ministry of Finance). This position continued right up to 1949. During the days of the Interim Government, the then Finance Minister acted as the Chairman of the Committee, and later on, after the attainment of Independence in August, 1947, the Finance Minister became the Chairman. This naturally restricted the free expression of views and criticism of the Executive. The Committee on Public Accounts underwent a radical change with the coming into force of the Constitution of India on 26 January, 1950, when the Committee became a Parliamentary Committee functioning under the control of the Speaker with a non-official Chairman appointed by the Speaker from among the Members of Lok Sabha elected to the Committee. The Minister of Finance ceased to be a Member of the Committee vide Rule 309(i) of the Rules of Procedure and Conduct of Business in Lok Sabha
PAC is one of the parliamentary committees that examine the annual audit reports of CAG, which the President lays before the Parliament of India. Those three reports submitted by CAG are:
- Audit report on appropriation accounts
- Audit report on finance accounts
- Audit report on public undertakings
The Public Accounts Committee examines public expenditure. That public expenditure is not only examined from a legal and formal point of view to discover technical irregularities but also from the point of view of the economy, prudence, wisdom, and propriety. The sole purpose to do this is to bring out cases of waste, loss, corruption, extravagance, inefficiency, and nugatory expenses.
Constitution of PAC:
The Public Accounts Committee is now constituted every year under Rule 308 of the Rules of Procedure and Conduct of Business in Lok Sabha. The Public Accounts Committee consists of not more than 22 members comprising of 15 members elected by Lok Sabha every year from amongst its members according to the principle of proportional representation by means of single transferable vote and not more than 7 members of Rajya Sabha elected by that House in like manner.
Till 1966-67, a senior member of the ruling party used to be appointed by the Speaker as Chairman of the Committee. In 1967, however, for the first time, a member from the Opposition in Lok Sabha, was appointed as the Chairman of the Committee by the Speaker. This practice continues till date. The term of office of members of the Committee does not exceed one year at a time. A Minister is not elected a member of the Committee, and if a 2 member, after his election to the Committee is appointed a Minister, he ceases to be a member of the Committee from the date of such appointment. The Chairman of the Committee is appointed by the Speaker from amongst the members of the Committee from Lok Sabha.
Functions of the Public Accounts Committee:
The functions of the Committee, as enshrined in Rule 308(1) of the Rules of Procedure and Conduct of Business in Lok Sabha, include examination of accounts showing the appropriation of sums granted by Parliament for the expenditure of the Government of India, the annual finance accounts of the Government and such other accounts laid before the House as the Committee may think fit. In scrutinising the Appropriation Accounts of the Government of India and the Report of the Comptroller & Auditor General of India thereon, the Committee has to satisfy:
(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.
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 Comptroller and Auditor General 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 and 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 Comptroller and Auditor General in cases where the President may have required him to conduct an audit of any receipts or 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 shall examine with 3 reference to the facts of each case the circumstances leading to such an excess and make such recommendation as it may deem fit.
Nature and Scope of Examination:
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
(i) money recorded as spent against the grant must not be more than the amount granted,
(ii) 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 other, and
(iii) 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 functions of the Committee extent “beyond the formality of expenditure to its wisdom, faithfulness and economy”. 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 principle and system is a leading and recognized function of the Committee.
The Committee is not concerned with questions of policy in the broad sense. As a rule, it expresses no opinion on points of general policy, but it is within its jurisdiction to point out whether there has been extravagance or waste in carrying out that policy.
Regularisation of Excesses over Grants:
If any money has been spent by the Government on a service in excess of the amount granted by the House for the purpose, the Committee examines with reference to the facts of each case, the circumstances leading to such an excess and makes such recommendations as it may deem fit. Such excesses are thereafter required to be brought up before the House by Government for regularization in the manner envisaged in Article 115 of the Constitution. To facilitate speedy regularization of such excess expenditure by Parliament, the Committee presents a consolidated report relating to all Ministries/Departments in advance of other reports.
Working of the Committee:
The representatives of the Ministries/Departments appear before the Committee when examining the Accounts and Audit Reports relating to them. The Committee proceeds by way of examining of witnesses. The Comptroller and Auditor General (C&AG) is the “friend, philosopher and guide” of the Committee. The C&AG attends the sittings of the Committee and assists it in its deliberations.
The Committee may appoint one or more Sub-Committees/Sub-Groups to examine any particular matter. At the beginning of its term, the Committee appoints a few Working Groups/Sub-Committees to facilitate the examination of the various Accounts and Audit Reports and Sub-Committee to consider the action taken by the Government on the recommendations made by the Committee in its earlier Reports. If it appears to the Committee that it is necessary for the purpose of its examination that an on-the-spot study should be made, the Committee may, either in its entirety or by dividing itself into Study Groups, decide to undertake tours to make an on-the-spot study of any project or establishment.
All discussions held during tour by the Committee/Study Groups with the representatives of the establishment, Ministries/Departments, non-official organizations, Labour Unions, etc. are treated as confidential and no one having access to the discussion, directly or indirectly is to communicate to the Press or any unauthorized person, any information about matters taken up during the discussions.
Limitations of the Public Accounts Committee
Though the committee is empowered to act upon the audit reports of the CAG, and also to keep a tab on the union government’s expenses, there are still a few limitations on it which it should adhere to. The limitations of the Public Accounts Committee are given below:
- Broadly, it cannot intervene in the questions of policy
- It can keep a tab on the expenses only after they are incurred. It has no power to limit expenses.
- It cannot intervene in matters of day-to-day administration.
- Any recommendation that the committee makes is only advisory. They can be ignored by the ministries.
- It is not vested with the power of disallowance of expenditures by the departments.
- Being only an executive body; it cannot issue an order. Only the Parliament can take a final decision on its findings.
Controversies at PAC:
Over the last few decades, the PAC’s operation has alternated between consensus and disagreement.
- In 2010 and 2011, then-PAC Chairman Murli Manohar Joshi attempted to force through a contentious report on the 2G scandal, threatening to call then-Prime Minister Manmohan Singh, which sparked outrage among Congress members.
- While the PAC cannot finalise any report without unanimous agreement, the Chairman’s job has often been a source of contention.
- To minimise political turmoil, it is believed that each PAC should focus on policy administration rather than policy itself, because each functions in a particular political environment and faces difficulties unique to the legislative it represents.
- A BJP member of the panel wrote to Lok Sabha Speaker Sumitra Mahajan, expressing dissatisfaction with PAC Chairman K V Thomas’s comments that the panel could call Prime Minister Narendra Modi to explain the demonetisation issue if it was not satisfied with the response of RBI Governor Urjit Patel and top finance officials.
Conclusion:
Executive accountability to Parliament, in essence, to the people of India, is the guiding mantra of the system of parliamentary democracy that we have adopted for ourselves as a nation. The answerability of the executive to the people is enshrined in our Constitution and has been reinforced through precedents and procedures that the legislature has been devising from time to time. The success of a parliamentary democracy depends upon the enforcement of accountability of the Executive to the Legislature. There are several instruments available to enforce accountability of the Executive to Parliament. This includes the Question Hour, raising of matters and having discussions under various rules of the House, and above all, the committee system. The Public Accounts Committee (PAC) is a parliamentary committee that examines all associated financial records, including reports given by the Auditor-General, to hold government institutions accountable for the use of public monies and resources. The Public Accounts Committee examines the accounts showing the appropriation of sum of money granted by Parliament for the expenditure of the Union Government, the Annual Financial Accounts of Government of India and such other accounts laid before Parliament with their respective Audit Reports as the Committee may deem appropriate.