What are the main Functions of the Parliamentary Committee?

(1) 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 applied or charged.

(2) That the expenditure confirms to the authority which governs it; and

(3) That every re-appropriation has been made in accordance with the provision made in this behalf under rules framed by competent authority.

It shall be the duty of the PAC to examine

(a) in the light of the report of the CAG, the statement of accounts showing the income and expenditure of State Corporations, trading and manufacturing schemes and projects together with the balance sheet 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 financing of a particular corporation, trading concern or project.

(b) To examine the statement of accounts showing the income and expenditure of autonomous bodies that audit of which may be conducted by the CAG, either under the directions of the President or by a statute of Parliament; and

(c) To consider the report of the CAG 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.

The main function of the PAC is to examine the report of the CAG in order to ascertain whether the money granted by the Parliament has been spent by the Government within the scope of the demands.

The examination of the committee extends beyond the formalities of the expenditure to its ‘wisdom, faithfulness and economy. It is the duty of the Committee among other things, to draw the attention of the Parliament to cases of improper, wasteful expenditure. It is thus to detect frauds or irregularities, malpractices, misappropriation, etc.

The Committee may send for persons, papers and records. The conclusions of the Committee are submitted to Parliament in the form of a report to enable intensive examination; the committee is nowadays taking resort to the practice of consulting study groups, dealing with specified departments such as, Defence, Railways, etc.

These study groups submit their reports to the Committee. The Committee in turn considers them and makes recommendations to the government in anticipation of the final report, which is placed before the House.

This arrangement is in response to the general criticism that by the time the public accounts are scrutinized, the issues become old and stale. A convention has evolved that the recommendations of the Committee are accepted by the Government. If, however, the government feels that a particular recommendation is not acceptable to it on certain grounds, it requests a reconsideration of the recommendation.

Most of the issues are, thus, settled through mutual discussion and exchange of views. If, however, a specific issue defies any solution in this way and the Committee and government continue to take different positions, the final arbiter is the Parliament.

In the past, a PAC headed by Mr. Buta Singh expressed its inability to submit the report on Defence purchases by the Government, saying that the Government has withheld some vital information from the Committee. This led to criticism by the Opposition Parties and the Government was forced to reply to the charges of the opposition.

Criticism against PAC

At best, the PAC probe relates to transactions completed and damage done. It conducts post-mortem examination of public accounts. According to experts, it led to decline in the importance of the PAC as auditing is done after the work is completed and nothing can be changed at that point of time.

Some say it is also a useless exercise. But the above criticism is not valid because, the recommendations by the Committee are used as a guide for both the future estimates and future policies. However, regular recurrence and ever changing pattern of official neglect or default brought to light, year after year, does suggest that the value of the PAC’s deliberations is limited.

The estimates committee

Parliamentary control over financial administration is further strengthened by the Estimates Committee. Although the parliament discusses the estimates for a fairly adequate period, it has neither the time nor the flexibility to probe into the details and technical aspects of the estimates.

Therefore, before the estimates are presented to the parliament, they were projected to scrutiny by this independent financial committee.

The idea of an Estimates Committee in India was first urged in 1937, but the proposal could not materialize. There had been the Standing Finance Committee, first created in 1921 and attached to the Finance Department of the government of India.

The Estimates Committee was first created after the inauguration of our Constitution on the suggestion of Dr. John Mathai the then Finance Minister in April 1950.

Members of the Committee

The Estimates Committee is a standing committee, and is set up every year from amongst the members of the Lok Sabha according to the principle of proportional representation by means of single transferable vote. Its functions are laid down in the Rules of Procedure and Conduct of Business in the Lok Sabha. It consists of members from Lok Sabha only.

The Chairman is appointed by the Speaker and if Deputy Speaker happens to be a member of the committee, he automatically becomes the chairman.

A Minister cannot be a member of the committee. Though the term is one year, it is renewed every year with only one third of its members retire every year and usually the same members are reelected year after year.