Public Accounts Committee (PAC)

Context

The Public Accounts Committee (PAC) is one of the most important financial committees of the Indian Parliament. It ensures legislative control over public expenditure by examining whether the government has spent public money in accordance with parliamentary approval and established financial rules.

Background

1. The PAC was first established in 1921 under the Government of India Act, 1919.
2. It is one of the oldest parliamentary committees in India.
3. After the Constitution came into force in 1950, it became a parliamentary committee functioning under the control of the Lok Sabha Speaker.

Composition of the PAC

1. Total membership: The committee consists of 22 members.
2. Fifteen members are elected by the Lok Sabha from among its members.
3. Seven members are elected by the Rajya Sabha from among its members.
4. Members are elected annually through proportional representation by means of the single transferable vote.
5. The members generally serve for one year, and the committee is reconstituted every year.
6. The Lok Sabha Speaker appoints the chairperson from among the Lok Sabha members of the committee.
7. Since 1967, the chairperson has conventionally been appointed from the Opposition.
8. A Minister cannot be a member of the PAC. If a member is appointed as a Minister, they cease to be a member of the committee.

Functions of the Public Accounts Committee

1. Examination of Appropriation Accounts: The PAC examines whether money granted by Parliament has been spent for the purposes for which it was authorised.
2. Examination of Finance Accounts: It examines the annual Finance Accounts of the Union Government to assess government receipts and expenditure.
3. Scrutiny of CAG reports: It examines reports of the Comptroller and Auditor General (CAG), particularly those relating to government expenditure and revenue receipts.
4. Financial propriety: It checks whether public money has been used economically, efficiently and for authorised purposes.
5. Examination of excess expenditure: It examines cases where government departments spend more than the amount approved by Parliament.
6. Review of savings: It examines significant savings arising from inaccurate estimates or procedural deficiencies.
7. Accountability of ministries: It can call government officials and representatives of ministries to explain irregularities or shortcomings identified during examination.

Role of the CAG in the PAC

The Comptroller and Auditor General of India plays an important supporting role in the functioning of the PAC.

1. Audit reports: The CAG audits government expenditure and submits reports to the President or Governor, who causes them to be laid before the respective legislature.
2. Technical assistance: The CAG assists the PAC in examining audit findings and understanding financial irregularities.
3. Examination of evidence: The CAG helps verify facts and figures submitted by government departments.
4. The PAC uses CAG reports to identify important issues and examine the action taken by the executive.

Mechanism

1. Government departments incur expenditure after receiving parliamentary authorisation.
2. The CAG audits government accounts and prepares audit reports.
3. The reports are submitted to the President and laid before Parliament.
4. The PAC examines selected audit findings and calls officials for explanations.
5. The PAC submits its recommendations to Parliament, and the government is expected to take corrective action.

Difference Between the Three Financial Committees

Limitations of the PAC

1. Advisory nature: The PAC makes recommendations but cannot directly impose penalties or execute corrective measures.
2. Post-expenditure scrutiny: It primarily examines expenditure after it has occurred and cannot prevent every financial irregularity in advance.
3. Dependence on the executive: It relies on ministries and departments to provide information and implement its recommendations.
4. Limited time: The large volume of government expenditure and audit reports makes detailed scrutiny of every issue difficult.
5. Political constraints: Party considerations and differences among members can sometimes affect the committee’s deliberations.
6. Delayed action: Delays in submitting Action Taken Notes and implementing recommendations can weaken parliamentary oversight.

Significance of the PAC

1. Parliamentary control: It strengthens Parliament’s control over public expenditure and ensures that the executive remains accountable to the legislature.
2. Transparency: It promotes transparency by examining irregularities in the use of public funds.
3. Financial discipline: It discourages wasteful expenditure and encourages departments to follow financial rules.
4. Good governance: It helps identify administrative weaknesses and improve the implementation of government programmes.
5. Public trust: It strengthens citizens’ confidence in the responsible use of taxpayers’ money.

Way Forward

1. Time-bound action: Ministries should submit Action Taken Notes and implement PAC recommendations within specified timelines.
2. Stronger follow-up: Parliament should strengthen mechanisms to monitor the implementation of PAC recommendations.
3. Better audit capacity: The PAC should receive adequate research, technical and professional support to examine complex financial matters.
4. Greater transparency: The committee’s reports and follow-up on recommendations should be made easily accessible to citizens.
5. Non-partisan functioning: Members should prioritise public financial accountability over party considerations.

FAQs

Q1. What is the Public Accounts Committee?

Ans: The PAC is a parliamentary committee that examines government expenditure to ensure that public money has been spent according to parliamentary authorisation and financial rules.

Q2. When was the PAC established in India?

Ans: It was first established in 1921 under the Government of India Act, 1919.

Q3. How many members are there in the PAC?

Ans: It consists of 22 members, including 15 from the Lok Sabha and 7 from the Rajya Sabha.

Q4. Who appoints the chairperson of the PAC?

Ans: The Lok Sabha Speaker appoints the chairperson from among the Lok Sabha members of the committee.

Q5. Why is the PAC chairperson generally from the Opposition?

Ans: Since 1967, a convention has been followed of appointing an Opposition member as chairperson to strengthen legislative scrutiny of government expenditure.

Q6. Can a Union Minister become a member of the PAC?

Ans: No. A Minister cannot be a member of the PAC.