34



ശരാശരി 3 ചോദ്യങ്ങള്‍ എല്ലാ പരീക്ഷയ്ക്കും
ഈ അധ്യായത്തില്‍ നിന്നും ചോദിച്ചുകാണുന്നു

CHAPTER 34

FINANCIAL COMMITTEES


34.1 The Constitution of India, republican and federal in character, embodies the salient features of Parliamentary system. The scope and manner of functioning of Parliament are dictated by its size. Parliament can and does act only through the agency of the Executive enjoying its confidence.
While the initiative in finance and the formulation of policies and finance is held by the Executive, the complementary function of critical scrutiny of such policies and control of the Executive is performed by Parliament. Though Parliament itself does not govern the country, it exercises supervision over executive action in various ways through the purposive use of Parliamentary procedures and a system of Committees.
There in no Constitutional provision for the Committees of Parliament.  It is a matter of Parliamentary procedure and conduct of its business. Under Article 118 (1) of the Constitution, the Rules of Procedure and Conduct of Business of each House of Parliament have been framed and several Parliamentary Committees have been constituted under these Rules. A Parliamentary Committee is a Committee which is appointed or elected by the House or nominated by the Presiding Officer of the House and which works under the direction of the Presiding Officer and the secretariat for which is provided by the Secretariat of the House. Parliamentary Committees may be standing committees or Adhoc Committees. Adhoc Committees become functus officio as soon as they have completed their work. Standing Committees are those which are elected or nominated every year and from time to time and are permanent Committees. Important among the Standing Committees are the Financial Committees of the Lok Sabha, viz. the Public Accounts Committee, the Estimates Committee and the Committee on Public Undertakings.


Public Accounts Committee


34.2 Parliament having approved the proposals of the Executive in regard to resource mobilization and expenditure expects in due course detailed accounts duly audited by the independent Constitutional authority, the Comptroller and Auditor General of India, It is difficult, if not impossible for Parliament to examine the Accounts and Audit Reports which are complex and technical; further it cannot spare the time required for such an examination. The Committee on Public Accounts has been constituted for this purpose.
The scope and functions of the Committee on Public Accounts are set out below:
The Committee examines the 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.
In scrutinising the Appropriation Accounts of the Government of India and the Report of the Comptroller and Auditor General thereon, it is 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 reappropriation has been made in accordance with the provisions made in this behalf under rules framed by competent authority.
                It is also the duty of 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 direction of the President or by a statute of Parliament; and
(c) to consider the report of the Comptroller and Auditor General on audit of receipts and 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 examines with reference to the facts of each case the circumstances leading to such an excess and makes such recommendation as it may deem fit.
The Committee does not exercise its functions in relation to such public undertakings as are allotted to the Committee on public Undertakings.
The Committee(=PAC) looks into cases of loss, inefficiency, ineffectiveness or extravagance and calls upon the Government to explain what action, disciplinary or otherwise, it has taken to prevent recurrence. The committee may express disapproval of or pass strictures against extravagance or lack of proper control by the Government. The Committee is not concerned with the question 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, the Committee examines the system of checks and balances obtaining in the Government. It usually concentrates more on general control to secure economy and effectiveness, and leaves the question of internal administration to the Ministry concerned.




Estimates Committee

34.3 The Lok Sabha, even though it discusses the estimates for a sufficiently long period, finds nevertheless that is has neither the time nor the flexibility to discuss the details and the technical aspects of the estimates. A Committee on  Estimates was therefore constituted for this purpose in 1950.
The Committee examines such of the estimates as may seem fit to the Committee or are specifically referred to it by the House or the Speaker, with a view:
(a) to report that economies, improvements in organization, efficiency or administrative reforms, 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 within the limit of the policy implied in the estimates; and
(d) to suggest the form in which the estimates shall be presented to Parliament.
The Committee does not exercise its functions in relation to such Public Undertakings as are allotted to the Committee on Public Undertakings by the Rules of Procedure or by the Speaker.
The Committee may call for details of expenditure charged on the Consolidated Fund of India and scrutinize whether the classification of items of expenditure between ‘Voted’ and ‘Charged’ has been done strictly in accordance with the provisions of the Constitution and Acts of Parliament.
The Committee does not go into or comment on a policy approved by Parliament, but where it is established on evidence that a particular policy is not leading to the expected or desired results, or is leading to waste, it is the duty of the Committee to bring it to the notice of the House that a change in policy would be desirable. Under a direction of the Speaker, the Committee examines the estimates of Defence Ministry through a sub-Committee.



Committee on Public Undertakings

34.4 Public enterprises are financed from Public funds. It follows that they must function within the confines of public accountability. This is ensured by Parliament through the Committee on Public Undertakings which is the youngest of the Financial Committees and was set up in May 1964. Prior to the Constitution of this Committee, the Public Accounts Committee considered the Reports of the Comptroller and Auditor General on Public Undertakings and the Estimates Committee examined in general the individual undertakings and the different aspects of functioning of all Undertakings.
The functions of the Committee are:
(a) to examine the reports and accounts of the public undertakings specified in Fourth Schedule of the Rules.
(b) to examine the reports, if any, of the Comptroller and Auditor General of India 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 Committee on Estimates in relation to the public undertakings specified in the Fourth Schedule as are not covered by clauses (a), (b) and (c) above and as may be allotted to the Committee by the Speaker from time to time.
The Committee is, however, precluded from examination and investigation of any of the followings:
(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.
Every government company whose annual report is placed before the Houses of Parliament is within the purview of the Committee. In other words, all government companies incorporated under the Companies Act in which Central Government is a member could be examined by the Committee. This is not the case with the Public Undertakings established by Special Central Acts. Only those undertakings which are specifically allotted could be examined by the Committee.
The emphasis of the Committee is on providing a broad and general review of an enterprise so as to present an overall picture rather than dealing with individual mistakes.





Composition and Tenure of the Financial Committees



34.5 All the three Financial Committees of Parliament are Committees of the Lok Sabha. However, the Members of the Rajya Sabha are also associated with the Committees on Public Accounts and public Undertakings. The estimates Committee consists of 30 members entirely of Lok Sabha elected according to the principle of proportional representation by means of single transferable vote.
Estimates Committee
30 members entirely of Lok Sabha



The Committees on Public Accounts and Public Undertakings have 22 members (15 from Lok Sabha and 7 from Rajya Sabha) elected in like manner . A Minister is not elected to be a Member of a Financial Committee. If a 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.
Committees on Public Accounts and
Public Undertakings
22 members
15 from Lok Sabha
7 from Rajya Sabha


The Chairman is appointed by the Speaker from amongst the Members of the Committee. If the Chairman is absent from any sitting, the Committee chooses another Member to act as Chairman for that sitting.


The tenure 
കാലാവധിof the Committee is not to exceed one year. A convention has been established since 1956-57 that while nominating members for election, parties and groups in the House keep in view that as far as possible nearly one third of the Members retire every year and the rest of the outgoing members are returned. The Committee usually takes office on the 1st of May every year and continues up to 30th April of the following year. The Committee has got power to appoint sub-Committees and working/study groups.


Powers, Privileges and Obligations of the Committees

30.6 The powers, privileges and obligations of the Committees are derived from the Constitution, the Rules of Procedure and Conduct of Business in the Lok Sabha and the directions of the Speaker. Certain conventions have also developed over time. The Committees are empowered to send for persons, papers and records unless it is certified by the Minister concerned that disclosure of document would be prejudicial to the safety and interest of the State. The Chairman finally decides as to whether a particular document or information, which is held to be secret, need be called for from Government and whether such information or document need be made available to all the Members of the Committee. The Committee may, with the approval of the Speaker, undertake tours for on the spot study. The Committees on Public Accounts and Public Undertakings are assisted by the Comptroller and Auditor General and his representatives. Matters under examination of the Committees are not ordinarily raised in the House through questions and motions. No minutes of dissent is allowed in the Reports of the Committee .Government should report only to the Committees the action taken on their Reports. The Reports of the Committee are not generally discussed in the House. A Member of a Committee having personal, pecuniary or direct interest in any matter to be considered by the Committee has to disclose his interest to the Speaker and abide by his decision. Where the Speaker considers it inappropriate that a Member of the Committee should be associated with a Government Committee he should, if so required by the Speaker, resign the membership of the latter Committee. Under Article 105  of the Constitution, no member of a Committee shall be liable to any proceedings  in any Court in respect of anything said or any vote given by him in the Committee and no person shall be so liable in respect of publication by or under authority of Parliament of any report, paper or proceedings.
Each of these committees can be described as the parliament in miniature. They function  on non party lines and bring to bear on their work an objective examination of issues, uninfluenced by any extraneous consideration.

Sittings of the Committees

 34.7 The sittings of the Financial Committees are held within the precincts പരിസരംof  the Parliament House. The sittings are held in private. All persons other than Members of the Committees and officers of the Lok Sabha Secretariat withdraw whenever the Committees are deliberatingആലോചിക്കുന്നു. The quorum to constitute a sitting of a Committee shall be, as near as may be, one-third of the total number of Members of the Committee. As a convention the quorum is not insisted upon at the commencement of a sitting held for taking evidence as no discussions are taken at such sittings. It is necessary, however, that there should be quorum when a sitting is held to consider and adopt a draft Report or select subjects for examination or settle Programme of work, tour, etc.

Examination and Reports

34.8 At the beginning of the tenure, the Committee select subjects for examination during the year. Thereafter preliminary information is obtained from the Ministries/ Public Undertakings concerned. The Committees on Public Accounts and Public Undertakings also get Memoranda of Important Points from the Comptroller and Auditor General’s office. For examination of the subjects selected, the Committees divide themselves into convenient number of Working/Study Groups. The Committees examination is mainly at their sittings when the officials/non-officials tender evidence. In view of the autonomy of Public Undertakings the Committee on Public Undertakings take the evidence of the Management and the Administrative Ministry separately. The witnesses are expected to observe due decorum and etiquette. A verbatim record of proceedings of each sitting of the Committees/sub-Committee, where evidence is taken, is kept by the Secretariat. The proceedings of the Committee are treated as confidential. 
A procedure has been evolved whereby the Committees on Public Accounts and Public Undertakings get a feed back from the Ministries regarding the action taken on all the Audit Reports irrespective of the fact that the Committees have not considered all the issues raised in the Audit Reports in detail.
After the Committees complete the examination of a subject, conclusions and recommendations are formulated. The draft Report, after approval of the Chairman, is placed before the Committee concerned for adoption with such modification as it may make. The draft Report is also factually verified by the Audit in the case of Public Accounts Committee Reports and by the Ministry or the Public Undertaking in the case of Committees on Estimates and Public Undertakings. The Chairman authenticates the Report and presents to Lok Sabha. The Reports of the Committee on Public Accounts and Public Undertakings are also laid before Rajya Sabha by a Member of the respective Committee as authorized by the Committee/ Chairman. The Ministries concerned are required to inform Lok Sabha Secretariat of the action taken by them on the recommendations of the Committees contained in each Report within a period of six months. After considering the Action Taken Notes of the Ministries, the Committees further report to the House. Any area of divergence of views between the Committees and Government could then be raised in the House.

Committees of State/Union Territory Legislatures

34.9 The legislatures of States and Union Territories have similar committees system. There are generally separate committees on Public Accounts and Public Undertakings where there is no separate committee on Public Undertakings the committee on Public Accounts examines the accounts and consider reports relating to Public Undertakings also.



Relationship with the Comptroller and Auditor General of India


34.10 The Comptroller and Auditor General of India is regarded as a ‘friend, philosopher and guide’ of the Committees on Public Accounts and Public Undertakings. His Reports laid before the Parliament and Legislatures stand remitted to the Committee concerned. He attends the sittings of the committees of Parliament and assists them in the examination of accounts and audit reports by providing the background information and data on the basis of which audit comments were framed and included in his Reports. He is allowed by the Committees to intervene in the discussions to clarify any point. Similar assistance is given by the respective Accountants General to the State and Union Territory Committees.
There is no bar to the Committees examining matters not specifically covered by the Reports of the Comptroller and Auditor General of India. However, it is the convention that the Comptroller and Auditor General and his officers assist the Committees only when matters arising out of the Audit Reports are examined by them and for the rest they proceed on their own. Whenever the Committees desire a matter to be investigated by the Comptroller and Auditor General, they route their requests through Government and the Comptroller and Auditor General in his discretion includes the results of such investigation in his reports submitted to the President, Governor or Administrator and laid before Parliament or the Legislature as the case may be.