Public Accounts Committee: Parliament's Financial Watchdog

Overview

The Public Accounts Committee (PAC) is one of the most important parliamentary committees in India's democratic framework. It serves as the financial watchdog of Parliament, ensuring that public funds are utilized legally, efficiently, and for intended purposes.

Genesis and Evolution

• Established: 1921, following the Montague-Chelmsford Reforms
• Post-Constitution: Evolved into a full-fledged parliamentary committee after 1950
• Convention since 1967: The Chairman of PAC is appointed from the Opposition party, strengthening democratic accountability

Composition

Key Points

• Ministers are NOT eligible to be members, ensuring independence
• Members are elected annually
• Chairman is traditionally from the Opposition

Core Functions

The PAC performs the following critical functions:

1. Examines the Appropriation Accounts and Finance Accounts
2. Reviews reports of the Comptroller and Auditor General (CAG)
3. Ensures public funds are used legally and efficiently
4. Verifies expenditure is within sanctioned amounts
5. Identifies cases of financial irregularities and wasteful expenditure
6. Recommends corrective and disciplinary measures

Scope of Examination

The PAC goes beyond mere legality checks and evaluates:

• Efficiency of government expenditure
• Economy in resource utilization
• Propriety of financial decisions
• Cases of financial irregularities
• Wasteful expenditure and losses
• Measures to prevent recurrence

Role in Excess Expenditure

When government spending exceeds Parliament-sanctioned amounts:

• PAC examines the reasons for such excesses
• Submits recommendations for regularization
• Article 115 of the Constitution governs regularization of such expenditure

Relationship with CAG

• CAG's audit reports form the basis of PAC's work
• CAG is regarded as the "friend, philosopher, and guide" of the Committee
• CAG conducts audits covering:
• Accountancy
• Regularity
• Propriety
• Performance

Monitoring Mechanisms

• Action Taken Notes/Reports (ATNs/ATRs) must be submitted by government (generally within 6 months)
• Audit Para Monitoring System (APMS) introduced to:
• Monitor ATNs/ATRs
• Reduce pendency of recommendations

Constitutional References

Significance

The PAC acts as Parliament's financial watchdog, promoting:

• Transparency in government spending
• Accountability of the executive
• Prudent use of public money
• Financial discipline in administration

It helps Parliament manage the complexity of financial oversight in a modern administrative state.