Public Accounts Committee(PAC) Brief History, Role and Functions

Table of Contents

Public Accounts Committee: Relevance for UPSC

GS 2: Parliament, Indian Constitution, Executive

Public Accounts Committee(PAC): Introduction

The Committee on Public Accounts is the oldest Parliamentary Committee and was first constituted in 1921.
The Committee consists of 22 Members, 15 Members are elected by Lok Sabha and 7 Members of the Rajya Sabha are associated with it.
The Speaker is empowered to appoint the Chairman of the Committee from amongst its Members.
The PAC or any other parliamentary committee is not concerned with questions of policy in the broad sense though it is within its jurisdiction to point out whether there has been extravagance or waste in carrying out that policy.

Public Accounts Committee(PAC): Importance of Committee System in Parliamentary Democracy

The Committee system assumes great importance in Parliamentary democracy.
Parliamentary democracy would be incomplete without Parliamentary committees, as scrutiny of public accounts by the people’s representatives plays an important role in ensuring accountability, which is central to governance.
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.
However, the phenomenal proliferation of governmental activities has made the task of legislatures very complex and diversified.
By its very nature, Parliament, as a body cannot have 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.

Public Accounts Committee(PAC): About PAC

The Committee on Public Accounts enjoys a place of pride in our Committee System.
The Committee on Public Accounts is the oldest Parliamentary Committee and was first constituted in 1921.
The Committee consists of 22 Members, 15 Members are elected by Lok Sabha and 7 Members of the Rajya Sabha are associated with it.
The Speaker is empowered to appoint the Chairman of the Committee from amongst its Members.
The Committee on Public Accounts is constituted by Parliament each year for examination of accounts showing the appropriation of sums granted by Parliament for the expenditure of Government of India, the annual Finance Accounts of Government of India, and such other accounts laid before Parliament as the Committee may deem fit such as accounts of autonomous and semi-autonomous bodies (except those of Public Undertakings and Government Companies which come under the purview of the Committee on Public Undertakings.

Public Accounts Committee(PAC): Brief History of the PAC

Pre Independence Framework

The Committee on Public Accounts 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.

Radical Changes post 26 January 1950

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.
The body got more teeth post-Independence, especially after 1967 when it was decided that a Lok Sabha MP from the opposition benches will head it.

Public Accounts Committee(PAC): Conditions for Membership

Prior to the year 1954- 55, the Committee consisted of 15 members who were elected by Lok Sabha from amongst its Members.
But with effect from the year 1954-55, 7 members from the Rajya Sabha are also being associated with the Committee. 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.

Public Accounts Committee(PAC): Major Functions of the Public Accounts Committee

The Committee on Public Accounts scrutinizes the Appropriation Accounts of the Government of India and the reports of the Comptroller and Auditor General of India thereon. While doing so, it is the duty of the Committee to satisfy itself:-

that the money shown in the accounts as having been disbursed were legally available for, and applicable to, the service or purpose to which have been applied or charged;
that the expenditure conforms to the authority which governs it; and
that every re-appropriation has been made in accordance with the provisions made on this behalf under rules framed by the competent authority.
It is also the duty of the PAC:-
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 statutory rules regulating the financing of a particular corporation trading or manufacturing scheme or concern or project and the report of the C&AG thereon;
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 C&AG of India either under the directions of the President or by a statute of Parliament; and
to consider the report of the C&AG in cases where the President may have required him to conduct an audit of any receipts and to examine the accounts of stores and stocks.

Public Accounts Committee(PAC): The Importance of Parliamentary Committees

Parliamentary Committees are smaller units of MPs from both Houses, across political parties and they function throughout the year.
These smaller groups of MPs study and deliberate on a range of subject matters, Bills, and budgets of all the ministries.
Since Committees meet throughout the year, they help make up for this lack of time available on the floor of the House.
Parliament deliberates on matters that are complex and therefore needs technical expertise to understand such matters better. Committees help with this by providing a forum where members can engage with domain experts and government officials during the course of their studies.

Public Accounts Committee(PAC): Reforms needed in Public Accounts Committee

PAC may be redesignated as Public Accounts and Audit Committee given the fact that audit review is also its core function.
It should directly interact with people and take inputs from them. The more they will interact with people, the more effective and meaningful their recommendations will be.
Since PAC has to examine the effectiveness of resource use in terms of socio-economic outcomes, it may be in order for the committee to examine the issue of balancing these two objectives for wider consideration.
There should be a Committee of Chairpersons of PACs, which could have a comprehensive discussion on the working of the PACs.
There should be one common platform for PACs of Parliament and state legislatures. This will ensure better coordination and greater transparency and accountability of the Executive.
The suggestions of this committee could be discussed among the Presiding Officers for implementation to make the PACs more accountable, transparent and beneficial to the public.

Cabinet Committees