The Public Accounts Committee: A Pillar of Financial Oversight in India

Understanding the Public Accounts Committee (PAC)

The Public Accounts Committee (PAC) is a key parliamentary body in India tasked with examining the annual audit reports provided by the Comptroller and Auditor General (CAG) of India. This committee plays a vital role in ensuring that government spending is both transparent and accountable by thoroughly scrutinizing the use of public funds.

Establishment and Structure

Originally established in 1921 under the Government of India Act, 1919, the PAC has continued to function post-independence as one of the most significant financial committees in the Indian Parliament. The committee is composed of 22 members, with 15 from the Lok Sabha and 7 from the Rajya Sabha. These members are elected annually through proportional representation to guarantee fair representation of various political parties.

Leadership and Neutrality

To uphold neutrality and impartiality in financial scrutiny, the PAC is traditionally chaired by a member of the opposition party in the Lok Sabha. This practice helps maintain an unbiased approach in examining government expenditures.

Core Functions of the PAC

• Examines government expenditure accounts based on CAG reports, with the CAG serving as its 'friend, philosopher, and guide.'
• Ensures that public funds are used as approved by Parliament.
• Identifies wasteful spending, inefficiencies, and irregularities within government departments.
• Recommends corrective measures for improved financial management.

Limitations and Scope

While the PAC is crucial in assessing the efficiency of government spending, it does not evaluate policy decisions. Its focus is on ensuring that expenditures comply with parliamentary approvals and are executed lawfully. The committee can only make recommendations and does not hold the power to enforce them. However, its findings often influence government policies, prompting necessary corrective actions.

Significance in Financial Accountability

As a watchdog over public spending, the PAC plays a pivotal role in preventing financial mismanagement and corruption. It enhances democratic accountability by ensuring that government expenditures benefit the public interest.

Challenges Faced by the PAC

• Lacks enforcement power for its recommendations.
• Relies on CAG reports for access to government records.
• Restricted from questioning policy decisions, focusing solely on financial execution.
• Often experiences delays in reviewing financial irregularities due to bureaucratic processes.

Impact on Financial Governance

The PAC has been instrumental in exposing financial mismanagement cases, such as the 2G spectrum and coal block allocation controversies. Its recommendations have led to significant reforms in financial administration, thereby enhancing public sector accountability in India.