PUBLIC ACCOUNTS COMMITTEE (PAC)

PUBLIC ACCOUNTS COMMITTEE (PAC)

Context

MORE ABOUT PUBLIC ACCOUNTS COMMITTEE

HISTORY OF PUBLIC ACCOUNTS COMMITTEE

The committee was first conceived in the year 1921 in the wake of Montagu-Chelmsford Reforms. During the initial days of British colonial government in India, the finance member of the executive council was the chairperson of the committee.
Post-independence, till 1950 the chairperson of the committee was the finance minister. However, in 1950, the country became republic and the committee became a parliamentary committee functioning under the control of the Speaker of Lok Sabha with a non-official chairperson.
From 1950 to 1967, the chairperson was selected from the ruling party. Since 1967, the chairperson of the committee is selected from the opposition, usually the leader of opposition.
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 have also been elected to the committee.

APPOINTMENT

The members are elected by the Parliament every year from amongst its members according to the principle of proportional representation by means of the single transferable vote. Thus, all parties get due representation in it.
The term of office of the members is one year. A minister cannot be elected as a member of the committee.

FUNCTIONS OF COMMITTEE (Ref – Indian Polity by M. Laxmikanth)

To examine the appropriation accounts and the finance accounts of the Union government and any other accounts laid before the Lok Sabha. The appropriation accounts compare the actual expenditure with the expenditure sanctioned by the Parliament through the Appropriation Act, while the finance accounts show the annual receipts and disbursements of the Union Government.
In scrutinising the appropriation accounts and the audit report of CAG on it, the committee has to satisfy itself that

The money that has been disbursed was legally available for the applied service o purpose
The expenditure conforms to the authority that governs it
Every re-appropriation has been made in accordance with the related rules

To examine the accounts of state corporations, trading concerns and manufacturing projects and the audit report of CAG on them (except those public undertakings which are allotted to the Committee on Public Undertakings)
To examine the accounts of autonomous and semiautonomous bodies, the audit of which is conducted by the CAG
To consider the report of the CAG relating to the audit of any receipt or to examine the accounts of stores and stocks
To examine the money spent on any service during a financial year in excess of the amount granted by the Lok Sabha for that purpose.

LIMITATIONS

It is not concerned with the questions of policy in broader sense.
It conducts a post-mortem examination of accounts (showing the expenditure already incurred).
It cannot intervene in the matters of day-to-day administration.
Its recommendations are advisory and not binding on the ministries.
It is not vested with the power of disallowance of expenditures by the departments.
It is not an executive body and hence, cannot issue an order. Only the Parliament can take a final decision on its findings

PROBES IN RECENT YEARS

2G spectrum case (2008)
- The Comptroller and Auditor General (C&AG) laid out in its report a seething inquest of the case, showing how then telecom minister and bureaucrats allegedly colluded to show undue favour to companies that lied or misrepresented basic information in their applications for 2G licenses.
Commonwealth Games case (2010)
- The 2010 Commonwealth Games hosted by India was subject of multiple allegations of corruption. The Public Accounts Committee has faulted the then government for taking the games management out of the government machinery leading to a “number of errors” that almost resulted in the “biggest management failure”.
Demonetisation of November 8, 2016
- On the eve of November 8, 2016, Prime Minister of India announced “Notes of ₹500 and ₹1,000 will not remain a legal tender by midnight”.
- Being an unprecedented step, it was much highlighted in the national and international news with a number of people criticizing the move and government acclaiming it as a surgical strike against black money.
- But then PAC head K. V. Thomas, member of INC, took a serious note of the move and started probing the move wherein it decided to call RBI governor Urjit Patel, Finance Secretary Ashok Lavasa and Economic Affairs Secretary Shaktikanta Das.
- The decision was taken unanimously by all the members of the committee to call the bureaucratic officers.