Insights into Editorial: PAC: watchdog for govt spending; panel of consensus, controversy

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Insights into Editorial: PAC: watchdog for govt spending; panel of consensus, controversy


 

Summary:

After asking the RBI Governor tough questions and threatening to call in the PM to explain demonetisation, Parliament’s PAC is back in the news. Though the Public Accounts Committee (PAC) is quite often referred to as a post-mortem committee, it has a significant role in India. The committee’s job of scrutinising accounts is a continuous process and it enjoys the prerogative of looking at the present as well as the future.

 Public Accounts Committee (PAC)

About PAC:

The Committee on Public Accounts was first set up in 1921 in the wake of the Montague-Chelmsford Reforms. W M Hailey was its first president, and Bhupendra Nath Mitra its first Indian president. The last president before Independence was Liaquat Ali Khan.

  • With the Constitution coming into force on January, 26, 1950, the Committee became a Parliamentary Committee functioning under the Speaker with a non-official Chairman appointed by the Speaker from among the Members of Lok Sabha elected to the Committee.
  • It is the oldest of all House panels and its job is to keep a vigil on the spending and performance of the government, to bring to light inefficiencies, wasteful expenditure, and indiscretion in the implementation of policies and programmes approved by Parliament, and to make recommendations to streamline the administration for efficient, speedy and economical implementation of policy.
  • This 22-member Committee comprises 15 members and 7 members from Lok Sabha and Rajya Sabha, respectively. No Minister is allowed to be a member of this panel. The objective behind this standard practice is to eliminate the chance of ruling party influencing or manipulating PAC’s decisions.

 

Roles & Responsibilities of the PAC:

  • Since PAC’s job is to keep a tab on where and how the public money is being spent, it has the authority to examine the accounts relating to the Railways, Defence, and other ministries.
  • It is the primary role of this parliamentary panel to assess whether the government has judiciously spent the money.
  • If it comes to the notice that there has been an overspending or underutilization of funds, the Committee examines the justifications put forward by the government and analyses the circumstances that could have caused such digressions.
  • Be it the cases of financial irregularities or tax evasion, the Committee refers and scrutinizes CAG (Comptroller and Auditor-General) reports before making its observations.

 

Importance of PAC:

The Public Accounts Committee examines the accounts of the Government. The Government expenditures are thoroughly examined and ensured that the Parliamentary limits are not breached. The Government and ministers stay alert while making expenditures because they know that the financial breaches, if any, will be revealed during the examination by P.A.C.

  • Because of the overwhelming importance of the Public Accounts Committee (P.A.C.) both the government and the opposition try to gain control over the P.A.C. The government has an inbuilt advantage in that, inevitably the majority of members of the P.A.C. belong to the ruling party.
  • But the opposition also has an advantage. It has now become a convention that the chairman of the P.A.C. is a member of the opposition. But since the chairman is nominated by the Speaker, whether an effective and assertive member of the opposition will be the chairman depends on the strict neutrality of the Speaker.
  • The independent functioning of the PAC enables it to come up with unbiased reports. The panel remains a vital entity that helps the Parliament exercise its control over the revenues and expenditures of the government.

 

Functioning of the PAC:

The panel performs a crucial exercise, which is to prepare and submit a report to the Lok Sabha on the basis of the irregularities observed. The report is then tabled in the Parliament for discussions and future recommendations. However, before the PAC starts working on the accounts details of any particular ministry, it interrogates the representative. In the process, the committee is assisted by the CAG.

  • As a mechanism for effective oversight, the public accounts committee makes recommendations to the government, following which the latter submits action taken notes to the panel.
  • In certain circumstances, the Committee appoints sub-Committees or working groups to examine specific issues.

 

Challenges:

  • Lack of consensus is the biggest problem plaguing the PAC’s functioning over the past few decades. Members from different political parties in the panel often have contradictory views over the same issue. While the PAC cannot finalise any report without consensus, the lack of consensus has frequently seen controversy over the role of the Chairman.
  • While other Department Related Standing Committees can adopt reports with dissent notes by some members, the PAC must adopt all reports by consensus. This is unique about the PAC, and helps it maintain neutrality. This has, however, led to the slow functioning of the committee in the recent past.
  • The lack of technical expertise also hinders the PAC’s examinations. Officers are sometimes able to dodge PAC summons, which has prompted suggestions that it should have the power to hand out harsher punishments.      
  • It is also argued that PAC has been reduced to being a toothless watchdog. The fault lies at the door of the government. This has resulted in shying away from accountability to Parliament and the people.

 

What needs to be done?

  • PACs have larger role in the auditing of governments’ accounts. At the moment, PAC’s procedures are not open to the media or to the public. Their procedures should be made more transparent.
  • PACs feel that their reports are not being taken seriously by the government departments at the Centre or at the States. Governments have to come out with explanations for not considering their reports seriously.
  • A broad platform should be built to share and learn from the experiences of PAC functioning and discuss, debate and find solutions to enhance the level of functioning.  
  • They should be given ‘Constitutional Status’ similar to that of the Election Commission and the Comptroller and Auditor General.
  • The panel should also be given more teeth to efficiently monitor the government spending. It should have powers to examine Public-Private Partnership projects. Services of experts should be availed on technical matters.
  • It is also felt that since each PAC operates in a specific political context and faces issues unique to the legislature it serves, its major focus should be on the administration of policy rather than policy itself, to avoid political wrangling.

 

Conclusion:

The Public Accounts Committee has kept the executive accountable to Parliament, thereby lending an additional dimension to the nation’s fiscal policies and programmes. The committee has been able to bring to light certain cases where parliamentary authority on the administration of tax laws had been diluted by the executive fiat, and other cases of the government not carrying out the intentions of Parliament as expressed in laws. Therefore, it is necessary to further strengthen the committee which leads to general efficiency of the administration.