Polity Simplified: Public Accounts Committee

By Sudheer Kumar K|Updated : June 18th, 2021

The Parliament scrutinises government spending and its financial performance with the help of three financial committees including public accounts committee, estimates committee and committee on public undertakings. In this blog, we will be discussing the public accounts committee in detail.

About Public Accounts Committee

  • PAC was initially set up in 1921 under the provisions of the Government of India Act of 1919. And it has been in existence since then.
  • The committee consists of 22 members:
    • 15 from the Lok Sabha &
    • 7 from the Rajya Sabha
  • PAC 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. That means, all parties get due representation in the committee and the term of office of the members is one year.
  • A minister cannot be elected as a member of the PAC.
  • The chairman of the PAC is appointed by the Speaker from amongst its members.
  • Until 1967, the chairman of the PAC belonged to the ruling party. However, since 1967 it has become a convention to select a person from the Opposition for the chairman post.

Role of the PAC

  • To examine the annual audit reports of the Comptroller and Auditor General of India (CAG), which are tabled before the Parliament by the President.
  • The CAG is empowered to submit three audit reports to the President, namely:
    • audit report on appropriation accounts,
    • audit report on finance accounts and
    • audit report on public undertakings
  • The committee probes into the public expenditure not merely from legal and procedural point of view to discover technical irregularities but also from the point of view of economy, prudence, wisdom and propriety to bring out the cases of corruption, waste, loss, extravagance, inefficiency and nugatory expenses.

The functions of the PAC in detail include:

  • PAC examines the following accounts of the Union government:
    • appropriation accounts: It compare the actual expenditure with the expenditure sanctioned by the Parliament through the Appropriation Act.
    • finance accounts: It shows the annual receipts and disbursements of the Union Government.
    • any other accounts placed before the Lok Sabha
  • While scrutinizing the appropriation accounts and the audit report of CAG on them, the PAC checks whether:
    • The money spent by the government was legally available for the applied service or purpose
    • The expenditure conforms to the authority that governs it
    • All re-appropriations have been made in accordance with the related rules
  • To examine the accounts and the audit report of CAG on them of:
    • State corporations,
    • Trading concerns and
    • Manufacturing projects
  • To examine the accounts of:
    • Autonomous and
    • Semiautonomous bodies, the audit of which is conducted by the CAG
  • 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

Effectiveness of PAC

In the fulfillment of the above functions, the CAG acts as a guide, friend and philosopher of the PAC. Over a period, the PAC has evolved into a powerful force in the control of public expenditure. Also, the conventions developed by the PAC conforms to the greater standards of the Parliamentary democracy.

However, the effectiveness of the PAC has been limited by the following: 

  • It has no role with respect to questions of policy in broader perspective.
  • It conducts only a post-mortem examination of accounts i.e., showing the expenditure already incurred by the ministries.
  • It has no role in the matters of day-to-day administration.
  • Its recommendations are just advisory in nature and not binding on the ministries.
  • It has no authority to prohibit expenditures by departments.
  • It is not an executive body hence it cannot issue an order, only the Parliament can take a final decision on its findings.

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