PAC(Public Accounts Committee): Know all about it?

HISTORY OF PAC

The Public Accounts Committee (PAC) is the oldest Financial Committee. The PAC was setup in the year 1923 under Montagu-Chelmsford Reforms 1919. The committee was to consist of elected members only from 1950. Till then it was mere a product of rules by the Governor-General-in-Council with the sanction of Secretary of State. The Act of 1935 made a provision that the Accounts and Audits from thereon should be produced before the legislature. The Rules of Procedure then provided for the appointment of PAC.

Our Constitution provides that the reports of Comptroller and Auditor General of India should be submitted to the President of India, who shall cause them to be laid before each House of Parliament and the Parliament has continued to constitute a Public Accounts Committee to scrutinize those reports.

What is PAC?

• The Committee on Public Accounts is constituted by Parliament each year for examination of accounts showing the appropriation of sums granted by Parliament for 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).
• With the coming into force of the Constitution of India on 26th January, 1950, the Committee became a Parliamentary Committee under the control of Speaker.
• The Chairman is appointed by the Speaker from amongst its members of Lok Sabha.
• The Speaker, for the first time, appointed a member of the Opposition as the Chairman of the Committee for 1967-68. This practice has been continued since then.
• A Minister is not eligible to be elected as a member of the Committee. If a 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.

Composition of the Committee

The Committee consists of not more than 22 members comprising 15 members elected by Lok Sabha every year from amongst its members according to the principle of proportional representation by means of single transferable vote and not more than 7 members of Rajya Sabha elected by that House in like manner are associated with the Committee. It is not a Joint Committee. It is a Committee of Lok Sabha with which some members from Rajya Sabha are ‘associated’.

Functions of the Committee

The Examination of the Appropriation Accounts relating to the Railways, Defence Services, P&T Department and other Civil Ministries of the Government of India and Reports of the Comptroller and Auditor-General of India thereon as also the Reports of the Comptroller and Auditor-General on Revenue Receipts mainly form the basis of the deliberation of the Committee. In scrutinising the Appropriation Accounts and the Reports of the Comptroller and Auditor-General thereon, 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 they 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 in this behalf under rules framed by competent authority.

It shall also be the duty of the Committee to ascertain that money granted by Parliament has been spent by Government within the scope of the demand. It considers the justification for spending more or less than the amount originally sanctioned. If any money has been spent on a service in excess of the amount granted by the House for the purpose, the Committee examines with reference to the facts of each case, the circumstances leading to such an excess and makes such recommendations as it may deem fit. The functions of the Committee extend however, “beyond, the formality of expenditure to its wisdom, faithfulness and economy”. The Committee thus examines cases involving losses, nugatory expenditure and financial irregularities. While scrutinising the Reports of the Comptroller and Auditor-General on Revenue Receipts, the Committee examines various aspects of Government’s tax administration. The Committee, thus examines cases involving under-assessments, tax-evasion, non-levy of duties, misclassifications etc., identifies the loopholes in the taxation laws and procedures and makes recommendations in order to check leakage of revenue.

Working of the Committee

The representatives of the Ministries appear before the Committee when examining the Accounts and Audit Reports relating to their Ministries. The Committee proceeds by way of interrogation of witnesses. The Comptroller and Auditor General is the “friend, philosopher and guide” of the Committee. He attends the sittings of the Committee and assists it in its deliberations.

The Committee may appoint one or more Sub-Committees/ Sub Groups to examine any particular matter. At the beginning of its term, the Committee appoints a few Working Groups/Sub Committees to facilitate the examination of the various Accounts and Audit Reports and Sub-Committee to consider the action taken by the Government on the recommendations made by the Committee in its earlier Reports. If it appears to the Committee that it is necessary for the purpose of its examination that an onthe- spot study should be made, the Committee may, either in its entirety or by dividing itself into Study Groups decide to undertake tours to make an on-the-spot study of any project or establishment.

All discussions held during tour by the Committee/Study Groups, with the representatives of the establishment, Ministries/Departments, non-official organisations, Labour Unions etc. are treated as confidential and no one having access to the discussion, directly or indirectly is to communicate to the Press or any unauthorised person, any information about matters taken up during the discussions.

Reports so far presented by the Committee

Since the Committee became a Parliamentary Committee under the control of the Speaker from 26th January, 1950, it has presented 1310 Reports till 5 February, 2004 (i.e. till the dissolution of the 13th Lok Sabha). Government take action on the recommendations of the Committee and submit action taken notes to the Committee. The Committee then present an Action Taken Report after considering the views of the Government. The Government further submit an “Action Taken Statement” on the action taken by the Government on the “Action Taken Report” of the Committee. The Action Taken Statement is generally laid before the House without any further examination by the Committee. Normally, almost all the recommendations of the Committee are implemented by the Government.