The Public Accounts Committee (PAC)
The Public Accounts Committee is the oldest financial committee in the Indian Parliament, first set up in 1921 under the provisions of the Government of India Act 1919. It serves as the primary watchdog of the nation’s finances, tasked with examining the audit reports of the Comptroller and Auditor General (CAG).
The committee consists of 22 members: 15 from the Lok Sabha and 7 from the Rajya Sabha. These members are elected annually by the Parliament from amongst its members according to the principle of proportional representation by means of the single transferable vote. This ensures that all parties get due representation.
The PAC does not examine the policy of the government; it only examines whether the money was spent in accordance with the law and the specific purpose for which it was granted.
A crucial convention of the PAC is that its Chairman is appointed by the Speaker from amongst its members. Since 1967, a convention has developed whereby the Chairman of the committee is selected from the Opposition, reinforcing its role as an impartial auditor of government expenditure.
The Estimates Committee
The Estimates Committee is the largest of the three financial committees, consisting of 30 members, all of whom are drawn exclusively from the Lok Sabha. Because the Rajya Sabha has no representation in this committee, it is often viewed as a body that focuses on the executive’s efficiency in managing the budget.
The primary function of this committee is to report on what economies, improvements in organization, efficiency, or administrative reform can be effected consistent with the policy underlying the estimates. It suggests alternative policies to bring about efficiency and economy in administration. It is often referred to as a “Continuous Economy Committee.”
- It examines the budget estimates presented to the Parliament.
- It suggests measures for administrative reform.
- It checks if the money is laid out within the limits of the policy implied in the estimates.
Committee on Public Undertakings (COPU)
The Committee on Public Undertakings was created in 1964 on the recommendation of the Krishna Menon Committee. Before this, the Estimates Committee and the PAC used to examine the affairs of public sector enterprises, but the increasing number and complexity of these units necessitated a dedicated committee.
Like the PAC, this committee has 22 members (15 from Lok Sabha and 7 from Rajya Sabha). Its function is to examine the reports and accounts of public undertakings and the reports of the CAG on these undertakings. It ensures that the state-owned enterprises are being managed in a business-like manner and are not incurring unnecessary losses.
It is important to note that the committee does not examine matters of major government policy or day-to-day administration, unless they affect the financial health of the undertaking. It acts as an oversight mechanism to ensure that the taxpayer’s money invested in these companies is utilized effectively.
Key Points to Remember
- PAC: 22 members (15+7), Chairman is from Opposition.
- Estimates Committee: 30 members (all Lok Sabha), no Rajya Sabha representation.
- COPU: 22 members (15+7), established 1964 based on Krishna Menon Committee.
- Term of Office: All members serve for a term of one year.
- Ministers: A Minister cannot be elected as a member of any of these committees.
- CAG’s Role: The CAG acts as a ‘friend, philosopher, and guide’ to the PAC.
Important Facts: Comparative Overview
| Feature | PAC | Estimates Committee | COPU |
|---|---|---|---|
| Total Members | 22 | 30 | 22 |
| Lok Sabha Members | 15 | 30 | 15 |
| Rajya Sabha Members | 7 | 0 | 7 |
| Year Established | 1921 | 1950 | 1964 |
Previous Year Question Hints
Aspirants should be prepared to answer questions regarding the composition and the specific mandates of these committees. For example:
- “Why is the Estimates Committee restricted to Lok Sabha members only?” (Focus on the ‘power of the purse’ residing in the lower house).
- “What is the significance of the convention that the PAC Chairman belongs to the Opposition?” (Focus on democratic accountability and transparency).
Quick Revision Summary
- Financial committees provide legislative oversight of executive spending.
- PAC examines the legality and propriety of government expenditure.
- Estimates Committee focuses on administrative efficiency and economy.
- COPU oversees the financial health of Public Sector Undertakings.
- All members are elected via proportional representation.
- Ministers are strictly barred from joining these committees to prevent conflict of interest.
- The CAG supports the PAC significantly in its audit functions.
- These committees do not have the power to stop expenditure; they only report and recommend.
