Financial control by Parliament
Topic: Parliament: Composition, Powers and Law-making · NCERT: Class 11, Ch 5 "Legislature"
Meaning
Financial control is Parliament's "power of the purse", meaning its control over the government's money. The Constitution sets the rules:
- no tax can be collected without a law (Art. 265);
- no money can be spent without Parliament's approval (Arts. 114, 266);
- the government must present a yearly budget (Art. 112).
The Lok Sabha votes on demands for grants. After the money is spent, CAG reports and the Public Accounts Committee check for misuse. By controlling money, Parliament also controls policy.
Example
The fertiliser price rise in the budget of 28 February 2002 was rolled back on 11 March 2002 after protests in Parliament. This control has weak spots. Under the guillotine (voting all remaining demands at once without debate), about 80% of budgets in the 17th Lok Sabha were passed without discussion. Audit also comes only after the money has been spent.
Don't confuse with
- Money bill: one type of bill used for money matters. Financial control is the wider power, and it includes the budget, grants, audit and committees.