Public Accounts Committee

Also called: PAC · Topic: Parliamentary Procedure, Committees and Privileges · NCERT: Class 11, Ch 5 "Legislature"

Meaning

The Public Accounts Committee (PAC) is a committee of 22 MPs (15 from the Lok Sabha and 7 from the Rajya Sabha). It checks the government's accounts and the CAG's audit reports to see whether public money was spent as Parliament allowed, as the law requires, and in a wise and honest way [2][6].

It matters because Parliament votes the money, but the floor of the House has no time to check how every rupee was used. The PAC does this checking after the spending. It is one of the main ways the government is made to answer to Parliament for public money.

Explanation

How the committee is formed

• Legal base: it is set up every year under Rule 308 of the Lok Sabha's Rules of Procedure and Conduct of Business [2]. Each House makes its own rules under Article 118.
• Members: 22 in total, with 15 from the Lok Sabha and 7 from the Rajya Sabha [2][6].
• Election: members are elected every year by proportional representation through the single transferable vote.
• Under this method, voters rank candidates in order of choice.

• As a result, smaller parties also win seats in line with their strength.

• Ministers cannot be members. The committee checks the government, so people from the government cannot sit on it.

• Chair: the Speaker appoints the chair. By convention since 1967, the chair is an opposition MP. A convention is a practice that is followed but is not written in law.
• Type: it is a standing committee, meaning a permanent committee whose members change from time to time. It is also a financial committee, meaning one that watches over public money.

What it examines

• Appropriation Accounts [2]: these show whether money was spent on the purpose for which Parliament voted it.
• Finance Accounts [2]: these are the government's yearly accounts of what it received and what it paid out.
• Any other accounts laid before the House that the committee thinks fit to examine [2].
• CAG's audit reports: most of the PAC's work is based on these reports.
• The CAG (Comptroller and Auditor General, Article 148) sends its audit reports to the President (Article 151).
• The President has the reports laid before Parliament.
• The PAC then takes them up.
• This is why the CAG is called the PAC's "friend, philosopher and guide".

The three tests, and excess grants

• Authority: was the money spent the way Parliament allowed?
• Legality: was it spent according to the law and the rules?
• Propriety: was it spent wisely and honestly?
• Excess grants: sometimes a ministry spends more than Parliament granted. In that case:
• the PAC first examines the extra spending;
• the Lok Sabha regularises it (makes it lawful) only after the PAC recommends this;
• Article 115 deals with such excess grants.

Limits

• Post-mortem: it looks only at money that has already been spent.
• No policy questions: it checks how the money was spent. It does not ask whether the policy behind the spending was right.
• Advisory: the government does not have to accept its findings. Ministries must still send action-taken replies, which say what they did about each recommendation.
• No power to stop spending: it cannot halt wrong spending while it is happening.

In the Constitution and practice

• Not created by the Constitution. The PAC exists under Rule 308 of the Lok Sabha Rules [2]. These rules are made under Article 118.
• Constitutional links:
• Article 148: the CAG, whose audit reports are the PAC's main input.
• Article 151: CAG reports go to the President, who has them laid before Parliament.
• Article 115: excess grants, which the PAC examines before the Lok Sabha regularises them.

• Article 105: committee proceedings share the privileges of the House.

• History:

• 1921: first set up under the Government of India Act 1919 (Montagu–Chelmsford Reforms). This makes it the oldest of the three financial committees.

• 1967: the convention of an opposition MP as chair began. The idea is that the side that does not control spending is better placed to check it.

• Committee reports in court: Kalpana Mehta v. Union of India (2018). A five-judge Constitution Bench of the Supreme Court gave this judgment on 9 May 2018 about parliamentary committee reports [5].

• In cases under Article 32 or Article 136, the Court can take judicial notice of a committee report [5]. This means the Court can accept it as an official record without separate proof.
• The report cannot be challenged or questioned in court [5].
• If the facts are in dispute, the facts in a report do not count as proved on their own. The Court decides on the evidence placed before it [5].

Don't confuse with

• Estimates Committee: it has 30 members, all from the Lok Sabha, and no Rajya Sabha members [6]. It began in 1950 on John Mathai's advice. It studies budget estimates and suggests savings, so it is called the "continuous economy committee". The PAC, by contrast, studies accounts after the money is spent.
• Committee on Public Undertakings (CoPU): it has the same 15 + 7 structure, with not more than 22 members [7]. It was set up in 1964 under Rule 312B and examines only the PSUs listed in the Fourth Schedule to the Lok Sabha Rules [7]. The PAC covers government accounts in general.
• CAG: a constitutional body (Article 148) that audits the accounts. The PAC is a parliamentary committee that examines the CAG's reports. The CAG is the PAC's "friend, philosopher and guide", not one of its members.
• Departmentally related standing committees (DRSCs): since 1993, each of these watches over a group of ministries and examines their bills, budget demands and policies [3]. The PAC works across all ministries but looks only at past spending, not at bills or policy.

Prelims Hooks

• PAC = 22 members (15 LS + 7 RS). Estimates Committee = 30, all LS. CoPU = 22 (15 LS + 7 RS) [2][6][7]. Trap: the Estimates Committee has no Rajya Sabha members.
• The PAC is formed yearly under Rule 308 of the Lok Sabha Rules. It examines Appropriation Accounts and Finance Accounts [2].
• An opposition MP as PAC chair is a convention since 1967, not a constitutional rule. The Speaker appoints the chair.
• First set up in 1921 under the GoI Act 1919. Order of origin: PAC (1921), then Estimates Committee (1950), then CoPU (1964).
• Ministers cannot be members, and members are elected by proportional representation through the single transferable vote.
• Trap: the "continuous economy committee" is the Estimates Committee, not the PAC.

Mains Points

• A tool of accountability, with an opposition chair. The PAC turns CAG audits into political accountability. It applies three tests: authority, legality and propriety. Having an opposition MP as chair is a cross-party check on how the ruling side spends money. Action-taken replies keep ministries answerable even though the findings are only advisory.
• Limits of after-the-event control.
• It works after the money is spent (post-mortem).
• It cannot question policy.
• It cannot stop wrong spending on the spot.
• Its findings are only advisory.

• Reform ideas: set a time limit for action-taken reports, debate PAC reports on the floor of the House, and give the committee more research staff.

• Part of a weakening committee system. The share of bills sent to committees fell from 60% (14th Lok Sabha) and 71% (15th) to 25% (16th) and 16% (17th) [4]. This shows a wider fall in committee scrutiny of the executive. A strong PAC is needed even more when less scrutiny happens before laws are passed.

Related concepts

• Parliamentary committee
• Standing committee
• Ad hoc committee
• Estimates Committee
• Committee on Public Undertakings

Read more

• The committee system and the financial committees