Forest Services
Introduction: Parliamentary Committees and Fiscal Oversight
Parliamentary Standing Committees (PSCs) in India are permanent bodies constituted under Articles 105 and 118 of the Constitution. They operate year-round to scrutinise government functioning, especially financial matters that require detailed examination beyond the limited time available in parliamentary sessions. Key financial committees include the Public Accounts Committee (PAC), Estimates Committee, and Department-Related Standing Committees (DRSCs) such as the Parliamentary Standing Committee on Finance. These committees enhance fiscal governance by enabling granular oversight of budgetary allocations, expenditures, and policy implementation.
UPSC Relevance
- GS Paper 2: Indian Polity and Governance — Parliamentary Committees, Financial Oversight
- GS Paper 3: Indian Economy — Public Finance, Budgeting, Fiscal Accountability
- Essay Topics: Role of Parliamentary Institutions in Strengthening Democracy
Constitutional and Legal Framework Governing Parliamentary Committees
Article 105 and 118 of the Constitution define the powers and privileges of Parliament and its committees, providing the constitutional basis for PSCs. The Rules of Procedure and Conduct of Business in Lok Sabha (2023) — specifically Rules 331 to 337 — regulate the functioning of Department-Related Standing Committees. The Public Accounts Committee is constituted under the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971, while the Estimates Committee is established under Rule 310 of the Lok Sabha Rules. The Fiscal Responsibility and Budget Management Act, 2003 underscores the importance of fiscal discipline, indirectly reinforcing the need for parliamentary fiscal oversight.
- Article 105 and 118: Constitutional mandate for parliamentary privileges and committee powers
- Rules 331-337 (Lok Sabha Rules, 2023): Govern Department-Related Standing Committees
- Public Accounts Committee: Constituted under CAG Act, 1971 for expenditure scrutiny
- Estimates Committee: Formed under Lok Sabha Rule 310 to examine budget estimates
- FRBM Act, 2003: Emphasises fiscal responsibility, supporting oversight mechanisms
Functions and Roles of Key Parliamentary Committees in Fiscal Governance
PSCs enable detailed scrutiny of financial bills, demands for grants, and government expenditure. The Parliamentary Standing Committee on Finance reviews the budgets and expenditure of finance-related ministries, including the Ministry of Planning and NITI Aayog. The PAC examines audited government expenditure reports prepared by the Comptroller and Auditor General (CAG), focusing on compliance and efficiency. The Estimates Committee analyses budget estimates and suggests measures for economy and efficiency.
- Parliamentary Standing Committee on Finance: Reviews financial bills, budget proposals, and expenditure of finance-related ministries
- Public Accounts Committee (PAC): Examines government expenditure exceeding ₹150 lakh crore annually based on CAG reports
- Estimates Committee: Reviews demands for grants totaling over ₹40 lakh crore annually, suggests economies
- Comptroller and Auditor General (CAG): Audits government accounts and submits reports to PAC
Empirical Evidence: Fiscal Oversight and Fund Utilisation
The Parliamentary Standing Committee on Finance’s 2024 report highlighted that the Ministry of Planning and NITI Aayog spent less than 36% of their allocated funds in FY24 and FY25, indicating significant underutilisation and poor financial management. The Union Budget 2023-24 allocated ₹1,500 crore to NITI Aayog and ₹2,000 crore to the Ministry of Planning. The Economic Survey 2023-24 estimates that inefficient fund utilisation can reduce GDP growth by approximately 0.5% annually, underscoring the economic cost of fiscal mismanagement.
- Ministry of Planning and NITI Aayog expenditure below 36% in FY24 and FY25 (Parliamentary Standing Committee on Finance Report, 2024)
- Union Budget 2023-24 allocations: ₹1,500 crore to NITI Aayog; ₹2,000 crore to Ministry of Planning
- Government expenditure audited by CAG exceeds ₹150 lakh crore annually (CAG Annual Report, 2023)
- Estimates Committee reviews demands for grants over ₹40 lakh crore annually (Lok Sabha Secretariat, 2023)
- Economic Survey 2023-24: Inefficient fund utilisation causes 0.5% GDP growth loss annually
Comparative Perspective: UK Public Accounts Committee vs Indian PAC
The UK’s Public Accounts Committee (PAC) of the House of Commons exemplifies robust fiscal oversight. Empowered to summon officials and publish detailed reports, the UK PAC has driven a 15% improvement in public fund utilisation efficiency over five years (UK National Audit Office Report, 2022). This contrasts with Indian PAC’s limited enforcement powers and delayed report submissions, which constrain its effectiveness in compelling executive accountability.
| Aspect | India | United Kingdom |
|---|---|---|
| Legal Basis | Constitution Articles 105, 118; CAG Act 1971 | Parliamentary Standing Orders; National Audit Office Act |
| Committee Powers | Advisory; no binding enforcement | Power to summon officials; binding recommendations |
| Report Timeliness | Delays common; reports often late | Reports published promptly; high public visibility |
| Impact on Fund Utilisation | Limited improvement; underutilisation persists | 15% efficiency improvement over 5 years |
Challenges Limiting the Effectiveness of Indian Parliamentary Committees
Despite their constitutional mandate, Indian Parliamentary Standing Committees face structural and procedural challenges. Delays in report submission reduce their relevance in real-time fiscal decision-making. The absence of enforcement powers means recommendations are often ignored by the executive. Limited resources and part-time membership further constrain detailed scrutiny. Political partisanship occasionally undermines the non-partisan functioning of committees.
- Delays in report submission reduce oversight effectiveness
- Lack of binding enforcement powers limits executive compliance
- Resource constraints and part-time membership hamper detailed analysis
- Political considerations sometimes affect non-partisan functioning
Significance and Way Forward
Parliamentary Standing Committees are indispensable for fiscal governance, providing detailed, evidence-based oversight that parliamentary debates alone cannot achieve. Strengthening these committees requires statutory backing for enforcement powers, timely report submissions, and enhanced secretariat support. Adopting best practices from the UK PAC model, such as powers to summon officials and greater public dissemination of reports, can improve accountability. Capacity building for committee members and institutionalising non-partisan functioning will further enhance their role as fiscal watchdogs.
- Grant statutory enforcement powers to Parliamentary Committees for binding recommendations
- Ensure timely submission and public availability of committee reports
- Increase secretariat support and resources for detailed scrutiny
- Institutionalise non-partisan functioning through cross-party consensus
- Adopt UK PAC best practices: summoning powers, public hearings, and report dissemination
- PSCs are constituted under Articles 105 and 118 of the Indian Constitution.
- The Public Accounts Committee is constituted under the Fiscal Responsibility and Budget Management Act, 2003.
- The Estimates Committee examines demands for grants exceeding ₹40 lakh crore annually.
Which of the above statements is/are correct?
- The PAC has binding powers to enforce its recommendations on the executive.
- The PAC examines government expenditure based on reports from the Comptroller and Auditor General (CAG).
- The PAC is a Department-Related Standing Committee.
Which of the above statements is/are correct?
Jharkhand & JPSC Relevance
- JPSC Paper: Paper 2 — Indian Polity and Governance; Paper 3 — Economy and Public Finance
- Jharkhand Angle: State-level committees mirror central PSCs in overseeing utilisation of funds under schemes like Jharkhand State Planning Board and NITI Aayog-linked projects
- Mains Pointer: Highlight how strengthening fiscal oversight at both Centre and State levels can improve fund utilisation in Jharkhand’s development projects
What is the constitutional basis for Parliamentary Standing Committees in India?
Articles 105 and 118 of the Indian Constitution provide the constitutional framework for the powers and privileges of Parliament and its committees, including Parliamentary Standing Committees.
Which Act governs the constitution of the Public Accounts Committee?
The Public Accounts Committee is constituted under the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act, 1971.
How does the Estimates Committee contribute to fiscal governance?
The Estimates Committee examines the budget estimates presented by ministries, suggests economies, and ensures efficient utilisation of allocated funds, reviewing demands for grants exceeding ₹40 lakh crore annually.
What are the main challenges faced by Parliamentary Standing Committees in India?
Challenges include delays in report submission, lack of enforcement powers to compel executive compliance, resource constraints, part-time membership, and occasional political partisanship.
How does the UK Public Accounts Committee differ from its Indian counterpart?
The UK PAC has statutory powers to summon officials and enforce recommendations, leading to a 15% improvement in fund utilisation efficiency over five years, unlike the Indian PAC which lacks binding enforcement powers.