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 and governed by Rules 308 to 317 of the Lok Sabha Rules of Procedure (2023). These committees perform continuous, detailed scrutiny of government finances, supplementing Parliament’s limited debate time. Key financial committees include the Public Accounts Committee (PAC), Estimates Committee, and the Committee on Public Undertakings. Their role is critical in enhancing transparency and accountability in fiscal governance by monitoring government expenditure and fund utilisation.
UPSC Relevance
- GS Paper 2: Indian Polity and Governance — Parliamentary Committees, Budgetary Process, Accountability Mechanisms
- Essay Paper: Fiscal Accountability and Governance
Legal and Constitutional Framework of Parliamentary Committees
Article 105 empowers Parliament to constitute committees for efficient functioning. The Public Accounts Committee is specifically constituted under Article 105(5), while the Estimates Committee is established under Article 208(3). The Committee on Public Undertakings is formed under Rule 310 of the Lok Sabha Rules. These provisions institutionalise committees as instruments of legislative oversight over executive financial management.
- Department-Related Standing Committees (DRSCs): Examine Demands for Grants, bills, and policies of ministries (e.g., PSC on Finance).
- Financial Committees: PAC audits government expenditure; Estimates Committee reviews efficiency and economy; Committee on Public Undertakings assesses public sector enterprises.
- Other Standing Committees: Business Advisory Committee, Committee on Privileges, Rules Committee.
Functions and Impact of Financial Parliamentary Committees
PSCs conduct detailed examination of budgetary allocations and government spending, addressing the time constraints and partisan nature of plenary debates. They operate year-round, enabling continuous oversight and evidence-based evaluation through expert testimonies and data analysis. This non-partisan approach strengthens fiscal discipline and policy implementation monitoring.
- Detailed Scrutiny: Committees analyse Demands for Grants exceeding ₹40 lakh crore annually (Lok Sabha Secretariat, 2023), focusing on expenditure patterns and fund utilisation.
- Audit and Compliance: PAC reviews conformity of government spending with Parliament’s decisions; it has examined over 200 reports since inception (PAC Annual Report, 2023).
- Efficiency Assessment: Estimates Committee evaluates economy and effectiveness of spending, covering about 70% of government expenditure (Estimates Committee Report, 2023).
- Public Sector Oversight: Committee on Public Undertakings scrutinises performance and financial health of public enterprises.
Economic Context: Fund Utilisation and Fiscal Governance Challenges
The PSC on Finance highlighted that fund utilisation by the Ministry of Planning and NITI Aayog was below 36% in FY24 and FY25 (PSC Finance Report, 2024). Despite a substantial allocation of ₹1.1 lakh crore in the Union Budget 2024-25 to planning bodies, underutilisation persists, risking suboptimal GDP growth projected at 6.5% for 2024-25 (Economic Survey, 2024). Parliamentary committees scrutinise these trends to identify bottlenecks and recommend corrective measures.
- Underutilisation signals poor financial management and delays in project implementation.
- PSC reports provide actionable recommendations to improve fund absorption and accountability.
- Continuous oversight helps mitigate fiscal risks and supports macroeconomic stability.
Comparison: India’s PAC vs UK’s Public Accounts Committee
| Aspect | India’s PAC | UK’s PAC |
|---|---|---|
| Year of Establishment | 1921 | 1861 |
| Institutional Independence | Limited enforcement powers; depends on executive cooperation | Greater autonomy; can summon officials and enforce compliance |
| Media Engagement | Moderate; limited public awareness | High; extensive media coverage enhances public scrutiny |
| Impact on Efficiency | Recommendations often advisory; implementation varies | Average 15% improvement in departmental spending efficiency over 5 years (UK NAO Report, 2023) |
| Transparency | Reports tabled in Parliament; less proactive dissemination | Active publication and public hearings increase transparency |
Limitations and Challenges of Parliamentary Committees in India
Despite their mandate, PSCs face structural and operational constraints. Delays in report submission reduce their relevance for timely fiscal decisions. Lack of statutory enforcement powers means executive agencies may ignore recommendations. These limitations contribute to persistent issues like fund underutilisation and weak fiscal discipline.
- Non-binding nature of committee reports weakens executive accountability.
- Insufficient resources and technical capacity hamper in-depth analysis.
- Political considerations sometimes affect non-partisan functioning.
Significance and Way Forward
- Empowering PSCs with legal authority to enforce compliance can strengthen fiscal governance.
- Enhancing technical support and data access will improve quality of scrutiny.
- Greater transparency and media engagement can increase public pressure on the executive.
- Regular capacity-building for committee members will ensure informed oversight.
- Integration of committee recommendations into budgetary processes will improve fund utilisation and economic outcomes.
- They are constituted under Articles 105 and 118 of the Constitution of India.
- The Public Accounts Committee is established under Article 208(3).
- They function throughout the year to scrutinise government functioning.
Which of the above statements is/are correct?
- It examines the economy, efficiency, and effectiveness of government expenditure.
- It is a Department-Related Standing Committee.
- It covers approximately 70% of total government expenditure in its reviews.
Which of the above statements is/are correct?
Jharkhand & JPSC Relevance
- JPSC Paper: Paper 2 — Governance and Public Administration
- Jharkhand Angle: State-level Public Accounts Committees and Estimates Committees function similarly to monitor state government finances and public sector undertakings in Jharkhand.
- Mains Pointer: Highlight the importance of strengthening state legislative committees for fiscal oversight to improve fund utilisation in Jharkhand’s development schemes.
What constitutional provisions empower the formation of Parliamentary Standing Committees?
Articles 105 and 118 of the Indian Constitution empower Parliament to constitute committees for efficient functioning. Specific committees like the Public Accounts Committee are constituted under Article 105(5), and the Estimates Committee under Article 208(3).
How do Parliamentary Standing Committees improve fiscal governance?
They provide detailed, year-round scrutiny of government expenditure, analyse Demands for Grants, audit fund utilisation, and evaluate policy implementation. Their non-partisan, evidence-based reports enhance transparency and accountability beyond parliamentary debates.
What are the main challenges faced by Parliamentary Standing Committees in India?
Challenges include delays in report submission, lack of enforcement powers to ensure executive compliance, limited technical resources, and occasional political interference, which reduce their effectiveness in real-time fiscal oversight.
How does the Public Accounts Committee in India differ from the UK’s PAC?
India’s PAC has limited enforcement powers and moderate media engagement, whereas the UK’s PAC enjoys greater autonomy, can enforce compliance, and benefits from extensive media coverage, leading to higher public awareness and improved fiscal oversight.
What economic risks arise from poor fund utilisation highlighted by Parliamentary Committees?
Underutilisation of allocated funds, such as the sub-36% utilisation by NITI Aayog and Ministry of Planning, can delay project implementation, reduce economic growth potential, and weaken fiscal discipline, risking the projected GDP growth of 6.5%.