This article has been written by Bijendra Shandilya, a student studying BBA-LLB from Indian institute of management, Rohtak . The author is a 1st year law student.

In a democratic system of government, the legislative branch plays a crucial role in controlling the executive branch’s use of financial resources. One key mechanism for this control is through the use of financial committees. These committees are made up of legislators who are tasked with reviewing and approving the government’s budget and financial plans, as well as overseeing and investigating the executive branch’s financial activities. The goal of this system is to ensure that government funds are being used efficiently and effectively, and to prevent any potential misuse of funds by the executive branch. This helps to maintain transparency and accountability in government financial decision making.

Legislative control over finances is exercised mainly in two stages. The first is at the time of policy-making and the second while reviewing the implementation of the policy. The legislature has the control of the purse and determines the quantum of resources and the manner of raising and spending the same.

A key requirement of any democracy is the legislature’s control of the government’s purse. The body representing the people should ensure that revenues are raised and is expenditure incurred by the executive as approved by it. The Constitution of India prescribes the procedures to get legislative approval for raising and spending money. The instruments are the Annual Financial Statement or the budget, the demands for grant with details of expenditure, the Appropriation Bill to formally approve expenditure and the Finance Bill spelling out how revenue is to be raised. After examining these, the Lok Sabha gives its approval to the two bills which become acts. The stage is set for the government to implement the budget. The Comptroller and Auditor General, a constitutional authority, submits reports on the implementation which are discussed by the Public Accounts Committee of Parliament. 

Another important aspect of the financial committees’ role is their ability to provide expert advice on financial matters to the legislative body. Members of these committees typically have a background in finance, accounting, or budgeting, and are able to provide insight and analysis on complex financial issues. They also work closely with other legislators and staff to ensure that the legislative body’s priorities and concerns are reflected in the budget and financial proposals.

In addition to their work on the national level, many financial committees also have oversight responsibilities for state, regional, or local government finances. This can include reviewing and making recommendations on state budgets and financial management, as well as serving as a liaison between the legislative body and local governments on financial matters. Overall, the role of financial committees in legislative control over executive financial matters is essential for promoting responsible and effective use of public funds, as well as for ensuring transparency and accountability in government finances.

Legislative control over finances is exercised mainly in two stages. The first is at the time of policy-making and the second while reviewing the implementation of the policy. The legislature has the control of the purse and determines the quantum of resources and the manner of raising and spending the same. The initial control is exercised at the time of the presentation of the annual budget or the annual financial statement, showing the estimated receipts and proposed expenditure of the Government, for the financial year. The second stage of control viz. the control over the implementation of the policies, is to review whether the moneys voted by the legislature have been utilized for the purposes for which and in the manner in which the legislature wanted them to be utilized.

The financial accountability of the executive to the Legislature is ensured through a system of committees. There are three financial committees, namely the Estimates Committee, the Public Accounts Committee (PAC), and the Committee on Public Undertakings (CoPU) which are set up under the Rules of Procedure and Conduct of Business in the Lok Sabha/Vidhansabhas of the States.

The Estimates Committee is entrusted with the responsibility of undertaking detailed examinations of budget estimates put forth by the Government in respect of each administrative department.

The PAC and the CoPU examine the expenditures incurred by the executive to assess whether the moneys disbursed were available and applicable to the services to which they had been applied, that the expenditures conform to the authority that governed it and that the rules of financial propriety and economy in expenditure were duly observed. These committees also examine the efficiency of implementation of projects and schemes and whether their objectives were attained or not. The PAC examines the Appropriation Accounts and Report of the CAG thereon as well as the annual Finance Accounts of the Government and any other accounts placed before the House.

The CoPU considers the Audit Reports relating to commercial enterprises. In a State where there is no separate CoPU, the PAC also examines the accounts and considers Reports relating to Public Sector Undertakings.

The CAG plays a key role in the functioning of the financial committees of Parliament and the State Legislature. His reports generally form the basis of the Committees’ working, although the latter are not precluded from examining issues not brought out in these reports. He scrutinizes the notes which the Ministries submit to the Committees and helps the Commi9ttees to check the correctness of the facts and figures in their draft reports.

The Ministry of Finance and its various departments also play an important role in the financial matters of India, as they are responsible for preparing and implementing the budget. The Union Budget of India is presented in the parliament by the Minister of Finance usually on the last day of February, which is then discussed and passed by the parliament. The Finance Minister also presents the Mid-Year Economic Analysis and the Economic Survey of India in the parliament before the Union Budget.

Overall, the legislative branch of the Indian government, specifically the financial committees, play a key role in ensuring legislative control over executive financial matters in India.

In addition to the Public Accounts Committee (PAC) and the Committee on Public Undertakings (COPU), there are also several other financial committees in the Indian Parliament that play an important role in legislative control over executive financial matters. These include the Estimates Committee, which examines the estimates of expenditure submitted to Parliament, and the Standing Committee on Finance, which examines the financial bills, and other financial matters referred to it by the Lok Sabha or Rajya Sabha.

Another important aspect of legislative control over executive financial matters in India is the role of the Comptroller and Auditor General (CAG) of India. The CAG is an independent constitutional authority who is responsible for auditing the accounts of the Union and state governments, as well as those of other bodies and authorities substantially financed by the government. The CAG’s reports are submitted to the President of India, who then lays them before the Parliament, where they are examined by the Public Accounts Committee (PAC) or the Committee on Public Undertakings (COPU).

Overall, in India, the legislative branch of the government, specifically financial committees, plays a key role in ensuring legislative control over executive financial matters through a system of checks and balances that includes review, oversight, and audits of the executive branch’s financial decisions and activities.

REFERENCES 

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