Question

How does the parliament control budget finances?

Answer 1

Authorization stage: Passing of finance and appropriation bills: 

• Parliament initially authorises the government to collect and spend funds.
• This is accomplished by passing.
• The Finance Bill (to impose or alter taxes), and
• The Appropriation Bill (authorising expenditure from the Consolidated Fund of India).
• Thus, Parliament has the jurisdiction to sanction appropriations, which means it grants permission for government spending.

Oversight stage: Ensuring proper use of funds: Parliament also ensures that the funds are only used for the objectives it has approved. For this, it establishes three main financial committees:

1. Public Accounts Committee (PAC):
   1. Examines the accounting and audit reports prepared by the Comptroller and Auditor General (CAG).
   2. Checks whether money was spent for approved reasons. Expenditure accords with parliamentary authorisation. Excessive spending and irregularities are probed. PAC delivers detailed reports to Parliament that identify any financial wrongdoing.
2. Estimates committee:
   1. Ensures that public spending is sensible and efficient.
   2. Examines the estimates of ministries and departments.
   3. Examines public expenditure performance and recommends reforms or alternative policies to increase efficiency.
3. Committee on Public Undertakings (COPU):
   1. Examines the reports and accounts of public sector undertakings (PSUs).
   2. Examine CAG audit reports on PSUs.
   3. Suggests improvements to the organization, management, and execution of public projects.
   4. Investigate gaps found in CAG reports relating to PSUs.