Public Accounts Committee: Functions, Composition and CAG Linkage
The Public Accounts Committee examines CAG audit reports on Union government expenditure, checking legality, propriety and efficiency of spending.
At a glance
Parliament's key financial committee examining audited Union government expenditure.
22 members from both Houses; examines CAG's three audit reports on Union accounts.
Checks not just legality but economy, prudence and propriety of public spending.
The Public Accounts Committee (PAC) is the principal parliamentary financial committee that examines how the Union government has actually spent the money Parliament sanctioned. Working closely with the Comptroller and Auditor General of India (CAG), it scrutinises audited accounts for legality, propriety, and efficiency, functioning as Parliament's main instrument for holding the executive accountable after the money has already been spent.
Composition
The PAC has 22 members, the same strength as the Committee on Public Undertakings, though the two differ in what they examine. Unlike the Estimates Committee, which is drawn exclusively from the Lok Sabha, the PAC includes members from both the Lok Sabha and the Rajya Sabha.
| Committee | Members | Houses Represented | Nature of Scrutiny |
|---|---|---|---|
| Public Accounts Committee | 22 | Lok Sabha + Rajya Sabha | Actual expenditure already incurred, audited by CAG |
| Estimates Committee | 30 | Lok Sabha only | Budget estimates, before expenditure is finalised |
| Committee on Public Undertakings | 22 | Lok Sabha + Rajya Sabha | Public sector undertakings' accounts and autonomy |
Role of the CAG
The committee's work is built around the CAG's audit reports. The CAG upholds the Constitution and the laws made by Parliament in matters of financial administration, and submits three distinct audit reports to the President, who in turn lays them before Parliament: the audit report on appropriation accounts, the audit report on finance accounts, and the audit report on public undertakings. The PAC examines these reports in detail, and the CAG assists the committee throughout this process. A former CAG, Ashok Chanda, once described the relationship by calling the CAG "a guide, friend and philosopher" to the committee — a phrase that captures how central the CAG's expert input is to the PAC's effectiveness.
What the Committee Examines
The PAC's scrutiny goes beyond simply checking whether spending was technically correct. It examines public expenditure both from a legal and formal standpoint — to catch technical irregularities — and from the standpoint of economy, prudence, wisdom, and propriety, in order to expose cases of waste, loss, corruption, extravagance, inefficiency, and nugatory (wasted) expenditure. Its detailed functions include:
- Examining the appropriation accounts and finance accounts of the Union government, and any other accounts laid before the Lok Sabha. Appropriation accounts compare actual expenditure with the expenditure sanctioned by Parliament through the Appropriation Act, while finance accounts show the Union government's annual receipts and disbursements.
- While scrutinising appropriation accounts and the CAG's audit report on them, satisfying itself that: the money disbursed was legally available for the service or purpose applied to it; the expenditure conforms to the authority that governs it; and every re-appropriation of funds was made in accordance with the relevant rules.
- Examining the accounts of state corporations, trading concerns, and manufacturing projects, along with the CAG's audit report on them — except for those public undertakings specifically allotted to the Committee on Public Undertakings.
- Examining the accounts of autonomous and semi-autonomous bodies whose audit is conducted by the CAG.
- Considering the CAG's report relating to the audit of any receipt, or examining the accounts of stores and stocks.
- Examining money spent on any service during a financial year in excess of the amount that the Lok Sabha had granted for that purpose.
Limitations
Despite its central role, the PAC's effectiveness is bounded by several structural constraints:
- It is not concerned with questions of policy in the broader sense — its focus is expenditure, not policy merit.
- It conducts a post-mortem examination of accounts, reviewing expenditure that has already been incurred rather than preventing it.
- It cannot intervene in matters of day-to-day administration.
- Its recommendations are advisory in nature and not binding on the ministries concerned.
- It is not vested with the power to disallow expenditure by departments.
- It is not an executive body and therefore cannot issue orders; only Parliament can take a final decision on its findings.
UPSC Relevance
Prelims: Remember the PAC's strength (22 members, both Houses), the CAG's three audit reports (appropriation accounts, finance accounts, public undertakings), and how the PAC differs from the Estimates Committee (post-facto expenditure review versus pre-vote estimates review, Lok Sabha-only membership for the latter).
Mains: A key example for GS2 answers on legislative oversight of public finance — illustrating both the strength of expert-assisted scrutiny (via the CAG) and the structural limits of advisory, non-executive parliamentary committees.
FAQ
Q1. How many members does the Public Accounts Committee have? It has 22 members, drawn from both the Lok Sabha and the Rajya Sabha.
Q2. What reports does the CAG submit that the PAC examines? Three audit reports: on appropriation accounts, on finance accounts, and on public undertakings — all laid before Parliament by the President.
Q3. How does the PAC differ from the Estimates Committee? The PAC examines actual, already-incurred expenditure with CAG assistance and has members from both Houses; the Estimates Committee examines budget estimates before final expenditure, has no CAG assistance, and is drawn only from the Lok Sabha.
Q4. Are the PAC's findings binding on the government? No. Its recommendations are advisory, and it cannot issue orders or disallow expenditure — only Parliament can take a final decision.
Q5. What does the PAC check beyond legal correctness of expenditure? It also examines expenditure from the standpoint of economy, prudence, wisdom, and propriety, to expose waste, loss, corruption, extravagance, inefficiency, and nugatory expenses.
Quick Revision
- PAC: 22 members, from both Lok Sabha and Rajya Sabha.
- Examines CAG's three reports: appropriation accounts, finance accounts, public undertakings.
- Checks legality plus economy, prudence, wisdom, propriety of expenditure.
- Recommendations advisory only; cannot disallow expenditure or issue orders.
- CAG assists the committee — described as its "guide, friend and philosopher" (Ashok Chanda).
Sources
Further Reference
For deeper reading on this topic and the wider polity syllabus, these standard works are recommended:
- M. Laxmikanth, Indian Polity (McGraw Hill) — the standard UPSC handbook.
- D.D. Basu, Introduction to the Constitution of India (LexisNexis) — authoritative constitutional-law treatment.
- The Constitution of India — Bare Act — the official text.
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