The Public Accounts Committee (PAC) is a parliamentary body that ensures government accountability in financial matters. It scrutinizes CAG's audit reports, acts as a check on executive expenditure, and promotes transparency by highlighting fiscal lapses. Its advisory recommendations are advisory, making it a vital guardian of public funds.
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Picture Courtesy: THE HINDU
The Public Accounts Committee criticized national highway toll system for its "perpetual tolling" regime that charges commuters indefinitely, regardless of factors like road quality, traffic volume, or affordability.
Legal framework: Section 7 of the National Highways Act, 1956 empowers the government to levy user fees for services provided on national highways, with rules formulated under the National Highways Fee (Determination of Rates and Collection) Rules, 2008.
Rate calculation: User fees are based on fixed base rates and are not tied to construction cost recovery.
Collection mechanisms: Government collects tolls on publicly funded highways, while concessionaires manage collection under models like Build-Operate-Transfer (BoT), Toll-Operate-Transfer (ToT), or Infrastructure Investment Trusts (InvITs).
Perpetual collection: A 2008 amendment permits user fee collection, even after the concession period ends, with revenue directed to the Consolidated Fund of India if NHAI manages the highway.
Discounts and exemptions: Users residing within 20 kilometers of a toll plaza can obtain a monthly pass for ₹340 based on their Aadhar card or other proof of residence.
Key Recommendations from the Public Accounts Committee
End Perpetual Tolling: Discontinuing or substantially reducing toll charges once the capital and maintenance costs of a highway have been recovered, any extension must require clear justification and approval from an independent authority.
Establish a Regulatory Authority: Create a specialized regulatory body, like the Airports Economic Regulatory Authority (AERA), to manage toll determination, collection, and regulation.
Reimbursement for Commuters: Highway users should be compensated for tolls when construction or maintenance work disrupts their travel.
The Ministry of Road Transport and Highways (MoRTH) acknowledges the PAC's concerns regarding the toll collection system, and launched a joint study with NITI Aayog to revise the user fee determination framework.
Its origins trace back to the Government of India Act of 1919, also known as the Montagu-Chelmsford Reforms, led to its formal establishment in 1921.
Initially, chaired by the Finance Member of the Executive Council, continued until independence.
After Independence: The PAC became a Parliamentary Committee operating under the Speaker of the Lok Sabha.
It comprises 22 members, representing both Houses of Parliament.
Election process: Principle of proportional representation by means of a single transferable vote.
Term of office: Members serve a one-year term.
Chairperson appointment: Speaker of the Lok Sabha appoints the Chairperson of the PAC from amongst its Lok Sabha members.
Minister's exclusion: Rules of Procedure and Conduct of Business in Lok Sabha prohibit any Minister from being a member of the PAC, to ensures the executive branch does not interfere with the committee's oversight functions, maintaining its neutrality and integrity.
Audits Government Accounts: It scrutinizes the Appropriation Accounts and Finance Accounts to confirm that public money is spent as Parliament intended.
Enforces Sanctioned Limits: Verifies that expenditure does not exceed the amounts authorized by the Lok Sabha for specific purposes.
Examines CAG Reports: Its investigations are based on the audit reports of the Comptroller and Auditor General (CAG) on accounts, performance, and compliance.
Investigates Irregularities: Probes cases of wasteful expenditure, financial mismanagement, and corruption highlighted in CAG reports.
Summons High-Ranking Officials: Possesses the power to summon senior secretaries of government ministries to provide evidence and explain their departments' financial conduct.
Scrutinizes Public Sector Undertakings: Examines the accounts of state-owned corporations, autonomous bodies, and other public enterprises.
Recommends Corrective Action: Suggests systemic improvements to ministries to prevent the recurrence of financial errors and negligence.
Tracks Implementation: Follows up on its recommendations by reviewing the "Action Taken Reports" submitted by the government, ensuring its findings are not ignored.
Recommendations are Advisory, Not Binding: The PAC can only recommend action; it cannot compel government compliance. Ministries submit "Action Taken Notes" but can reject the committee's findings, limiting its power to enforce accountability.
No Power to Enforce Penalties: The committee lacks executive authority, cannot penalize officials or departments for financial misconduct. It can only recommend disciplinary action, leaving the final decision to the department itself.
Conducts Only Post-Mortem Analysis: The PAC scrutinizes expenditure after it has occurred. This "autopsy" of accounts cannot prevent financial mismanagement in real-time. By the time the committee investigates, the public money is already lost.
Cannot Question Government Policy: PAC's mandate forbids it from questioning the wisdom of a government policy. It can only examine if the policy's implementation was efficient and economical.
Lack of Technical Expertise: Members are generalist parliamentarians, not experts in complex fields like defense, telecom, or infrastructure. The committee depends on the CAG for technical guidance, which limit its capacity for deeper, independent analysis.
Overburdened with a Vast Scope: With limited time and resources, the PAC can only select a few CAG reports for detailed examination each year, a vast portion of government spending is never scrutinized.
Potential for Political Influence: Ruling party holds a majority of members in the committee, can lead to the politicization of discussions, diluting a report's findings.
Limited Follow-up and Public Engagement: Without an institutional mechanism for sustained follow-up, the executive can delay or ignore recommendations with minimal political cost.
Grant Quasi-Judicial Powers: Granting the PAC limited quasi-judicial powers would enable it to enforce its recommendations.
Make Committee Scrutiny Mandatory for Key Bills: Legislation with significant financial implications should be mandatorily referred to the PAC or a related committee for scrutiny before being passed.
Establish a Public Tracking Mechanism for Recommendations: A publicly accessible digital dashboard should be created to track the status of PAC recommendations, the ministry's "Action Taken Report," and the final outcome, this will create public pressure to prevent delays.
Leverage Technology for Real-Time Audits: The PAC and CAG should integrate data analytics and AI into the audit process.
Provide In-House Technical Expertise: The PAC secretariat must be strengthened with a dedicated team of technical experts in public finance, infrastructure, and defense.
Increase Media and Public Engagement: The PAC should increase the public visibility of its reports by holding press briefings and publishing simplified summaries. An informed public creates the political pressure needed to ensure the government takes the committee's findings seriously.
Implement a "Contempt of the PAC" Clause: A "Contempt of the PAC" provision should be introduced. If a ministry provides misleading information or willfully fails to implement recommendations, this would allow Parliament to take stronger punitive action, reinforcing the committee's authority.
The Public Accounts Committee (PAC) upholds accountability and transparency by scrutinizing government expenditures and CAG audit reports, ensuring lawful use of public funds, reinforcing democratic principles, and contributing to clean governance and public trust.
Source: THE HINDU
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PRACTICE QUESTION Q. How does the Public Accounts Committee act as an important check on the government's financial management? 150 words |
It has 22 members: 15 from Lok Sabha and 7 from Rajya Sabha.
Neither; it is a parliamentary committee formed under the Rules of Procedure and Conduct of Business in Lok Sabha.
The Speaker of the Lok Sabha appoints the Chairman, who, by convention, belongs to the main opposition party.
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