QUES . “Parliamentary financial control is done to ensure proper execution and control of budget.” Comment

HINTS:

The changing role of governments globally brings out their increasing responsibility for various activities, resulting in increasing expenditure and need for effective parliamentary financial control over the executive.

Financial control by the Parliament is extremely important for the fixing the accountability of the executive. Any lapses in financial control have serious repercussions on the soundness of public delivery system and development in all sectors.

In India, the following principles of financial control are followed:

i) The executive, acting through the ministers, cannot raise money by taxation, borrowing or otherwise without the authority of Parliament; proposals for expenditure requiring additional funds must emanate from the cabinet.

ii) The second principle is the control that vests in the Lok Sabha which has the exclusive control of the money bills. These must originate in the Lok Sabha which has the sole power to grant money by way of taxes or loans and to authorise expenditure.

iii) Tax Expenditure Statement, presented annually, details the revenue forgone due to tax breaks and exemptions. By examining this statement, Parliament can assess the effectiveness of these tax incentives and their impact on revenue generation.

Must read: Parliamentary control over administration is no substitute for judicial control

iv) Parliamentary Financial Committees, such as the Public Accounts Committee (PAC), Estimates Committee, and Committee on Public Undertakings, play a crucial role in scrutinizing government spending. They examine accounts, audit reports, and investigate financial irregularities to ensure transparency and accountability.

v) The budget is prepared by the executive. It is the Parliament/Legislature that is responsible for passing of budget and to see that the expenditure is for purposes voted for and within the appropriated grants of money. In a way it controls the ‘purse’ of the government.

vi) Lok Sabha members can propose cut motions during the budget debate to reduce or even eliminate specific demands for grants. This gives them leverage to influence government policies and priorities.

vii) Another effective way of financial control over public finance by the executive is through classification of transactions in which the concerned departmental officer is subjected to a periodic review. It will clarify whether the money has been spent for the purposes for which it was allocated.

viii) Outcome budget which was introduced in 2004-05, details the expected socio-economic impact of government spending. Parliament can hold the government accountable for achieving these outcomes through discussions and reviews.

Thus, the Indian Parliament exercises significant control over public finance by employing diverse mechanisms, . This ensures that public funds are utilized judiciously, government policies are aligned with national interests, and the executive remains accountable to the legislature.

External link: https://cag.gov.in/uploads/media/Legislation-Committee-20200701165307.pdf