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PAC: watchdog for govt spending; panel of consensus, controversy

After asking the RBI Governor tough questions and threatening to call in the PM to explain demonetisation, Parliament’s PAC is back in the news. Anand Mishra tells the Committee’s story

Written by Anand Mishra |
Updated: January 11, 2017 12:53:46 am
 Public Accounts Committee, PAC controversy, PAC controversy explained, PAC chairman KV thomas, demonetisation, demonetisation news, demonetisation effects, demonetisation-RBI, India news, modi, Indian Express The PAC under Murli Manohar Joshi examined the 2G scam. (Express Photo by Prem Nath Pandey/File)

Holding the Executive to account for its use of public money is one the key roles of Parliament’s Public Accounts Committee (PAC), the “mother of all Parliamentary Committees”. It is the oldest of all House panels, with its origins in the Raj, and its job is to keep a vigil on the spending and performance of the government, to bring to light inefficiencies, wasteful expenditure, and indiscretion in the implementation of policies and programmes approved by Parliament, and to make recommendations to streamline the administration for efficient, speedy and economical implementation of policy.

PAC and Controversy

Consensus and controversy have been the contradictory faces of the PAC’s functioning over the past few decades.

On Tuesday, a BJP member of the panel wrote to Lok Sabha Speaker Sumitra Mahajan expressing resentment over PAC Chairman K V Thomas’s remarks that the panel could call even Prime Minister Narendra Modi to explain the demonetisation issue if it was not satisfied with the reply of RBI Governor Urjit Patel and top finance officials.

The Sunday Express reported on January 8 that the PAC had asked Patel — who is supposed to appear before it later this month — probing questions on the decisionmaking process ahead of the demonetisation announcement, the RBI’s involvement, and its many policy “flip-flops”. On Tuesday, The Indian Express reported that RBI had told a separate committee of Parliament that the government had, a day before the November 8 announcement, “advised” it to “consider” junking Rs 1,000 and Rs 500 notes.

While Thomas on Monday stated a fact about the considerable powers of the PAC, it is also a fact that no PM has ever appeared before it in the past. There have been multiple showdowns between Congress and BJP members during hearings of the 2G, coal blocks allotment and CWG issues at the PAC.

In 2010 and 2011, then PAC Chairman Murli Manohar Joshi made attempts to push through a controversial report on the 2G scam, and said he could summon then Prime Minister Manmohan Singh — triggering huge protests from Congress members. With the panel split down the middle, it was decided that Constitutional experts would be consulted on whether the report could be considered, but the matter subsequently rested there.

In July this year, sparks flew over the constitution of the sub-committee on Defence, which will examine CAG reports on irregularities in a number of deals including AgustaWestland. Citing precedent and right, the BJP insisted on heading the panel, but Thomas rejected the contention saying it was his prerogative to choose sub-committee heads.

This is part of a pattern: while the PAC cannot finalise any report without consensus, the lack of consensus has frequently seen controversy over the role of the Chairman.

“While other Department Related Standing Committees can adopt reports with dissent notes by some members, the PAC must adopt all reports by consensus. This is unique about the PAC, and helps it maintain neutrality,” BJP member in the panel, Nishikant Dubey, said. Dubey heads two sub-committees, and has prepared reports on ways to strengthen the Committee.

It is felt that since each PAC operates in a specific political context and faces issues unique to the legislature it serves, its major focus should be on the administration of policy rather than policy itself, to avoid political wrangling.

PAC in the Past

The PAC website says the Committee on Public Accounts was first set up in 1921 in the wake of the Montague-Chelmsford Reforms. W M Hailey was its first president, and Bhupendra Nath Mitra its first Indian president. The last president before Independence was Liaquat Ali Khan.

The Finance Member of the Executive Council was the Chairman of the Committee. The Finance Department (now the Ministry of Finance) provided secretariat assistance to the Committee up to 1949. During the days of the Interim Government, the then Finance Minister was the Chairman of the Committee and, after Independence, the Finance Minister of India became Chairman. This naturally restricted the free expression of views and criticism of the Executive.

With the Constitution coming into force on January, 26, 1950, the Committee became a Parliamentary Committee functioning under the Speaker with a non-official Chairman appointed by the Speaker from among the Members of Lok Sabha elected to the Committee. But even then, a member from the ruling party continued to be Chairman.

The Congress had the post until 1967, when Minoo Masani of Swatantra Party became Chairman. Since then the PAC has always been headed by a member from the Opposition. Among prominent Chairmen were N G Ranga, P V Narasimha Rao, Atal Bihari Vajpayee, N D Tiwari and Buta Singh, besides Joshi.

Powers and Challenges

The PAC’s power to scrutinise expenditure provides for Parliamentary oversight over Executive decisions and acts as a check on slackness, negligence and even wrongdoing on the part of the Executive. However, the lack of technical expertise hinders the PAC’s examinations. Officers are sometimes able to dodge PAC summons, which has prompted suggestions that it should have the power to hand out harsher punishments.

In December, the Institute of Public Auditors of India (IPAI) sought suo motu powers of investigation for the PAC. In April, the PAC had pitched for making the CAG and Auditor General (AG) accountable to Parliament.

The report of the All India Conference of Chairpersons of PACs of Parliament and State/UT Legislatures suggested that the PAC should be consulted on the appointment of the CAG, and that it should have powers to examine Public-Private Partnership projects. The report proposed that services of experts should be availed on technical matters, among other suggestions.

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