The Public Accounts Committee: Composition, Functions, and Significance

Every year, Parliament sanctions enormous sums of money for the government to run the country – from defence and infrastructure to health schemes and social welfare. But once the budget is passed, who actually checks whether that money was spent the way it was supposed to be? That task falls to one of the oldest and most respected institutions in parliamentary democracy: the Public Accounts Committee, or the PAC.

What is the Public Accounts Committee? 🔗

The Public Accounts Committee (PAC) is a parliamentary financial committee tasked with auditing the revenue and expenditure of the Government of India. It acts as Parliament’s watchdog, making sure that every rupee granted to the executive is spent legally, efficiently, and for the purpose for which it was sanctioned.

The PAC was first conceived in 1921 in the wake of the Montagu-Chelmsford Reforms, making it the oldest parliamentary committee in the country. During the colonial period, the finance member of the executive council served as its chairperson. After the Constitution came into force in 1950, the committee transformed into a truly parliamentary body functioning under the Speaker of the Lok Sabha, with a non-official chairperson drawn from among its members.

Because it has existed for over a century and sets the tone for financial oversight, the PAC is often affectionately called “the mother of all parliamentary committees.”

Constitutional and procedural basis 🔗

The PAC doesn’t have a dedicated article in the Constitution, but it draws authority from two important provisions. Article 105 grants parliamentary privileges to Members of Parliament, allowing PAC members to scrutinise government finances without fear of interference. Article 118 empowers each House of Parliament to make its own rules of procedure, and under this provision, the Lok Sabha has framed Rule 308 to constitute and regulate the PAC each year.

Composition of the PAC 🔗

The PAC is a compact but representative body. The committee consists of not more than twenty-two members – fifteen from the Lok Sabha and a maximum of seven from the Rajya Sabha. Members are elected annually using the principle of proportional representation by means of a single transferable vote. This system ensures that every party or group is represented in roughly the same proportion as its strength in the two Houses.

Interestingly, the Rajya Sabha was not part of the PAC at its inception. Prior to 1954-55, the committee consisted only of fifteen members elected by the Lok Sabha. The seven Rajya Sabha members were added from that year onwards to make the panel truly bicameral.

The Chairperson 🔗

The Chairperson of the PAC is appointed by the Speaker of the Lok Sabha from among the committee’s members. From 1950 to 1967, the chair was held by a member of the ruling party. However, since 1967 it has become a convention to select a person from the Opposition – usually the Leader of the Opposition or a senior opposition figure. This quiet but powerful tradition is what gives the PAC its non-partisan credibility; if the ruling party chaired the committee that scrutinises its own expenditure, the whole exercise would lose meaning.

Over the decades, some of India’s tallest political figures have chaired the PAC – including Atal Bihari Vajpayee, P.V. Narasimha Rao, R. Venkataraman and Murli Manohar Joshi. Congress leader K.C. Venugopal was re-appointed as Chairperson of the PAC, which was constituted on 1 May 2025, continuing the opposition-led tradition.

Eligibility and term 🔗

A minister cannot be elected to the PAC. If a member is appointed as a minister after joining the committee, they cease to be a member from the date of their appointment. The rationale is obvious: a committee designed to check the executive cannot include members of the executive itself. The term of office is one year, after which fresh elections are held.

Functions of the Public Accounts Committee 🔗

The PAC’s mandate is broad and technical. Put simply, it ensures that the government’s spending matches what Parliament has approved. Here’s how it plays out in practice.

Examining appropriation and finance accounts 🔗

The PAC examines the appropriation accounts and the finance accounts of the Union government and any other accounts laid before the Lok Sabha. The appropriation accounts compare actual expenditure with the amounts sanctioned by Parliament through the Appropriation Act, while the finance accounts show the annual receipts and disbursements of the Union government.

When scrutinising these documents, the committee must satisfy itself on three counts: that the money was legally available for the service or purpose for which it was used, that the expenditure conforms to the authority governing it, and that every re-appropriation has been made in accordance with the rules.

Scrutinising CAG reports 🔗

The PAC’s most powerful tool is the audit report of the Comptroller and Auditor General of India (CAG). Once the President lays the CAG report before Parliament, the PAC takes it up for detailed study. The CAG’s audit is comprehensive – covering accountancy, regularity, appropriation, discretionary, and efficiency-cum-performance audits.

At the start of its term each year, the committee picks the most important audit paragraphs from the CAG’s various reports, deliberates on them, and submits its findings to Parliament. The CAG is often described as a “friend, philosopher and guide” to the PAC, assisting it throughout its examinations.

Tax administration and revenue leakage 🔗

The PAC doesn’t stop at expenditure; it also looks at how the government collects money. While scrutinising the CAG reports on revenue receipts, the Committee examines various aspects of the Government’s tax administration. This includes cases of under-assessment, tax evasion, non-levy of duties, misclassifications, and similar irregularities. By identifying loopholes in tax laws and procedures, the committee helps plug leakages of public revenue.

Examining accounts of autonomous bodies and excess expenditure 🔗

The PAC also looks into the accounts of state corporations, trading concerns, manufacturing projects, and autonomous or semi-autonomous bodies audited by the CAG (except those handled by the Committee on Public Undertakings). Further, if any amount has been spent on a service during a financial year beyond what was granted by the Lok Sabha, the committee investigates the circumstances of the excess and recommends appropriate action.

How the PAC functions 🔗

The PAC works quietly but thoroughly. Its meetings are held in camera – away from the glare of cameras and public galleries. Ministry representatives, usually the secretaries of concerned departments, are called to explain irregularities highlighted by the CAG. Unlike debates in Parliament, these sessions are not meant for political theatre; they are detailed, evidence-based hearings.

To manage its workload, the committee forms several sub-committees and working groups. These focus on specific themes such as defence, revenue, or action taken on previous reports. Once its examination is complete, the PAC prepares detailed reports with recommendations, which are then presented to Parliament.

Notably, none of this would be possible without close cooperation with the CAG. The Committee is assisted by the CAG in examining accounts and audit reports, and the CAG’s independent standing gives the PAC technical credibility.

Significance of the PAC 🔗

The significance of the PAC flows from a simple but powerful democratic idea – that Parliament, as the representative of the people, must have the final say on how public money is spent. The executive proposes the budget; Parliament sanctions it; but without a mechanism to verify actual spending, the whole exercise would be incomplete.

Upholding financial accountability 🔗

By examining how funds were used and whether expenditures matched the approved budget, the PAC ensures that the government is held accountable for its financial decisions. The committee has flagged some of the most high-profile financial controversies in recent memory, including investigations linked to the 2G spectrum case and the 2010 Commonwealth Games.

Promoting efficiency and economy 🔗

The PAC doesn’t only look for illegality; it also checks whether expenditure is economical, efficient, and free of waste. By pointing out extravagance and inefficiency in executing policies, it pushes the administration towards better value for money. Former CAG Ashok Chanda once observed that the committee had fully lived up to the expectation of becoming a strong force in managing public expenditure.

Strengthening parliamentary democracy 🔗

The PAC embodies the classic principle that the executive must answer to the legislature. Its opposition-led chairmanship, bipartisan composition, and confidential hearings collectively reinforce the idea that financial oversight is above politics. In a parliamentary democracy, where the executive emerges from the legislature itself, such oversight is indispensable.

Limitations of the PAC 🔗

For all its importance, the PAC operates within very real constraints.

First, it is not concerned with questions of policy in a broader sense. It can comment on extravagance or waste in executing a policy, but it cannot second-guess the policy decision itself. Second, the committee undertakes a post-mortem analysis of accounting, indicating previous expenditure. By the time the PAC examines a transaction, the money has already been spent – there is no way to stop the bleeding in real time.

Third, the PAC has no authority to intervene in day-to-day administration. It cannot disallow expenditure, reverse a contract, or pull up an official on the spot. Fourth, and perhaps most importantly, its recommendations are advisory and not binding on the government. It is not an executive body; only Parliament can act on its findings.

Other challenges include the sheer volume and technical complexity of government accounts, limited research support, and the ever-present risk that political dynamics may seep into what should be a non-partisan exercise. Former Rajya Sabha Chairman M. Venkaiah Naidu has even suggested that the PAC be renamed the Public Accounts and Audit Committee, since audit review has become central to its work.

The way forward 🔗

Reform proposals for the PAC have included giving it a role in the selection of the CAG, authorising it to examine Public-Private Partnership projects, and making technical expert assistance more readily available for complex audits. Some have argued that its main focus should remain on policy administration rather than policy itself, to preserve its non-partisan credibility.

Whatever shape these reforms take, the underlying principle is unchanged: public money must be spent for the public good, and somebody must be watching. For a century now, that somebody has been the Public Accounts Committee.

What do you think? If the PAC’s recommendations are only advisory, do you believe giving it binding powers would strengthen accountability – or would it risk turning financial oversight into a political weapon? And in an era of large, complex government schemes, should the PAC move beyond post-mortem audits to more real-time forms of scrutiny?

References

1. https://en.wikipedia.org/wiki/Public_Accounts_Committee_(India)
2. https://harichandanaias.com/public-accounts-committee/
3. https://cag.gov.in/cen/new-delhi-i/en/page-cen-new-delhi-i-pac
4. http://164.100.47.194/loksabha/writereaddata/RTI/righttoinformationact/publicaccountscommitte.htm
5. https://www.dhyeyaias.com/daily-current-affairs/public-accounts-committee-a-century-completed
6. https://www.aninews.in/news/national/general-news/congress-leader-kc-venugopal-re-appointed-as-pac-chairperson20250505185039/
7. https://lms.chanakyamandal.org/current-event/public-accounts-committee-pac/
8. https://prepp.in/news/e-492-public-accounts-committee-indian-polity-upsc-notes
9. https://unacademy.com/content/karnataka-psc/study-material/polity/public-accounts-committee/