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Parliamentary Control Over Public Finance in India:Explainer



  Jun 13, 2024

Parliamentary Control Over Public Finance in India:Explainer



In India, Parliament plays a crucial role in overseeing the government's financial activities. This control is exercised through a combination of constitutional provisions, statutory mechanisms, and parliamentary committees. This multifaceted approach ensures transparency, accountability, and efficient utilization of public funds. Let's delve into the various instruments of parliamentary control over public finance:

Constitutional Mechanisms:

Money Bill and Financial Bills
Budget Approval (Article 112): The annual budget, a comprehensive financial statement, requires approval from both houses of Parliament. This grants Parliament the authority to modify budget allocations and ensure alignment with national priorities.

Statutory and Other Mechanisms:

Cut Motions: 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.

Outcome Budget: Introduced in 2004-05, the outcome budget details the expected socio-economic impact of government spending. Parliament can hold the government accountable for achieving these outcomes through discussions and reviews.

Gender Budgeting: Many ministries have dedicated cells for gender budgeting, tracking expenditure that specifically benefits women. Parliament can evaluate the government's progress in gender-sensitive budgeting and advocate for further improvements.

Parliamentary Financial Committees: These 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.

Tax Expenditure Statement: This 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.

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




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