Parliamentary Control over Public Expenditure

Parliament controls public expenditure by approving spending before money is used and examining its use afterwards. This combines legislative authorisation with audit-based financial accountability of the executive.

Constitutional control over withdrawals

The Constitution requires executive spending to pass through a legislative process. Under Article 112, the President causes the Annual Financial Statement, commonly called the Union Budget, to be laid before both Houses.

• Under Article 113, expenditure charged on the Consolidated Fund may be discussed but is not voted; other expenditure is submitted as demands for grants to the Lok Sabha.
• Under Articles 114 and 266(3), money cannot be withdrawn from the Consolidated Fund of India without appropriation made by law.

Budget scrutiny and voting

Parliament examines expenditure proposals through general discussion, committee scrutiny and voting. This enables members to question priorities, economy and administrative performance.

• Department-related Standing Committees scrutinise demands for grants and report to Parliament before voting.
• The Lok Sabha may approve, reject or reduce a demand through policy, economy or token cut motions.
• Articles 115 and 116 govern supplementary, additional or excess grants and temporary or exceptional grants.
• The Appropriation Bill is a Money Bill; the Rajya Sabha may only recommend changes within the constitutionally prescribed period.
• Effective scrutiny may be reduced when undiscussed demands are guillotined or when the government commands a stable majority.

Audit and post-expenditure accountability

Parliament exercises subsequent control with the assistance of the Comptroller and Auditor General, whose reports are laid before Parliament under Article 151.

• The Public Accounts Committee examines appropriation accounts and CAG reports to determine whether money was spent legally and for the authorised purpose.
• The Estimates Committee recommends economies, organisational improvements and greater administrative efficiency.
• The Committee on Public Undertakings examines the accounts, performance and CAG reports of public enterprises within its remit.
• Committee findings promote corrective action, although parliamentary committees do not themselves enforce expenditure decisions.