Previous Year Question
Which of the following are the methods of Parliamentary control over public finance in India?
Placing Annual Financial Statement before the Parliament
Withdrawal of moneys from Consolidated Fund of India only after passing the Appropriation Bill
Provisions of supplementary grants and vote-on-account
A periodic or at least a mid-year review of programme of the Government against macroeconomic forecasts and expenditure by a Parliamentary Budget Office
Introducing Finance Bill in the Parliament
Select the correct answer using the codes given below.
1, 2, 3 and 5
1, 2 and 4
3, 4 and 5
All of the above
Correct Answer: A
Detailed Solution
The basic principle of parliamentary control over public finance is that the Executive cannot impose a tax or spend money from the Consolidated Fund of India without legislative authority.
Statement 1 is correct. Under Article 112, the President causes a statement of the estimated receipts and expenditure of the Government of India for every financial year to be laid before both Houses of Parliament. It is called the Annual Financial Statement.
It separately shows expenditure charged on the Consolidated Fund and other expenditure. Expenditure on the revenue account is also distinguished from other expenditure.
Statement 2 is correct. Under Article 114(3), no money can be withdrawn from the Consolidated Fund of India except under an appropriation made by law.
After the Lok Sabha votes on the Demands for Grants, an Appropriation Bill is introduced. Following its passage by Parliament and presidential assent, it becomes the Appropriation Act, providing legal authority for withdrawal from the Consolidated Fund.
Statement 3 is correct. In addition to ordinary budgetary grants, the Constitution provides special grants for other financial requirements.
Article 115: Supplementary, additional and excess grants.
Article 116: Vote on account, vote of credit and exceptional grant.
A vote on account permits advance expenditure for a part of the financial year when the complete budgetary procedure has not yet been concluded.
Statement 4 is incorrect. The independent Parliamentary Budget Office described in the statement was not a constitutional or established institution of India’s parliamentary financial system. Therefore, a compulsory mid-year review by such an office was not a recognised method of parliamentary control.
The Government’s fiscal position may be reviewed through statements presented by the Ministry of Finance and under the Fiscal Responsibility and Budget Management Act, but this is not the Parliamentary Budget Office described in the statement.
Statement 5 is correct. A Finance Bill is introduced in Parliament to give effect to the taxation proposals contained in the Budget. A tax cannot be imposed without parliamentary approval because Article 265 provides that no tax shall be levied or collected except by authority of law.
Other instruments of parliamentary financial control
Voting by the Lok Sabha on Demands for Grants under Article 113.
Discussion of expenditure policies through cut motions.
Examination by the Public Accounts Committee, Estimates Committee and Committee on Public Undertakings.
Parliamentary scrutiny of CAG audit reports.
Question Hour, short-duration discussions and examination of Demands for Grants by Department-related Standing Committees.
Therefore, Statements 1, 2, 3 and 5 describe methods of parliamentary control over public finance.