Financial Committees

“Financial committees” play a crucial role in a country’s economy and economic stability. It has several functions that ensure parliamentary control over various sectors of finance within the country of India. Parliamentary bodies cannot watch over public finances strictly and that is why they gave this responsibility to the finance committees. These committees are called the “trustees” of parliament. They keep a close watch on the expenditure of the public and provide the information to parliament.

Defining financial committee

A system that takes care of and watches over the public expenditure of India on behalf of the Parliament is called “Financial Committees”. This committee consists of three separate components, namely “Public Accounts Committee”, “The Estimates Committee” and “Committee of Public Undertakings”. 

“Public Accounts Committee ” ensures that economic growth of the country is done based on the public money expenditure. Therefore, it acts as a representative of the parliament. This committee was established in 1921. The test of estimation of public expenditure is carried out by “The Estimates Committee”. This committee was created after the establishment of the Indian constitution. It was created by the suggestion of Dr. John Mathai. “Committee of Public Undertakings was established in 1946, and it consists of 10 members from Loksabha and 5 members from Rajyasabha. The efficiency of public undertakings is understood by this committee. It is done through effective commercial practices and firm business principles.

Functions of financial committees

The three separate components of the financial committee function separately to achieve the same goal of ensuring parliament control over public expenditure.  It also provides information on provisions of risk management of business organisations, financial matters, education, insurance coverage, maintenance of various taxes as well as approval and disapproval of financial boards. The functions of the three committees can be understood separately.

“Public Accounts Committee”

• Appropriation and scrutinisation of accounts are done through this committee.
• It does expenditure confirmation.
• It checks legal availability of money.
• It links re-appropriation with the Appropriation Act.

“The Estimates Committee”

• Economies and improvements of business organisations are reported through this.
• Alternative policies are suggested.
• It checks if the money is properly laid by the policy limit.
• It suggests estimated forms as well.

“Committee of Public undertaking”

• It checks the efficiency and autonomy of public undertakings.
• It examines the Auditor general and Comptroller’s reports on public undertakings.
• It analyses other functions of the estimate committee and public account committee that have a relation with public undertakings.
• Reports, as well as accounts of public undertakings, are also measured by this.

Requirement of Financial Committees

Legislative functions in a democracy are related to the determination of peoples’ will and their conformity. In order to achieve this, time, intense exercise, and expertise regarding law are needed. Committees enter in this critical conjecture to help the parliamentary bodies to exercise and retain control over the various sectors of life of the public. It is done by creating scope for discussions and open debates so that people’s will can be analysed and understood. Governmental actions can also be scrutinised with the help of these discussions. Therefore, committees can also scrutinise administration as well as public actions. It can create effective control over the legislation. Estimates of annual budgets are done through this as well. Economic implementations are suggested by the committees. Therefore, committees play a vital role in determining parliamentary control over the functions and expenditure of the government.

Purpose of financial committee

Financial committees have various purposes and all of these purposes have immense importance to the country and its parliament. Business organisations of India largely depend on these committees as these ensure that the organisations are operating with their proposed financial resources. Economy of the country is deeply related to financial committees as these can determine growth of the country’s economy. However, the purposes of these committees can be described briefly as well in the following.

• The major purpose of financial committees is to perform financial analysis.
• They also provide financial advice to business organisations.
• They provide budget oversight of organisations.

Conclusion 

It can be concluded that “financial committees” are a system utilised by the parliament to gain control over governmental and public expenditure within a country. These committees aim to create a connection between the state and central government of India regarding their finance management. Business organisations’ dependency on these committees is large as they manage various financial matters of the companies.