The Indian Parliament exercises control over the Executive's financial actions by approving the budget and scrutinizing government spending and financial performance through financial committees. This control operates in two main stages: before and after the appropriation of grants.
Budgetary Control (Pre-Appropriation)
- Enactment of the Budget: The Parliament reviews and approves the budget, which authorizes the government's planned receipts and expenditures for the upcoming financial year. This legalizes government financial activities for that period.
- Approval of Grants: Parliament examines and approves the demands for grants from various ministries and departments, providing funds for government operations.
- Finance Bill and Appropriation Bill: These bills, once passed, allow for the legal collection of taxes and appropriation of funds for specific purposes, as outlined in the budget.
Post-Budgetary Control (Post-Appropriation)
- Public Accounts Committee: Examines the accounts showing the expenditure of the government, scrutinizes reports from the Comptroller and Auditor General of India, and brings to light any financial irregularities.
- Estimates Committee: Reviews estimates of the central government's expenditure and suggests improvements in efficiency and economy.
- Committee on Public Undertakings: Examines reports and accounts of public sector enterprises and evaluates their performance in terms of efficiency, effectiveness, and compliance with policies.
Rule of Lapse and Annuity Principle
- Rule of Lapse: This rule stipulates that any unspent money at the end of the financial year lapses and returns to the Consolidated Fund of India. This ensures that the government cannot build reserve funds without parliamentary authorization.
- Principle of Annuity: The Parliament grants money to the government for one financial year. All expenditures must occur within that year, emphasizing annual approval and oversight.
