Question : Explain how budget can be used as a political instrument.
(2015)
Answer : Budget is statement which represents the revenue and expenditure of the organisation and details about the resource allocation to policies and programs. “These policies and programs are made by the executive to mainly fulfil their promises made in their election manifestoes. They do this, so that their chance of winning the next elections will be high. Here one can observe that budget is made keeping winning the elections as their prime motive.“So this sometimes results ....
Question : Discuss the changes in the powers of the Comptroller and Auditor-General of India (CAG) following a recent Supreme Court judgement in a case concerning a private service provider.
(2014)
Answer : In a recent judgement supreme court upheld that CAG was authorised to examine the accounts of private firms if they were dealing with natural resources.
Office of CAG was written in Article 148 of Indian constitution and provides power to audit the accounts of all govt. undertakings along with all departments of GoI and state govts.This landmark ruling opens up wider spectrum of operations for the CAG bringing up more accountability to the citizens
The Supreme Court ....
Question : “Social auditing of flagship programmes of the Central government facilitates the performance of the Comptroller and Auditor-General.” Elaborate the statement with appropriate examples.
(2014)
Answer : Over the last four decades, CAG has been conducting performance audits of socio?economic developmental programmes of the Central and State Governments. This has gained renewed emphasis over the last decade, with the introduction of new performance audit guidelines in line with international best practices. The demand for social audit has grown in recent years due to the steady shift in devolution of Central funds and functions relating to socio?economic schemes to the local tiers of ....
Question : Finance Commission in India performs the job of statistics aggregation. Comment.
(2013)
Answer : Article 280 of the Indian Constitution provides for the setting up of Finance Commission once in every five years, to recommend to the President measures relating to the distribution of financial resources between the centre and the states. It is entrusted with the task of distribution between the union and the states of the net proceeds of the taxes which are to be or may be divided between them and the allocation between the states ....
Question : Performance budgeting failed because it was applied to sectors/ programs where quantitative evaluation was not feasible. Examine the principles underlying performance budgeting techniques.
(2013)
Answer : The government accepted performance budgeting and initiated the process of change, gradually and cautiously, almost two decades ago. The system has since been introduced in all development departments at the centre. Some of the states like Maharashtra, Punjab, Rajasthan, Tamil Nadu and Uttar Pradesh have introduced performance budgeting in a large number of departments. The progress has, however, been very slow in most of them.
Performance Budgeting improves legislative review by presenting a comprehensive view of ....
Question : The design of the Indian police was to subjugate the Indian people in the aftermath of 1857. Analyze in the context of Indian Police Act of 1861.
(2013)
Answer : The present Indian police system is based on the Police Act of 1861. Under this act the police was made subordinate to the Executive Government. Later, several changes were brought about in the structure as well as functioning of the police system. But the basic structure and characteristics as enshrined in the Police Act of 1861 continued to dominate over the police system in the country. With a huge country with a huge population like ....
Question : Accounting is the essence of producing promptly and clearly the facts relating to financial conditions and operations that are required as a basis of management. Substantiate the statement in the context of accounting methods and techniques in government.
(2013)
Answer : The quality of the information provided in financial reports determines the usefulness of those reports to users. The desired qualitative characteristics of financial information are: understandability; relevance; materiality; reliability; faithful representation; substance over form; neutrality; prudence; completeness; and comparability.
Government accounting is the process of recording, analysing, classifying, summarising, communicating and interpreting the financial transaction and events about government in aggregate and in detail reflecting transactions and other economic events involving the receipt, spending, transfer, usability ....
Question : Justify the Constitutional provisions to treat certain expenditure as charged upon Consolidated Fund of India.
(2013)
Answer : According to Article 266, there shall a Consolidated Fund of India at the Centre and a Consolidated Fund of the State in each State.
The Consolidated Fund of India shall consist of all moneys realized through all revenues received by Government of India, all loans raised by that government by issue of treasury Bills, loans or ways and means advances and all moneys received by that government in repayment of loans. Similarly, all revenues received by ....
Question : ‘Parliamentary Departmental Committees have played their role effectively in analysing the demands for grants.’ Evaluate.
(2012)
Answer : Parliamentary Departmental Committees were established in 1993 for having legislature control over the national finance. Initially, they were 17 in number and had 45 members but number was increased to 24 and members reduced to 31 in July 2004.
Main objective of these committees is to examine annual reports from departments, evaluate various schemes and examine demand for grants during the budgetary process. Major legislative control over national finance that is exercised through these committees during ....
Question : ‘Questions represent a powerful technique of parliamentary control over expenditure.’ Explain.
(2012)
Answer : Parliamentary questions are a medium through which parliament keeps an eye on administration. MPs have right to ask questions to get information from the ministers on matter of public importance. It is implicit and unbounded parliamentary rights of every nongovernmental member to get such information. It is required of MPs as representative of people that they should know about facts and information of activity of government. Questions are asked to know whether the national and ....
Question : What is an output-based performance budgeting system? Analyse this system in the context of India.
(2012)
Answer : Performance budget is that which is prepared on basis of functions, activities and schemes. This is a financial statement which establishes control by budgetary allocation over programs and implementation of the government.
Output budgeting is Indian innovation. Its aim is to convert grants permitted by parliament into real targets. Its main aim is not only just expending the financial grants in time bound manner but also to achieve developmental goals well within time. Government of India ....
Question : “The Comptroller and Auditor-General (CAG) of India is a prosecutor with a law that hobbles its functioning, a judge without the ‘power to sentence and a litigant with no right to appeal.”
(2011)
Answer : In the past few months, the institution of the Comptroller and Auditor-General (CAG) of India has been attacked by senior politicians in a democratic nation. Article 148 of the Constitution provides for a CAG with the legal status of a Supreme Court judge. The CAG’s terms and conditions of service have been determined by Parliament in terms of Article 149 of the Constitution. The legislation is called the CAG’s (Duties Powers and Conditions of Service) ....
Question : The optimism expressed by the proponents of the Financial Responsibility and Budget Management Act 2003, in ensuring fiscal discipline appears to be unwarranted.
(2010)
Answer : The FRBM Act is unusual. Acts of Parliament are usually directed at prescribing the law to be followed by the public or a class of persons or by the government in its dealings with others — either the public at large or a section of it. This Act, on the other hand, is aimed solely at fettering the Centre itself from doing things that Parliament does not want it to do. No party other than ....
Question : The prevalence of multiple channels for transfer of resources form the Centre to the States is stated to have compounded the problems of federal fiscal arrangements. Discuss.
(2010)
Answer : A notable feature of transfers in India is the existence of multiple channels with which to transfer funds. One such channel, the Planning Commission, set up by a Resolution of the Government of India in March 1950, provides assistance by way of grants and loans to the states to meet their plan requirements. Until 1969, the plan assistance to states was given for specific ventures and the degree of assistance, as well as grant-loan components, ....
Question : Examine the role of the Finance Ministry of the Union Government in designing and implementing monetary and fiscal policies?
(2009)
Answer : Monetary and fiscal policies are two main ingredients of business cycle of any country. The approach to business cycle depends upon type of Economy existing in the country. In country like India where after 1991 in the Era of L.P.G. (Liberalization, Privatization and Globalization) the stabilization policies of government is based on the theories of John Maynard Keynes propounded in the backdrop of Great Depression (1936). Keynes says that the business cycle was due to ....
Question : ‘The Budget is more than the economic horoscope of the nation.’ Comment.
(2008)
Answer : A modern budget plays a very important role in the social and economic life of a community. In early days, budget being the statements of estimated receipts and expenditure had only two objectives : (i) how much it has to collect from the tax payers to maintain its necessary activities; and (ii) legislature to vote funds.
In laissez-faire governments, budget was a simple statement of estimated income and expenditure. But in modern society, the functions of ....
Question : “Parliamentary Departmental Committees have played their role effectively in analyzing the demands for grants.” Evaluate.
(2007)
Answer : The Parliamentary Departmental Committees (PDC), over the years, have been emerged as the chief instrument for analyzing the demands for grants.
The POCs were created to exercise control over the executive, particularly financial control. Each committee consists of 45 members 30 from Lok Sabha and 15 from Rajya Sabha. The term for office of each committee is one year.
For analyzing the demands for grants, the PDC follows a certain procedure. After general discussion, the house is ....
Question : “Audit, like the judiciary, the executive and the legislature is one of the important ingredients of democracy”. Comment.
(2006)
Answer : In any democracy it becomes imperative for the parliament to check whether the executive is spending the funds in a responsible, efficient and prudent way. The purpose is served by the Audit, which shows the inadequacies if any in spending the money. Thus it is one of the most important ingredients of democracy.
The primary purpose of audit is to ensure that the money has been applied to the purpose for which the grants made by ....
Question : “Audit provides a healthy safeguards against public money going down the drain”. Comment.
(2005)
Answer : In case of governmental activities, audit acts as a watchdog of the nation’s financial interests. The administrative structure of the state is so vast and its operation so complex. That it is impossible for an ordinary tax payer to know that the money contributed by him/her to the running of the state is being misused. Audit helps to highlight losses, waste and under-utilisation of capacity due to improper decisions at the appropriate levels.
Constitutional Mandate of ....
Question : “Public Accounts Committee conducts a postmortem examination of public accounts”.
(2005)
Answer : Public Accounts Committee is said that its control is like post-mortem type i.e. it examines the accounts when the expenditure has already been incurred and the waste and misuse of the powers, if any, have been made by the executive authorities. But this does not mean that the recommendations of the committee are not futile.
Thus, the general charges levelled against the committee is that its work is only post-mortem. It is true that committee’s work ....
Question : “ The Estimates Committee is ‘a continuous economy committee.”
(2004)
Answer : The Estimate Committee is an instrument of parliament set up with the primary aim of scrutinizing the estimates included in the budget and to make positive suggestion to introduce economy in govt. expenditure. Within this broad objective, the function of the Estimates Committee are to report what economies and improvements in organizational efficiency or administrative reforms, consistent with the policy underlying the estimate may be affected., to suggest alternative policies in order to promote further ....
Question : “Questions represent a powerful technique of parliament control over expenditure”. Comment.
(2003)
Answer : Parliamentary question is a powerful technique of parliamentary surveilliance over the administration practiced in all the countries having representative parliamentary democracy. In this system, the government is answerable for all its acts of omission and commission to the parliament and through the parliament to the people. This answerability or accountability of the administration is exercised at two levels.
The House exercises this power collectively by itself and through its committees.
The questions are directed towards the proper ....
Question : “The role of Comptroller and Auditor General is limited one”. Comment.
(2002)
Answer : Comptroller and Auditor General is a unique position in Indian constitution, which acts as a watchdog over public expenditure. He is the one single authority on whom vest the combined responsibility to safeguard public money through examination of accounts of government receipts and expenditure.
The Comptroller and Auditor General is responsible for auditing all expenditure from the revenues of the central or state governments. In its report, CAG satisfies himself about faithfulness, economy and wisdom of ....
Question : “The policy of the government is reflected by various items of the budget”. Explain by distinguishing between a commercial budget and a government budget.
(2001)
Answer : Government budgeting is one of the major processes by which the use of public resources is planned and controlled for public good. To the extent that this is done, governmental programmes are brought increasingly to the service of the citizens, enhancing their material standard of living and cultural status. Budget has become an instrument of public accountability, a guide for optimization of scarce public resources as marketed by public representative, a tool of transparency and ....
Question : “He is the audit of propriety that distinguishes the audit of comptroller and Auditor General of India (CAG) from the audit made by any professional auditor.”
(2001)
Answer : The duty of auditor whether it is CAG or Professional auditor is to see that all the transactions of an organization or documents papers and accounts are drawn according to prescribed rules and regulation to which such organizational unit is subject to and all other statutory obligation has been complied while transacting any business. So, the audit conducted by CAG or Professional auditor is in the nature of Post Mortem, that is, it is conducted ....
Question : “Control over public expenditure is an essential feature of accountable and responsible financial administration.” In the light of this statement discuss various methods of control over public expenditure which are exercised by Indian Parliament.”
(2001)
Answer : Control over public expenditure is an essential feature of accountable and responsible financial administration. It is imperative that the expenditure made from public funds be prudently made, no waste of resources occur, the money is not misappropriated, grants are made hastily. The public is not put under increased financial burden and, for the money spent adequate results are obtained.
In India, control over public expenditure is exercised through:
Question : “The Public Accounts Committee is probably the best medium through the eyes of which the tax-payer sees what has been done with his money.” Comment.
(1999)
Answer : The main function of the Public Accounts Committee (PAC) is to examine the Appropriation Accounts containing the appropriation of moneys granted by the parliament, the Annual Finance Accounts of the executive government and such other Accounts laid before the House as the committee may think fit. While scrutinizing the Appropriation Accounts and the Audit Report thereon by the Comptroller and Auditor General, the Public Accounts Committee has to satisfy that itself, that public moneys have ....
Question : Do you think that the CAG’s role is to maintain the dignity, independence, detachment of outlook and fearlessness necessary for a fair, impartial and dispassionate assessment of the actions of the executive in the financial field? Give arguments.
(1999)
Answer : Financial control of the administration is the bulwark of parliamentary democracy and for exercising financial control an independent audit agency is an essential pre-requisite. The office of Comptroller and Auditor General of India is a constitutional device to ensure parliamentary accountability, federal supervision and expert administrative control over expenditure in the financial administration. The fundamental basis of the parliamentary system of government is the responsibility of the executive to the legislature for all its actions. ....
Question : “CAG should be a watch dog and not a blood-hound.”
(1998)
Answer : The Ministry of Finance administers the finance of the government. Its responsibility is to formulate the “ Annual Financial Statement” in consultation with other administrative ministries; after parliamentary approval of the Budget it controls the entire expenditure of the governments, the objective being realization of economy in the spending of public money by the administrative ministries.
The Finance of Finance is headed by a Minister of cabinet rank. It has three departments:
Question : “The main function of the Public Accounts Committee is to ascertain that the money granted by parli ament has been spent by the government within the scope of the demand”. Comment.
(1997)
Answer : The main function of the PAC is to examine the report of the Comptroller and Auditor General of India (CAG), which is laid before the Lok Sabha through the president.
If examines the accounts showing the appropriation of sums granted by Annual Financial Accounts of the central government and any other accounts laid before the house as the committee may think fit. CAG report is divided into two parts- The Finance Accounts set out receipts disbursement ....
Question : “The CAG is the friend, philosopher and guide of the Public Account Committee.” Comment.
(1996)
Answer : The audit reports of the CAG are landed over to the PACs at the centre and the Accountants General of the states do so at the state level.
The work of the Public Account Committee (PAC) is based on the audit reports of the CAG. The functions of this officer is provided by the constitution. His report is usually prepared after giving each ministry an opportunity to offer explanations or comments on the relevant portions of ....
Question : The Estimate Committee merely gives a big list of advices. Comment.
(1995)
Answer : The Estimates Committee is an instrument of parliament set up with the primary aim of scrutinizing the estimates included in the budget and to make positive suggestions to introduce economy in government expenditure. But as the advices rendered by the committee not binding on the government if it has a majority in parliament it has been said over and over that estimate committee merely gives a big list of advices. There are other provision and ....
