📘 Public Administration – Paper II
Financial Management in Indian Administration
1️⃣ Meaning of Financial Management
- Management of public revenue and expenditure
- Ensures proper allocation and utilization of funds
- Supports development and welfare programs
- Ensures accountability and transparency
UPSC Focus: Financial management ensures fiscal discipline in governance.
2️⃣ Budgetary System in India
- Annual Financial Statement under Article 112
- Presented by Finance Minister in Parliament
- Includes Revenue and Capital Budget
- Demand for Grants and Appropriation Bill
Key Feature: Parliamentary approval required for expenditure.
3️⃣ Parliamentary Financial Control
- Public Accounts Committee (PAC)
- Estimates Committee
- Committee on Public Undertakings
- Discussion and approval of budget
Purpose: Ensure executive accountability to legislature.
4️⃣ Role of Finance Ministry
- Preparation of budget
- Control of expenditure
- Taxation policy
- Coordination with RBI and other institutions
5️⃣ Role of CAG
- Audits government accounts
- Reports submitted to Parliament
- Ensures financial propriety
- Strengthens accountability
Impact: Guardian of public purse.
6️⃣ Financial Reforms
- Outcome budgeting
- Zero-based budgeting
- Public Financial Management System (PFMS)
- GST implementation
UPSC Focus Line: Financial management in India is moving towards transparency and performance orientation.
Prepared by Shaktimatha Learning
Public Finance → Fiscal Discipline → Democratic Accountability
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