📘 Model Answer 22
Financial Accountability in India
Question
Model Answer (250 Words)
Financial accountability ensures that public funds are used efficiently, legally, and in accordance with legislative intent. In a democratic system, it safeguards transparency and prevents misuse of resources.
The Constitution provides institutional mechanisms such as the Comptroller and Auditor General (CAG), who audits government expenditure and reports to Parliament. Parliamentary committees like the Public Accounts Committee (PAC) and Estimates Committee scrutinize financial performance.
The Finance Commission regulates fiscal transfers between the Union and States, promoting balanced federal finance. Budgetary procedures, appropriation acts, and legislative approval processes further strengthen oversight.
Recent reforms include outcome budgeting, performance-based evaluation, Public Financial Management System (PFMS), and digital transparency platforms to track real-time expenditure.
However, challenges such as fiscal deficits, off-budget borrowings, and implementation gaps persist. Strengthening internal audit systems and enhancing citizen participation through social audits can improve accountability.
Thus, financial accountability in India operates through constitutional, legislative, and technological mechanisms, forming a cornerstone of democratic governance.
Prepared by Shaktimatha Learning
CAG + Parliament + Reform Mechanisms = High Governance Marks
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