After PAC nod, govt proposes to hike ministries’ reporting limits for financial expenditure

Syllabus: GS-III

Subject: Economy

Topic: Fiscal policy and Budgeting

Issue: New Instrument of Service

Context: government received approval from Parliament’s Public Accounts Committee (PAC) to revise the financial limits for ‘New Service’ and ‘New Instruments of Service.

  • ‘New Service’ is the expenditure arising from new policy decisions not previously brought to Parliament’s notice.
  • ‘New Instrument of Service’ means a significant expansion of existing policies.


  • With a growing GDP and budget size, upward revisions in financial limits are deemed necessary for efficient governance.
  • There is a need for simplification in the process to facilitate easy adoption by ministries.
  • This would improve decision-making speed and scheme implementation pace.
Prelims connect:

Public accounts committee (PAC):

·          It was introduced in 1921 after its first mention in the Government of India Act, 1919 also called Montagu–Chelmsford Reforms.

·          It is now constituted every year according to the Rules of Procedure and Conduct of Business in Lok Sabha.

·          It presently comprises 22 members (15 members elected by the Lok Sabha and 7 members elected by the Rajya Sabha) with a term            of one year only.

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