Standing Committee on Finance

The functions of the committee are stated as below:

• To consider the Demands for Grants of the concerned ministries or departments, preparing reports on the same which are to be tabled in both the houses.
• To examine such bills pertaining to the oversight ministries as are referred to the committee by the Speaker, Lok Sabha or the Chairman, Rajya Sabha.
• To consider the annual reports of the concerned ministries or departments.
• To consider national basic long-term policy documents presented to the houses, if referred to the committee by the Speaker, Lok Sabha or the chairman, Rajya Sabha.

The Standing Committees shall not consider the matters of day-to-day administration of the department.

Proceedings, Draft Reports and Minutes of the committee are treated as ‘Confidential’ until the concerned reports are presented to Parliament.

Working of the committee has been designed so as to keep individual opinions and statements as confidential, so, that the atmosphere within the committee is more open to discussion without the need to toe the party line or indulge in political grand standing [sic]. The report presented by the committee "is based on a broad consensus and has persuasive value to be treated as considered advice. Hence it is not binding in nature. It is for the minister in charge of the Bill or any member to move necessary amendments in the House in the light of the recommendations or suggestions made by the committee.[10]

It ensures that detailed scrutiny of government finances, legislation and working continues to take place even if Parliament sessions are disrupted. With a representation of members from across political parties, these committees also act as a consensus-building platform.[11]

After the general discussion on the budget in the House is over, the Lok Sabha is adjourned for a fixed period. The Committee considers the Demands for Grants (DFGs) of the concerned ministries or departments under its jurisdiction during the aforesaid period and presents reports on them to the House. There is a separate report on the DFGs of each ministry or department.

The committee considers only such bills introduced in either of the houses as are referred to it by the Speaker, Lok Sabha or the chairman, Rajya Sabha as the case may be.

The committee also selects other subjects for examination on the basis of annual report of the ministries and departments under its jurisdiction

In terms of direction 73A, the minister concerned of the ministry or department makes a statement once in six months in the House regarding the status of implementation of the recommendations contained in the reports of the DRSCs with regard to her/his Ministry. This is aimed at ensuring that the recommendations of the Standing Committee are taken note of at the highest level by the government for follow up action not suggest anything of the nature of cut motions. The Demands for Grants are considered by the House in the light of the Reports of the committee.

The committee has deposed the RBI governor and other government officials since the announcement for demonetisation was made. In Oct 2018, summoning the RBI governor for the third time, Chairperson Moily said, "[a]fter our meetings with the RBI chief and other senior officials of the RBI, it had given us a report. Now, we have called RBI governor Urjit Patel to come and brief us on demonetization and a legislative bill. Some members might also want to ask him questions." The notice for the meeting says, “Oral Evidence of the representatives of Reserve Bank of India on (i) ‘Demonetisation of Indian currency notes of Rs 500 and Rs 1000 and ramifications thereof’ and (ii) ‘The Banning of Unregulated Deposit Schemes Bill, 2018’ and issues related thereto."[12]

In a sweeping recast of India’s annual budget process, the government ended the 92-year-old practice of having a separate rail budget. Commenting on this, Chairperson Moily said, "[w]e will discuss this issue with statistics and planning department, and also with the finance ministry. Railway Board, an important cog in this merger process, too will be consulted on the impact of this budgetary reform on Railways as an organization."[13]

The committee questioned the finance ministry civil servants including the Union Financial Services Secretary, Rajiv Kumar about the ₹11,400 crore (equivalent to ₹150 billion or US$1.9 billion in 2023) fraud in Punjab National Bank (PNB) and asked them to submit a report on it. It is currently on its way to becoming India's biggest banking fraud. Other members noted that "[t]heir concern over such large scale [sic] fraud in the PNB and questioned the re-capitalization process of the state-run banks when they are not well managed and tax payers [sic] money is leaking".[14]

The committee took up the case of debt-ridden Infrastructure Leasing & Financial Services, which defaulted on debt obligations for scrutiny a day after the government sacked the 15-member IL&FS board and nominated six new directors led by Uday Kotak, to run the affairs of the company.[15] The chairperson of the SCOF, Moily said that "[w]hatever has happened at IL&FS is a matter of grave concern. It is a fit case for the Parliamentary Standing Committee on Finance to look into. As the chairman, I will take up the matter in the committee meeting" [16]