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Is PAC Going beyond Its Remit by Examining Monetary Policy?
In order to assess, analyse and lay responsibility for a policy decision, whether the benefits or losses are immediately felt or not, a multi-institutional process is required. It is the basic foundation of the principles of oversight, accountability and transparency that institutional complementarities would provide a more holistic and exact picture of the implementation of policy and the performance of those responsible for it. In the case of demonetisation, to assess and lay responsibility for the policy’s shortcomings requires such an approach.
In an unprecedented move, the Public Accounts Committee (PAC) of Parliament under the chairmanship of K V Thomas, a former Congress minister, unanimously decided in December 2016 to review the country’s monetary policy. The PAC’s decision was in the light of the large-scale hardships faced by people due to Prime Minister Narendra Modi’s move to demonetise the ₹500 and ₹1,000 currency notes from 8 November 2016 onwards (PTI 2016). In doing so, the PAC did not deem it fit to wait for the audit report of the Comptroller and Auditor General (CAG), on the implementation of the demonetisation policy. It was perhaps for the first time in the history of the PAC, that a subject was selected for examination within a few days of an event occurring. Further, the review of a government policy and that too, the monetary policy of the government has not been undertaken by the CAG or the PAC, in the last three decades.
Oversight on Demonetisation
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