Points to Remember:
- The question tests knowledge of India’s financial architecture and the roles of different institutions.
- It focuses on who decides the form in which Union and State accounts are kept.
- The correct answer will identify the constitutional body or authority with this power.
Introduction:
The question pertains to the maintenance of accounts for the Union and State governments in India. A well-defined accounting system is crucial for transparency, accountability, and effective financial management of public funds. The Indian Constitution outlines the framework for financial administration, distributing responsibilities among various institutions. Understanding which body dictates the form of these accounts is vital for comprehending India’s fiscal governance. The options provided include the Finance Commission, the Ministry of Finance, the Comptroller and Auditor General (CAG), and the Reserve Bank of India (RBI). Each plays a significant role in India’s financial system, but only one holds the specific power in question. This question requires a factual approach.
Body:
Roles of the Different Institutions:
(A) Finance Commission: The Finance Commission is a constitutional body (Article 280) that primarily deals with the distribution of tax revenues between the Union and the States. It does not determine the form in which accounts are kept.
(B) Ministry of Finance: The Ministry of Finance is responsible for formulating and implementing the nation’s fiscal policies. While it plays a crucial role in financial management, it does not have the sole authority to decide the form of Union and State accounts. The form is prescribed by a higher authority.
(C) Comptroller and Auditor General (CAG): The CAG is an independent constitutional authority (Article 148) responsible for auditing the accounts of the Union and State governments. While the CAG scrutinizes the accounts, it does not determine their form.
(D) Reserve Bank of India (RBI): The RBI is the central bank of India, responsible for monetary policy and regulating the banking system. It does not have any authority over the form in which government accounts are maintained.
The Correct Answer:
None of the options (A, B, C, or D) correctly identifies the body that decides the form of Union and State accounts. The President of India, through executive orders, ultimately determines this. While the Ministry of Finance may propose the form, the final authority rests with the President.
Conclusion:
The question highlights the importance of understanding the roles and responsibilities of different institutions within India’s financial framework. While the Ministry of Finance plays a significant role in financial management, and the CAG audits the accounts, the ultimate authority to decide the form of Union and State accounts rests with the President of India. This underscores the President’s executive power in financial matters. For improved transparency and accountability, it is recommended that the process of deciding the form of accounts be made more transparent and involve wider stakeholder consultation, including representatives from the CAG and the Ministry of Finance, ensuring adherence to best practices in public financial management. This approach would further strengthen India’s fiscal governance and promote sustainable development.
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