A STUDY OF AGENCIES OF FINANCIAL
ADMINISTRATION IN INDIA
Presented By:
Dr. Pooja Talreja
M.Com, MBA, M.Phil, Ph.D
Lecturer – BBA Dept.
BYK (Sinnar) College of Commerce, Nashik
Email:
[email protected]M.No: 91-8412946876
Abstract
Finance is the life blood of every organisation. Personnel and materials which are needed for
the functioning of any office, industry and enterprise can be made available only if money is
provided. The efficiency of operating systems and maintenance systems depends upon the
effectiveness of financial system as every administrative act may have financial implications.
The significance of finance to public administration is quite obvious as is evident from the
remark of Lloyd George: "Government is finance".
Key Words
Public administration, financial administration, legislature, financial accountability, financial
ministry, economic affairs.
Introduction
The term Financial Administration consists of two words viz. 'Finance' and 'Administration'.
The word 'administration' refers to organisation and management of collective human efforts
in the pursuit of a conscious objective. The word 'Finance' refers to monetary (money)
resource. Financial Administration refers to that set of activities which are related to making
available money to the various branches of an office, or an organisation to enable it to
carrying out its objectives. Whether it is the Department of Agriculture, Railways, Road
Transport Corporation, Primary Health Centre, Municipality or Gram Panchayat, or for that
matter, a family, its day-to-day activities would depend upon the availability of funds.
Objective of the Study
This work is intended to explain in good details the working of agencies involved in financial
administration in India and to demonstrate that financial administration plays a very eminent
role in the efficient working of any organization, department, etc.
Research Methodology
This paper has solicited the information from secondary data sources such as reference books,
journals, newspapers, magazines, websites, periodicals, etc.
Agencies of Financial Administration
For the success of financial administration of the Government, different constitution play
imperative role. These agencies can be grouped as:
1. Executive
2. Legislature
3. Financial Department of Financial Ministry
4. Auditing Department
1. Executive: According to Prof. H. M. Grover, “The executive is the best position to the
view the financial problem as a whole ant to assume the responsibilities for the success and
failure of a financial programme.” Executive is responsible for running the administration,
thus it is in the best position to say what funds are required for it. No tax or expenditure can
be made without the permission of the executive. It is therefore, the responsibility of the
executive to prepare the budget which is stupendous task.
In Parliamentary Government, there is a principle that no demands for grants can be made
except on recommendation of the executive. It is therefore in India; executive refers to the
Central Government. Since, Finance Ministry is responsible for the administration of the
finance of the Central Government, even then it performs the policy making function and
tries its best to get the final approval of the legislature.
2. Legislature: In democratic parliamentary system, it is the legislature or parliament which
is the time representation of the people. In India, under the constitution there is special
provision to control the finances:
a) Controller over Taxation: Indian constitution under Article 265 provides that no tax shall
be levied or collected except the permission of law. Thus, The Government has to present all
tax proposals before parliament in the form of a Bill to be passed into law and unless no act is
passed, no tax can be levied.
b) Control over Public Expenditure: Indian constitution states that “All revenues received as
loans by the union or state shall be deposited in the consolidated funds of the union or state,
as case may be that no money can be written out of the fund except in accordance with the
law and for the purpose and in the manner provided for in the constitution.”
c) Enforcement of Financial Accountability: Every Government is bound to spend the money
granted by the parliament for no purpose other than it was sanctioned by the legislature or
parliament. This function is performed by the Comptroller and Audit-General of India. In this
way, one can say that Parliament is the supreme in Finance matters.
3. Finance Ministry: This Finance Ministry plays significant role in financial administration
as it ensures proper use of public funds. It controls the both before the presentation of budget
to parliament and in it execution after approval by the parliament. The Finance Ministry
possesses the expert knowledge in financial matters. It considers all proposals to each
ministry in the perspective of the government as whole.
The various scheme and proposals of the different ministries are included in the budget after
consultations and discussions with the finance ministry.
After the final approval of the budget by the parliament, it seeks to ensure that the amounts
are properly spent in accordance with the provision of budget. Therefore, it is the finance
ministry which frames rules and regulations about the preparation and execution of the
budget. The ministry of finance has been divided into four departments, viz
i. Department of Economic Affairs
ii. Department of Revenue and Insurance
iii. Department of Expenditure
iv. Department of Co-ordination
4. Auditing: Auditing is the most important ingredients of parliamentary control over the
finances of country as a whole. In a democratic form of government, the supreme authority
with the regard to financial policy is vested in legislature. This is ensured by the provision of
audit of public expenditure by an independent statutory authority i.e. Comptroller and Audit-
General. Therefore, audit supplies an essential link between the executive and parliament and
helps in interpreting the action.
Conclusion
The financial administration is the crucial aspect of public administration because the running
or management of administration is impossible without money or finance and for that reason
the financial administration occupies the centre of public administration.
Bibliography
References:
1. Prasanna Chandra, Financial Management, Tata McGraw Hill Publication Company
Ltd.
2. Preeti Singh, Financial Management, Himalaya Publishing House.
3. Punithavathy Pundian, Security Analysis and Portfolio Management, Vikas
Publishing House Pvt Ltd.
4. M.J.K. Thavaraj, Financial management, Sultan Chand and Sons.
5. S.L. Goel, Public Finanacial Administration, Sahitya Bhawan Publications.
Newspapers:
1. Business Standard
2. The Economic Times
3. The Times of India
Magazines:
1. Business India
2. Chartered Financial Analyst
3. Dalal Street - Investment Journal
Web Resources:
1. www.google.com
2. www.sebi.gov.in
3. www.tribuneindia.com
