The origin of this committee can be traced to the standing financial committee set up in 1921. The first Estimates Committee in the post-independence era was constituted in 1950 on the recommendation of John Mathai, the then finance minister. Originally, it had 25 members but in 1956 its membership was raised to 30. All the thirty members are from Lok Sabha only. The Rajya Sabha has no representation in this committee. These members are elected by the Lok Sabha every year from amongst its members, according to the principles of proportional representation by means of a single transferable vote. Thus, all parties get due representation in it. The term of office is one year. A minister cannot be elected as a member of the committee. The chairman of the committee is appointed by the Speaker from amongst its members and he is invariably from the ruling party.
The functions of the committee are:
- To report what economies, improvements in organisation, efficiency and administrative reform consistent with the policy underlying the estimates, can be affected.
- To suggest alternative policies in order to bring about efficiency and economy in administration.
- To examine whether the money is well laid out within the limits of the policy implied in the estimates.
- To suggest the form in which the estimates are to be presented to Parliament. The committee continues the examination of the estimates from time to time, throughout the financial year and report to the House as its examination proceeds. It is not incumbent on the committee to examine the entire estimates of any one year. The demands for grants are finally voted despite the fact that the committee has made no report.