Authored by Vishnu Padmanabhan and Priya Soman The Budget speech may have already been scrutinised and the numbers analysed but the Budget process is far from complete. The Constitution requires expenditure from the government’s Consolidated Fund of India to be approved by the Lok Sabha (the Rajya Sabha does not vote, but can suggest changes). After the Finance Minister presents the Union Budget, Parliament holds a general discussion followed by a detailed discussion and vote on Demands for Grants. In the general discussion, the House discusses the Budget as a whole but no motions can be moved and no voting takes place. In the 15th Lok Sabha, the average time spent during the Budget Session on general discussion has been 13 hours 20 minutes so far. Following the general discussion, Parliament breaks for recess while Demands for Grants – the projected expenditure by different ministries - are examined by the relevant Standing Committees of Parliament. This year Parliament is scheduled to break for a month from March 22nd to April 22nd. After the break, the Standing Committees table their reports; the grants are discussed in detail and voted on. Last year, the total time spent on the Union Budget, on both general and detailed discussion was around 32 hours (or 18% of total time in the session), largely in line with the average time spent over the last 10 years (33 hours, 20% of total time). A unique feature of Indian democracy is the separate presentation and discussion for the Railway Budget. Including the Railway Budget the overall time spent on budget discussion last year was around 55 hours (30% of total time in the session).
Note: All data from Budget sessions; data from 2004 and 2009 include interim budget sessions. Source: Lok Sabha Resume of Work, PRS
During the detailed discussion, MPs can call for ‘cut motions’ to reduce the amounts of demands for grants made by a Ministry. This motion can be tabled in three ways: (i) ‘the amount of the demand be reduced to Re.1/’ signifying disapproval of the policies of that ministry; (ii) ‘the amount of the demand be reduced by a specified amount’, an economy cut signifying a disapproval of the amount spent by the ministry and (iii) ‘the amount of the demand be reduced by Rs.100/-', a token cut airing a specific grievance within the policy of the government. However in practice almost all demands for grants are clubbed and voted together (a process called guillotining). In 2012, 92% of demands for grants were guillotined. The grants for Ministries of Commerce and Industry, Health and Family Welfare, Home Affairs and Urban Development were the only grants taken up for discussion. Over the last 10 years, 85% of demands for grants have been voted for without discussion. The most frequently discussed demand for grants come from the Ministry of Home Affairs (discussed in 6 of the last 10 sessions) and the Ministry of Rural Development (5 times). Demand for grants for Defence, the largest spending Ministry, has only been voted after discussion once in the last 10 years.
Source: Lok Sabha Resume of Work, Union Budget documents, PRS
If the government needs to spend any additional money, it can introduce Supplementary Demands for Grants during the year. However if after the financial year government spending on a service exceeds the amount granted, then an Excess Demand for Grant has to be introduced and passed in the following year. The Budget process concludes with the introduction and passage of the Appropriation Bill authorising the government to spend money from the Consolidated Fund of India. In addition, a Finance Bill, containing the taxation proposals of the government is considered and passed by the Lok Sabha after the Demands for Grants have been voted upon.
A change in the Contract Labour (Regulation and Abolition) Act, 1970 may be in the pipeline. According to news reports, the government may amend the 1970 Act to safeguard the interest of contract workers. The proposal is to bring parity between permanent and contractual workers in wages and other benefits. The Contract Labour Act, 1970 regulates the employment of contract labour in establishments which employ 20 or more workmen. It excludes any establishment whose work is intermittent or casual in nature. The appropriate government may require establishments to provide canteens, rest rooms and first aid facilities to contract labourers. The contractor shall be responsible for payment of wages to each worker employed by him. There are penalties listed for contravening the Act. According to the Report of the National Commission on Enterprises in the Unorganised Sector (NCEUS), more than 90% of the workforce is part of the unorganised sector. Contract labour is found in certain activities in the unorganized sector such as in stone quarrying, beedi rolling, rice shelling and brick kiln. The Commission recommended some measures to protect the workers in the unorganized sector such as ensuring minimum conditions of work, minimum level of social security and improved credit flow to the non-agricultural sector. The Report of the Working Group on “Labour Laws and other Regulations” for the 12th Five Year Plan, also proposed that the 1970 Act should be amended. The amendment should ensure that in case of contract labour performing work similar to that performed by permanent workers, they should be entitled to the same wage rates, holidays, hours of work and social security provisions. Furthermore, whenever a contract worker is engaged through a contractor, the contract agreement between the employer and the contractor should clearly indicate the wages and other benefits to be paid by the contractor. However, other experts such as Bibek Debroy, Kaushik Basu and Rajeev Dehejia have recommended broad reforms in India’s labour laws to allow for more flexibility in the labour market. According to them, these laws protect only a small portion of workers in the organized sector.
