The budget process is covered by live TV and extensively by most newspapers each year. Most large companies have their own analysis of the budget. Increasingly, there is an effort by civil society groups to analyse the budget to decipher the allocations to the social sector. All of this is hugely important and indeed necessary for greater scrutiny and analysis by citizens across the country.
But we at PRS have often spoken about the role of Parliament in effectively scrutinising the government. If there is anything that the Parliament must scrutinise carefully each year, it is the budget – because this is the way in which the government expresses its real priorities. Even if the Parliament passes Bills on any subject – right to education, right to health, right to food, etc. – a good measure of the true willingness of the government to implement any of this can be seen by how much money it is willing to allocate to make things a reality.
Former Finance Minister Yashwant Sinha spoke about the budget process (Times of India, Feb 27th) and has argued that the current process in India is archaic and is in urgent need of an overhaul. He also points that Parliament has little power to change anything in the budget, and argues that this undermines the principles of our Parliamentary democracy. We agree.
On our part, we have produced two documents to help readers understand the budget process better. How to read the union budget and the Union Budget process can both be accessed from our website. And we would greatly appreciate your comments on this and other posts on our blog.
In the last decade, some schemes have been recast as statutory entitlements – right to employment, right to education and right to food. Whereas schemes were dependent on annual budgetary allocations, there rights are now justiciable, and it would be obligatory for Parliament to allocate sufficient resources in the budget. Some of these rights also entail expenditure by state governments, with the implication that state legislatures will have to provide sufficient funds in their budgets. Importantly, the amounts required are a significant proportion of the total budget. There has been little debate on the core constitutional issue of whether any Parliament can pre-empt the role of resource allocation by future Parliaments. Whereas a future Parliament can address this issue by amending the Act, such power is not available to state legislatures. Through these Acts, Parliament is effectively constraining the spending preferences of states as expressed through their budgets passed by their respective legislative assemblies. I have discussed these issues in my column in Pragati published on August 16, 2013.
