Posted In: Economy Peoples Initiatives transparency PAC budget 2011-12 CAG governance accountability debt servicing defence expenditure
Indian people have a very marginal role in the budget making process.The Indian Budget is made by the Executive in consultation and in line with the policy prerogatives set by big business houses, multinationals and their associations and confederations; it is considered and adopted by the Legislature which cannot or does not question many parts of the budget; it is implemented by the administration and government agencies without any accountability towards the people; the post-evaluation of achievement and performance is done by the Public Accounts Committee, Estimates Committee, Committee of Public Undertakings, etc of Parliament. All these Committees have no compulsion to prove to the people that the budget was made in the interests of the people and implemented efficiently to maximize returns for them. The Comptroller & Auditor General (CAG) was set up as an instrument to secure accountability of the Executive to the Legislature. The office of the CAG has the responsibility of independently assessing and evaluating the effectiveness of outcomes generated by the fiscal process. But as the 2G scam has revealed, the CAG is only an advisory body. Finally the interests of the big business houses prevail. The Executive and Legislature work for their interests and settle their differences through concessions and negotiations. Various organizations such as DISHA, Centre for Budget and Governance Accountability, Social Watch, and others have been working on analyzing government expenditures in the social sector and demystifying the budget for the people. The crucial numbers that people’s organizations need to look out for in Mr Pranab Mukherjee’s budget speech are: i) how much interest expenditure does the Government of India incur on debt servicing and ii) how much money is spent on military expenditure. In the coming financial year, the central government’s net tax revenue will be Rs 6.64 lakh crores. Of this revenue, the lion’s share will go towards debt servicing expenditure (repayment of debt + interest payments) which will be of the order of Rs 3.69 lakh crores, i.e. about 66% of tax revenues! The government will be further spending Rs 1.64 lakh crores on defence services (revenue + capital), i.e. nearly 25% of tax revenues. An article in The Hindu estimates tax giveaways for the year 2010-11, including excise-customs waivers to be more than Rs 5 lakh crores! All these unproductive expenditures and giveaways to big business houses hardly leave any money for providing for the essential needs of the common man. Just as an illustration, while the education and health sectors in India are crying out for more investments, the government has allocated only around Rs 21,000 crores for the social services which include education, health, broadcasting and others. Debt servicing and defence expenditures are “charged” directly to the Consolidated Fund of India and not submitted to the vote of Parliament though Parliament supposedly has a right to discuss it. If anyone wants to know who in Parliament is awake and aware of our country’s economic and financial good, then they should watch out for anyone who discusses or wants to discuss the size of this amount! There is an urgent need to demystify the budget and make the budgeting process transparent and accountable to the people. The budget is being made supposedly to manage people’s money but without providing them any mechanisms for participating in it and exercising their say. The budgeting process of the Indian government follows the British system of public finance, imposed by the colonisers. Till recently, the budget session started at 5 pm on the last day of February -- a tradition that the colonial government observed for the convenience of its masters in London. This tradition was done away with, but not the process. The Indian budget is made by a coterie of ministers behind closed doors and people have no clue about it till the final hour when the Finance Minister pompously walks into the Parliament and starts reading his speech. People’s organisations have to take up this issue of educating the people on the process of budgeting and playing a decisive role in deciding the orientation of the budget itself even more seriously than they have done till now. Mechanisms have to be devised to enable people tom participate directly in the budget making process and to demand that their elected representatives work for their interests and not for the interests of the moneyed class. This would need relooking into the Constitution which defines the budgeting process and examining the roles of audit mechanisms set up by it.