Participatory Budgeting in India

According to the International Budget Project (IBP), participatory budgeting is the process by which citizens deliberate and negotiate over the distribution of public resources. Participatory budgeting creates opportunities for engaging, educating and empowering citizens, which can equip and advance a more vibrant civil society.

Union Budget affects almost every sector of the economy and the policies driving the budget and implementation of the budget proposals are of direct relevance to the entire population. However, neither the budget process nor the budget policies come under substantial public scrutiny. The entire exercise of budget-making remains shrouded in complete secrecy till the budget is presented in the parliament. Only then, the general public gets relief from the vague guesswork of media. While budget presentation in the Parliament and subsequently its legalisation are quite transparent, the process of budget preparation by the Government is rather closed.

The interest and participation of the civil society in Budget making process has increased in recent times. In countries such as US, South Africa, New Zealand, the UK, the governments provide extensive information to their citizens on budget, while in India, only limited information is available to the public as well as parliament.

Status of public participation in Budget making in India

The process of the budget preparation starts in the month of September every year. The Budget Division of the Ministry of Finance collects estimates of expenditure of the next fiscal year and after a scrutiny of these estimates, the Ministry of Finance finalized these estimates. Prior to finalization, the finance ministry holds discussions with concerned ministries and departments. The finance minister has authority to make changes in consultation with the Prime Minister. The Budget is briefed to President and also Cabinet shortly before it is presented in the parliament. During the process of budget making, various lobby groups, representing the interests of industrialists, traders and exporters are able to express their interests. However, there is no visible lobbying with the Finance Ministers for the poor and marginalized sections of the population.  Thus, general public and civil society organizations have been traditionally excluded from the budget making process in India. Thus, open and participatory budget making is imperative for good governance; yet by international standards India fares badly on this count.

Reasons for low participation

One of the major obstructions in public involvement in the budget process is the inability of majority of people to understand budget terminology and budget-related debates. Given the technicalities associated with budgets, even the highly educated people could be budget-illiterates, and unable to grasp the arguments put forward in the debates over budget policies.  Majority of the population in India gets to know about the Union Budget when it is covered in the media, i.e., during the immediate interval of budget presentation in the Parliament.

Arguments for Participatory Budgeting

There are several arguments making a case of active public participation in budget process in India. These are discussed as below:

  • The budget embodies the socio-political and economic policy priorities and fiscal targets of the government. Since the gov­ernment cannot spend or raise public money without the authorisation of Parliament which in principle amounts to people’s sanction; the people have a right to know how the public resources are being raised and spent.
  • Openness or transparency is an in­dispensable principle of public finance management and it is a prerequisite for answerability. However, one can argue that the people have exercised their vote in the elections and elected representatives do the work of creating budget. However, participation of the informed citizens in crucial budget process is warranted in between the elections
  • It has been further argued that informed citizens make a very small fraction of the large population of India. However, looking at the nil participation of the public in the budget making process, civil society must be given an opportunity to raise issues relating to the vulnerable sections of the population.
Initiatives towards public awareness

A few civil society organisations in India at the national and state levels have been focusing on budget work with a pro-people perspective. Some of them have come up with very significant and innovative work in their areas. Developing Initiatives for Social and Human Action (DISHA) is perhaps the pioneer organisation in India working on budget analysis with perspectives for marginalised sections of people. There are other organisations like the Public Affairs Centre, Centre for Budget and Policy Studies, Samarthan Centre for Budget Studies, Centre for Budget and Governance Accountability (NCAS programme), Social Watch Tamil Nadu, and Budget Analysis Rajasthan Centre, which work on budget analysis mainly with the viewpoint of the social sector and other sectoral issues. Most of their work is centred on post-budget analysis of allocation for the social sector and its implications. Budget groups’ low involvement in shaping or influencing budget decision-making is said to be because of the closed budget formulation process of the government.

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