"Budget transparency and accountability are two of the eight basic indicators of good governance as propounded by United Nations."With this reference, critically discuss the principles followed in budgetary process in India.
Budget transparency and accountability are two of the eight basic indicators of good governance as propounded by United Nations. Budget transparency implies that government gives out all data regarding budget. Accountability refers to that; government is responsible for the correct and optimum utilization of public money sanctioned under the budget. These two traits of budget also involve ethics on the part of the Government. For the sake of clarity and transparency, the revenue and capital portion of the budget are kept separate.
Other principles followed in budgetary process are:
Principle of Annuality
This implies that a budget is prepared every year on annual basis.
Rule of Lapse
Principle of Annuality also implies that the money left unspent in a year must also lapse to the public treasury and government should not be able to spend it unless it is re-sanctioned in next year’s budget.
Budget should be balanced and should be able to display congruence between the income and expenditure.
An inclusive budget includes all government revenue and expenditures and helps evaluating the much required trade-offs between different policy options.
Budget figures are essentially predictions of the amount of money to be generated in the forthcoming year and its expenditure.The Finance Ministry is accountable for maintaining optimum accuracy in prediction. (211 words)
Topics: GS-III: Government Budgeting