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2007 Assessment

India: Integrity Indicators Scorecard

India: Integrity Scorecard Report > Sub-Category: Budget Processes
Indicators		Score
37	Can the legislature provide input to the national budget?	83
38	Can citizens access the national budgetary process?	67
39	In law, is there a separate legislative committee which provides oversight of public funds?	100
40	Is the legislative committee overseeing the expenditure of public funds effective?	81

Indicator and sub-Indicator Details

Can the legislature provide input to the national budget?

37a: In law, the legislature can amend the budget.

Score:

YES

Comments: It is important to record that the budgetary process has its own distinct momentum in a parliamentary system of government. The question seems to be more set to the dynamics of a presidential form of government. In a parliamentary system of government like India's, the budget needs to be approved by Parliament before any expenditure is made or tax is collected. The Lower House of Parliament has greater powers on matters linked to the budget and has the power to amend the budgetary recommendations. It must, however, be noted that because the budget is presented to the legislature by the government, which enjoys a majority in the Lower House, they normally are able to ensure that the budgetary provisions are approved by the legislature. However, this is often preceded by intense debates. Parliament has of late attempted to stregthen the mechanisms for budgetary control by the creation of Department Related Standing Committees in the House. It also must be noted that if the government is defeated on a budgetary proposal it must resign.

References: Rules of Procedure and Conduct of Business in the Lok Sabha/ Rajy Sabha

37b: In practice, significant public expenditures require legislative approval.

Score:

100

$Scoring Criteria :: 100 Score Criteria: All significant government expenditures (defined as any project costing more than 1% of the total national budget), must be approved by the legislature. This includes defense and secret programs, which may be debated in closed hearings. 50 Score Criteria: Most significant government expenditures (as defined) are approved by the legislature, but some exceptions to this rule exist. This may include defense programs, an executive\'s personal budget, or other expenses. 0 Score Criteria: The legislature does not have the power to approve or disapprove large portions of the government budget, or the legislature does not exercise this power in a meaningful way.$

Comments: No expenditure can be made without the approval of the legislature. On occasions, post facto approval has been given. No regularization of expenditure is possible without the sanction of the legislature.Yet a caveat needs to be added. The devil they say lies in the detail! Given the complexity of budgeting procedures and technicalities involved, it becomes possible for the government to limit the quantum of information made available to the House which approves expenditure. As a result it becomes possible for the government to make minor modifications in the broad contours of expenditure and yet present it as being within the larger framework of what has been approved by Parliament. The report of the Comptroller and Auditor General often makes reference to this.

References: Rules of Procedure and Conduct of Business in the Lok Sabha;

Report of the CAG;

www.nic.in

Peer Review Comments: Public expenditures are of different type. It is not necessary that all expenses should have the approval of Legislature or Parliament.

What Parliament debates and approves is the annual budget of the nation as a whole and the railway budget separately. There are any number of expenditure items by various ministries and departments that do not come before Legislature or Parliament.

37c: In practice, the legislature has sufficient capacity to monitor the budget process and provide input or changes.

Score:

100

Comments: Prior to the 1990s, it was found that a large chunk of the budgetary provisions were passed by the House without any debate, simply because of a lack of time. In the 1990s, Parliament adopted the procedure of Department Related Standing Committees (DRSCs), which make a detailed assessment of the budgetary provisions relating to different departments. Their report becomes the basis of parliamentary approval. Reports have appeared in the media on the need to strengthen these mechanisms. It is important to add that often members of the legislature neither have the time nor the inclinaton to seriously monitor the budgetary process. As a result, the government (and often the bureaucracy) is able to define and determine the nature, direction and focus of expenditure.

References: Reports of DRSC's: www.parliamentofindia.nic.in;

Reports of CAG: www.nic.in

Can citizens access the national budgetary process?

38a: In practice, the national budgetary process is conducted in a transparent manner in the debating stage (i.e. before final approval).

Score:

100

Comments: The procedure is quite elaborate and transparent. The challenge is the limited time available to the legislature to do a more comprehensive scrutiny. Further, scrutiny becomes meaningful when it is a top priority of the legislature as a body and legislators as individuals. The focus appears to be on other areas, which they, as a group and individuals, seem to define as important.

References: www.parliamentofindia.nic.in

Peer Review Comments: The process is transparent.

38b: In practice, citizens provide input at budget hearings.

Score:

100

Comments: Citizens have few formal opportunities to participate in budget hearings. There are some opportunities for the general public to interact with the Finance Ministry on budgetary proposals. The Department Related Standing Committees also provides some limited opportunity for common citizens to air their views on budgetary proposals. Given the greater visibility of the media today, citizens often use the media to articulate their views on budget proposals/priorities. Increasingly, NGO's are stepping into the frame and seeking to articulate the views of the groups that they represent.

References: www.palriamentofindia.com;

Times of India www.timesofindia.com;

Indian Express www.expressindia.com;

Deccan Herald www.deccanherald.com;

The Hindu www.hinduonline.com;

The Financial Express www.expressindia.com

newspapers around the last working day of February (the day the budget is presented) and the reporting in the first week of March.

38c: In practice, citizens can access itemized budget allocations.

Score:

100

Comments: Citizens can access the entire budgetary proposals as they are printed at the time of their presentation. There is a general feeling that given the technicalities involved in budget documents, the bureaucracy is often able to hide more than it reveals through budget statistics. The media too highlights the proposals, and this is accessible to citizens. The entire budget proposals are placed on the Web site of the Lok Sabha soon after its presentation.

References: www.palriamentofindia.nic.in;

also news media reports as mentioned in response to previous question

Peer Review Comments: Access is provided.

In law, is there a separate legislative committee which provides oversight of public funds?

39: In law, is there a separate legislative committee which provides oversight of public funds?

Score:

YES

Comments: The Public Accounts Committee

References: www.parliamentofindia.nic.in

Is the legislative committee overseeing the expenditure of public funds effective?

40a: In practice, department heads regularly submit reports to this committee.

Score:

100

Comments: The Public Accounts Committee requires officers to submit information and, at times, to provide oral testimony at the hearings of the Committee.

References: www.parliamentofindia.nic.in;

Reports of the Public Accounts Committee;

www.parliamentofindia.nic.in

Peer Review Comments: Reports are required.

40b: In practice, the committee acts in a non-partisan manner with members of opposition parties serving on the committee in an equitable fashion.

Score:

100

$Scoring Criteria :: 100 Score Criteria: The committee is comprised of legislators from both the ruling party (or parties) and opposition parties in a roughly equitable distribution. All members of the committee -- including opposition party members -- are able to fully participate in the activities of the committee and influence the committee\'s work to roughly the same extent as any other member of the committee. 50 Score Criteria: The committee is comprised of legislators from both the ruling party (or parties) and opposition parties although the ruling party has a disproportionate share of committee seats. The chairperson of the committee may be overly influential and curb other members\' ability to shape the committee's activities. 0 Score Criteria: The committee is dominated by legislators of the ruling party and/or the committee chairperson. Opposition legislators serving on the committee have in practice no way to influence the work of the committee.$

Comments: By and large the Committee has been known to operate in a non-partisan manner. This is largely because the Committee meetings are held `in camera`.

References: Reports of the Public Accounts Committee;

www.parliamentofindia.com

Books on the PAC: Dynamics of Legislative Control over Administrattion (Uppal) Sandeep Shastri; Parliamentary Control over Public Expenditure, Sheshadri.

Peer Review Comments: I think the non-partisan nature of the committee merits a score of 100.

40c: In practice, this committee is protected from political interference.

Score:

100

$Scoring Criteria :: 100 Score Criteria: This committee operates independently of the political process, without incentive or pressure to render favorable judgments on politically sensitive issues. Investigations are rarely praised or criticized by political figures. 50 Score Criteria: This committee is usually independent but is sometimes influenced by negative or positive political incentives. This may include public praise or criticism by the government. 0 Score Criteria: This committee is commonly influenced by personal or political forces or incentives. This may include conflicting family relationships, professional partnerships, or other personal loyalties that ultimately influence the committee\'s behavior and decision-making. Negative incentives may include threats, harassment or other abuses of power by the government.$

Comments: As the Committee deliberations are held in camera, members generally do not take a party line. However, there have been a few occasions when there have been complaints of partisan behavior. This is often not reflected in the reports submitted but in the debate subsequent to the release of the report.

References: www.parliamentofindia.nic.in (for public accounts committee reports); Shastri, Sandeep (1994) Legislative Control over Administration, New Delhi Uppal Publishers; Seshadri (1981) Parliamentary Control over Public Expenditure New Delhi Sterling

40d: In practice, when necessary, this committee initiates independent investigations into financial irregularities.

Score:

100

Comments: The PAC conducts an independent investigation of audit objections and submits its report. The government is also required to submit an action taken report. The only challenge lies in the fact that the PAC is only recommendatory and final action needs to be taken by the government. Here studies have shown that the government often drags its feet in implementing PAC recommendations.