Free India’s budgetary process, still colonial and obfuscating
I had the opportunity of sharing some of my stray perceptions with a group of
front ranking grass roots activists on the Union Budget 2009-10 (General) in a
special colloquium called by CRY (Child Relief and You) at Red Cross Bhavan,
Bhubaneswar on 18th Aug. 2009. For obvious reasons, the paper prepared for the
occasion was titled, ‘India’s Union Budget 2009-10 as a child might see it’
http://www.box.net/shared/icl16aaxgg. In justification of the said title, the
paper not only dealt with child related provisions made in the last budget, but
also, and more importantly, endeavored to dissect and demystify the otherwise
abstruse budget making process in vogue in India over the decades, so that even
a child might grasp it. Briefly stated, the major contentions of the said paper
were the following-
- Unlike in other democracies of the world, the legislatures of India
i.e. Parliament and/or State Assemblies have no voting power over the Budget’s
major component (items of charged expenditure), while it has a ridiculously
limited and ambiguous voting power (only to reduce the estimated amount, as
exercised through so-called ‘cut motions’) in respect of items of non-charged
expenditure called Demand for Grants. (Vide Article 113 of the Constitution).
Ironically, this Article, except for substitution of the words ‘Consolidated
Fund of India’ for ‘revenues of the Federation’, ‘Parliament’ for ‘legislature’
is a verbatim reproduction of Sections 34 (1) and (2) of Government of India
Act 1935 which on its enactment by the British Parliament remained in force for
governance of India right up to the proclamation of the present Constitution in
1950.
- In today’s situation when the income of the Railways has come down
to a paltry 15% of the total budget estimates, there is no justification to
continue to adhere to the tradition of making a separate presentation of
Railway Budget as was the practice in colonial era right since 1924.
- Poverty of official Statistics is more appalling than the official
Statistics of Poverty, for not only the latter is a gross, arbitrary
underestimation of the ground reality but also suffers from glaring incongruity
and ambiguity, as the Report of National Commission on Enterprise in
Unorganised Sector (2004-2009) has clearly pointed out. Instead of addressing
the core issue of reconciling the nakedly inconsistent figures culled from
multiple sources of the Government, the current Budgetary process evasively
builds on the statistics of its choice and is therefore bound to falter and
fail in redressing the real woes of the nation.
- The GDP (Gross Domestic Product), as an overarching tool for
measuring the growth and prosperity of a nation might have been relevant at
some point of history to the ‘developed’ economies, where the overwhelming bulk
of its population and their myriad transactions have been ‘commodified’ i.e.
measurable in monetary terms. Even then there is a growing expert opinion in
those countries against continued adherence to GDP-based growth model,
especially following the onset of the ongoing global financial crisis. In a
country like India where overwhelming bulk of its population still survive
largely outside the pale of ‘economic’ transactions, there is no justification
at all to laboriously construct a ‘budget’ that touches only a miniscule,
‘financially’ affluent and speculative section of total populace. The cruel
fact as underlined by Prof.Sengupta, Chairman, NCEUS that a developmental
process during the past decade
and half where GDP grew spectacularly but 77% of population, ‘poor and
vulnerable’ were left in a lurch with a good-for-nothing income level of
Rs.20/- per day, is a wake-up call for re-looking into the very grammar of
India’s budget making which for no rhyme or reason has built itself up on the
imported notion of GDP.
- It is simply incomprehensible while the so-called FRBM (Fiscal
Responsibility and Budget Management) Acts (that mandated the reduction of
Revenue Deficit to zero and that of fiscal deficit to only 3% by 31st March
2009) which were enacted a few years back with much fanfare by Government of
India and most of State Governments and which are still in place, the Union
Budget for 2009-10 proposed a Fiscal Deficit of 6.8% (highest in 16 years).
It’s not a blanket suggestion of the author that there couldn’t be a fiscal
deficit at all, but what he suggests is that the said Acts should have been
amended suitably before providing for any budgetary deficits. Otherwise where
stands the paramount concern i.e. the sanctity of law passed by the Parliament
or a State legislature?
- Though Keynesian dogma (increased public spending in a time of
recession) is no longer fashionable elsewhere in the world, especially since
the onset of a new era of stagflation in late 70s of the last century, India’s
leading politician-economists such as PM Manmohan Singh, HM Chidambaram and FM
Pranab Mukherjee seem to remain still ensnared by it, as is evident from the
massive fiscal deficit made in the last budget on the rationale of increased
allocations for public welfare programmes like NREGA, Food Security and Sarva
Siksha Abhuyan. Given the abysmally poor system of governance that afflicts
every sector of Indian economy, the lion’s share of the increased allocations
shall continue to be pocketed by a miniscule of the total population (nexus of
corrupt bureaucrats- contractors-suppliers) instead of reaching to the intended
majority. The outcome shall prove more disastrous- price inflation of some
consumer goods leading
to further impoverishment of the masses of people. Sooner such anachronistic
fascination with Keynesian pump priming goes, the better for India.
Above all, the paper taking the cue from the statement of former Union Finance
Minister Yashowant Sinha in the last budget session of the Parliament, called
for a wider debate at national level on the existing procedure of budget making
and presentation, which is characterized, as in colonial era by secrecy,
over-technicalities, lack of Parliamentary control and above all absence of any
public power to influence its course.
Chitta Behera, 23rd Aug. 2009
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