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The Big Picture – Should Budget be Postponed in View of Assembly Polls?

  • January 31, 2017
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The Big Picture- RSTV
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Should Budget be postponed in view of Assembly Polls?

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TOPIC: General Studies 2

  • Powers, functions and responsibilities of various Constitutional Bodies.
  • Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Background

The government decided to abandon the tradition of presenting the next financial year’s Budget on the last working day of February, citing the potential benefits for the economy from faster spending of the approved public expenditure.

With the announcement of elections to five states, opposition parties approached the Election Commission of India seeking that the union budget’s presentation be deferred during the poll process for 5 states – UP, Uttarakhand, Goa, Punjab and Manipur scheduled between Feb 4 and March 8. Opposition leaders are of the opinion that presentation of the budget prior to polls will vitiate the free and fair election environment.

What is the concern?

Free and fair elections are essential elements of having a democracy. The apprehension is that under budget, there may be announcements which may influence the poll result. For example, under sec 80 of Income Tax act, they can prescribe some schemes or reliefs which may influence the voter.

But now, the voter has also become wiser. In the past it has been seen that the crowd was never converted into vote. The voter of the country understands what budget is saying, what concessions they will get and what will be the impact. So they are not easily influenced by budget announcements, unless and until it promises something radical or changes the fundamentals.  However, concerns of opposition are valid on the grounds of influencing the voter.

Government’s prerogative

It was already known to the public domain that the budget will be preponed even before the election announcements. As it is customary and not law governed, the budget date can be changed as the government dims fit.

In a similar instance, the government had appointed a committee headed by Shankracharya to go into the changing of financial year. The report has suggested that it would be better to shift the financial year to the calendar year. If such recommendation is accepted by the government than the government will be presenting the budget in November. This is possible because it is the government’s prerogative.

Role of election commission

  • Election Commission of India is a mature organisation which takes a comprehensive view of things and have a way of dealing with issues, particularly tricky situations. This is the reason why they have succeeded in conducting the elections in relatively free and fair manner.
  • Election Commission is vested with plenary power under article 324 and the question may be asked if Election Commission can use its power and ask government to postpone budget.
  • Though it is not very clear if ECI can use that power under art 324, ECI may give a suggestion to the government to hold back certain announcements related to poll bound states.
  • This can happen so because in the Model Code of Conduct, one of the point is that the ministers shall not go and make announcements about projects and schemes in poll bound state(s).
  • So taking a cue from that, ECI will be well in its jurisdiction to give suggestions to the government.
  • The duty of ECI is to hold free and fair election. In that definition, they have the right to intervene if they think the matter can generate concerns but there cannot be any directive from it to government. Also, whatever will be done will be under the scrutiny of the SC.

Should EC interfere?

  • Election commission has no idea about government’s financial position or the position of economy which demands the budget to address them.
  • Hence, EC cannot determine or suggest government to tell them what is required into budget or not required into budget.
  • Since it’s a national budget and elections are only in 5 states, it will not be proper to defer budget on a later date.
  • If there is a violation of MCC, means the government of the day offers some allurement or influences something, then the ECI can intervene at that stage but not beforehand.

No harm in postponing budget

  • In the past also, in 2012, the budget was postponed due to elections. So, disturbance of schedule is permissible.
  • Budget is mainly about announcements by the government where certain announcements are implemented with immediate effect, whereas other are promises.
  • Not only the budget but even the President’s address to the joint sitting of the Parliament is itself supposed to be the agenda of the government and it is also supposed to be the policy statement.
  • So there is no end to the Election Commission to ensure free and fair election in states and trying to constraint the centre for making policy statements.
  • However, after the announcements if the ECI feels that such could be violative of the MCC, it could intervene. It has happened in past when certain policy decisions and announcements have been withdrawn by the government of the day in view of the Election Commission’s observations.

Finding solution

  • As it is constitutional obligation of ECI to hold elections freely, it is constitutional right of the government to present the budget as such. In a situation like this, it might feel that MCC is interfering with the governance.
  • The elections are happening round the clock that doesn’t mean the governance cannot be done as per the requirement. The main purpose of election is to choose the government. If the government is not performing its role, it is a greater disservice to democracy.
  • Hence, to stop these problems all the time, the MCC should be given statutory shape. Unless that, it will always have a persuasive value. If there is violation of MCC, it is the party that is taken to task and not the government.
  • For arguments sake, it is assumed that there is dissolution of house in March or April. Then the MCC will extend to another 45-60 days. Does it mean that the government cannot present its budget?
  • So there has to be a line drawn between MCC and constructional responsibility to present annual statements of accounts and measures for meeting financial liabilities.
  • There has to be a healthy reconciliation which is possible through proper dialogue. For example important changes can be announced few days before the declaration of results. Less important changes needed for carrying out government activities can be announced early. So the budget can be divided accordingly.

Conclusion

In the present situation, the economy of India following demonetisation and external global economic environment, there are so many challenges that the Indian economy is facing. In view of that, to constraint the government from making policy decisions or announcing the policy decisions including the budget, the Election Commission should not make any pre-emptive strike on either President’s address or PM or any minister making any statement. They should rather enter into dialogue with government to create a conducive environment for elections. There should be healthy reconciliation between right of parliament to have budget and right of government to present the budget and right of election commission to hold free and fair elections.

On government’s part, when the government had made up its mind to change the practice of decades, efforts should have been made by it to take the opposition on board for sharing as well as consultation and taken them into confidence. The opposition is agitated about this fact as well as are concerned about the clashing of budget and election dates which will have an impact on the electorate.

A free and fair elections are one of the pre-requisite for an inclusive and justiciable democracy. Want of power shouldn’t corrupt the fundamentals of the institution.

Connecting the dots:

  • Budget and elections are both provided by the constitution. Examine their roles individually as well as when they both are expected to co-occur.

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