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Day 14 – Q 1. What are the accountability and oversight measures in the budgeting processing of the Central Government? Explain.

  • IASbaba
  • June 25, 2020
  • 0
GS 3, Indian Economy, TLP-UPSC Mains Answer Writing
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1. What are the accountability and oversight measures in the budgeting processing of the Central Government? Explain.

केंद्र सरकार के बजट प्रसंस्करण में जवाबदेही और निगरानी के उपाय क्या हैं? समझाएं।

Demand of the question:

It expects students to write about the accountability and oversight measures in the budgeting process of central government.

Introduction:

India has been placed at 53rd position among 117 nations in terms of budget transparency and accountability, according to the Open Budget Survey. The survey, conducted by International Budget Partnership (IBP), has provided India’s Union Budget process a transparency score of 49 out of 100, which is higher than the global average of 45.

Body:

The expenditure of the central government has increased from Rs 3.3 lakh crore in 2000-01 to Rs 30 lakh crore in 2020-21. With the objective of improving the quality of life of citizens, these public funds are spent across various sectors such as defence, security, agriculture, health, social welfare, education, and infrastructure.

Members of Parliament (MPs) have a core role in examining how this money is being raised, how it is planned to be spent, and whether such spending would lead to desired outcomes.  

Accountability and Oversight through the Union Budget:

  • Parliamentary oversight of public funds broadly involves two functions, scrutinising and sanctioning the government’s expenditure and taxation proposals through the Union Budget; and examining the utilisation of funds that have been allocated for various activities, through parliamentary committees. 
  • Legislative control over the budget can be exercised through the General discussion on the budget, after it is presented in the Parliament. Discussion at this stage is limited to general examination of the budget and proposals of the government.  At the end of the discussion, the Finance Minister gives a reply.  
  • After which, parliamentary standing committees which has both members of Lok Sabha and Rajya Sabha a examine detailed estimates of expenditure of all ministries, called Demands for Grants.
  • One of the functions of Standing Committees is to scrutinise the allocation of funds to the ministries under their supervision.  At present, there are 24 Standing Committees that together oversee the work of all the ministries.  For instance, the Standing Committee on Defence scrutinises the Demands for Grants of all departments under the Ministry of Defence. Budgeted expenditure for defence stands at 4.71 lakh crore which is higher by 5% than revised estimates of 2019-20. 
  • These Committees examine the amount allocated to various programmes and schemes under the Ministry, and trends of utilisation of the money allocated to the Ministry.  
  • In doing so, officials of the Ministry are required to depose before the Committee to respond to queries and provide additional information in connection with the Demands for Grants being examined.  While examining a ministry’s expenditure, the Committees may consult or invite views from experts. 
  • Committee’s report to parliament creates condition for informed debate on the budget involving Cut Motions and Voting on Demands for Grants, prior to the beginning of the next fiscal year.
  • Passing of the Finance Bill and the Appropriation Bill without which the Government will not have the constitutional authority to collect tax revenue and to spend money from the Consolidated Fund.
  • Parliamentary Committees dealing with the financial affairs of the government, viz. The Public Accounts Committee, the Estimates Committee, and the Committee on Public Undertakings.

However, Budget transparency and accountability assumes greater significance during the times of the COVID-19 pandemic,

  • As a sizable chunk of public expenditure is likely to get financed by higher magnitudes of government borrowing not just in the current fiscal but in the subsequent couple of years too.
  • Union Government should also publish a Pre-Budget Statement, which can be scrutinised by the legislators and the public at large before the annual budget is presented.
  • Creating an integrated budget and expenditure information architecture at every district headquarter and enabling the District Development Coordination and Monitoring Committee to use this information to enforce accountability of the executive for budget implementation, will substantially improve budget transparency and accountability at the district level in the country.

Conclusion:

The Union Budget is perhaps the most important and comprehensive platform for the Central Government to implement its economic policies. It affects almost every sector of the economy as well as every section of the population. The policies driving the budget and implementation of the budget proposals are therefore of direct relevance to the entire population which needs to be reformed to bring accountability and stringent parliamentary oversight.

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