UPSC CURRENT AFFAIRS – 23rd March 2025
Reclaiming the Power of the Purse — Restoring Parliament’s Role in India’s Budget Process
Why in News?
Concerns have been raised over the limited role of Parliament in India’s budget-making process, which is largely dominated by the executive. There are growing calls for institutional reforms, including pre-Budget discussions and the creation of a Parliamentary Budget Office (PBO), to enhance legislative oversight and democratic accountability.
Key Issues with India’s Budget Process
- Executive Monopoly:
- The Ministry of Finance prepares the entire Budget in secrecy.
- Even Cabinet Ministers are often unaware of allocations until presentation day.
- Ceremonial Role of Parliament:
- Budget is introduced without pre-legislative consultation.
- MPs cannot amend budgetary provisions — they can only discuss and vote.
- Rajya Sabha’s Exclusion:
- Money Bills (Article 110) are not subject to voting in the Upper House.
- Ironically, the Finance Minister may belong to the Rajya Sabha, yet cannot vote on their own Budget.
- Guillotining of Demands for Grants:
- A large number of budgetary allocations are passed without any debate.
- Average time spent on Budget debates in Parliament is just 12 hours (PRS Legislative Research, 2023).
Consequences of Legislative Marginalisation
- Weak Accountability: Erodes the foundational democratic principle of “power of the purse.”
- Poor Quality of Debate: Limited access to data and research reduces effectiveness of scrutiny.
- Reduced Transparency: Decisions about taxation and spending become opaque and top-down.
Global Best Practices
- USA:
- The Congressional Budget Office (CBO) offers non-partisan analysis of fiscal policy and legislative proposals.
- UK, Canada, Australia:
- Operate Parliamentary Budget Offices (PBOs) to empower MPs with independent economic analysis and fiscal projections.
- Open Budget Index (2021):
- India ranked 53rd out of 120 countries, lagging behind nations with institutional legislative support systems.
Constitutional Provisions in India
- Article 112: Union Budget is presented as the Annual Financial Statement.
- Article 110: Budget is classified as a Money Bill — exclusive to Lok Sabha.
- Article 75(3): The executive is collectively responsible to the Lok Sabha, implying budgetary accountability.
Proposed Reforms
- Institutionalise Pre-Budget Discussions:
- Conduct structured debates during the Monsoon Session (5–7 days).
- Facilitate broader consultation on economic priorities, fiscal trends, and public needs.
- Establish a Parliamentary Budget Office (PBO):
- Provide MPs with independent, non-partisan fiscal research.
- Analyse tax policies, public expenditure, debt sustainability, and policy impacts.
- Examples: US CBO, Canada’s PBO, and UK Office for Budget Responsibility.
- Strengthen Standing Committees:
- Allocate technical and research staff to Departmentally Related Standing Committees (DRSCs).
- Enhance scrutiny of Demands for Grants and ministry-wise expenditure.
Addressing Concerns Over Populism
- Critics fear greater legislative involvement may lead to populist fiscal policies.
- However, OECD studies show that countries with transparent and participatory budgeting enjoy:
- More equitable resource allocation.
- Better fiscal discipline.
- Higher public trust in institutions.
Conclusion
- The current budgetary framework in India dilutes legislative sovereignty, undermining the essence of representative democracy.
- Reforms such as pre-Budget deliberations and the creation of a PBO are not just procedural; they are essential to transparency, accountability, and evidence-based policymaking.
- A stronger, research-backed, and participatory Parliament will ensure that budget decisions reflect the will and welfare of the people, not just the priorities of the executive.
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I don’t think the title of your article matches the content lol. Just kidding, mainly because I had some doubts after reading the article.