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UPSC CURRENT AFFAIRS – 23rd March 2025

Home / UPSC / Current Affairs / Reclaiming the Power of the Purse — Restoring Parliament’s Role in India’s Budget Process

Reclaiming the Power of the Purse — Restoring Parliament’s Role in India’s Budget Process

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.

Reclaiming the Power of the Purse — Restoring Parliament’s Role in India’s Budget Process

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.
Consequences of Legislative Marginalisation

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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