The Hindu Editorial: Published on 22nd March 2025:
Why in News?
The debate over India’s budgetary process has gained attention due to concerns that Parliament has minimal influence over financial policies. The government-driven process leaves little room for legislative scrutiny, sparking discussions on the need for pre-Budget discussions and the establishment of a Parliamentary Budget Office (PBO). These reforms could enhance transparency, fiscal discipline, and democratic accountability.
Key Issues in India’s Budgetary Process-
1️. Executive Monopoly:
The Finance Ministry single-handedly prepares the Budget without significant consultation with Parliament, leaving MPs with limited authority over financial matters.
Even Cabinet Ministers are unaware of the full Budget details before its presentation in Lok Sabha.
2️. Limited Role of Rajya Sabha:
The Upper House of Parliament has no substantial say in budgetary discussions.
Ironically, Finance Ministers from Rajya Sabha cannot vote on their own Budget proposals in the Lok Sabha.
3️. Poor Debate and Scrutiny:
Parliamentary debates on the Budget are often brief and ineffective.
Subject committees do not have the power to amend or significantly alter budgetary allocations.
Global Comparisons: How Other Democracies Function-
United Kingdom – The British Parliament, including the unelected House of Lords, exercises some influence over financial legislation.
United States – The Congressional Budget Office (CBO) provides non-partisan analysis of government spending and policy impacts.
Canada & Australia – Have independent budget offices that enhance legislative scrutiny over fiscal matters.
Proposed Reforms to Strengthen Parliament’s Role-
1️. Institutionalising Pre-Budget Discussions
Parliament should introduce pre-Budget discussions (5-7 days) during the monsoon session to allow MPs to analyze financial trends and set economic priorities.
This would encourage public participation and make Budget-making more transparent.
2️. Creating a Parliamentary Budget Office (PBO)
A PBO can provide data-driven analysis of the Budget, similar to the U.S. CBO.
It would forecast economic trends, assess policy impacts, and offer non-partisan research to parliamentarians.
This would help MPs make informed decisions rather than just approving the executive’s proposals.
The Fiscal Discipline Debate: Executive vs. Legislature-
Concerns: Some argue that greater legislative control over the Budget could lead to populist spending and financial mismanagement.
Counterpoint: Placing unchecked faith in the executive alone is risky. Democracies thrive on checks and balances, ensuring economic justice and accountability.
Why These Reforms Matter?
- Greater transparency in financial decision-making.
- Improved accountability of the executive to Parliament.
- More equitable economic policies benefiting citizens.
- Stronger democratic governance by shifting from a passive approval system to active legislative participation.
Conclusion: Strengthening Parliament’s budgetary role through pre-Budget discussions and a PBO is essential for a more transparent, democratic, and accountable financial system in India.
