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No one cares about state budgets

This failure to have a robust debate about state budgets is likely to cost the country heavily. State budgets are entering a period of deep instability as fiscal deficits are on the rise.

columns Updated: Apr 02, 2018 16:14 IST
The Union budget has created a mini-industry of commentators (this columnist included) and TV talking heads who routinely scrutinise every detail of the budget days after it is presented. State governments expenditure is significantly larger (and growing) than the Centre’s. It is state’s that are in charge of spending and implementing schemes, which affect our everyday lives. And any meaningful commentary and discussion on budgets must necessarily focus on state budgets. (Sonu Mehta/HT PHOTO)

Our parliamentarians have once again disgraced themselves by unscrupulously passing critical legislation — the appropriations bill and the finance bill — with no debate whatsoever. This disdain for debate is not new. According to PRS Legislative Research data, demand for grants are routinely passed with minimal discussion and, in 2004 and 2013, much like this March, the demand for grants was put to vote with no debate. But this year our MPs hit a new low, passing the finance bill — despite controversial amendments related to political party funding — after an 18-minute-long debate!

This blatant subversion of the parliamentary process has expectedly generated a flurry of outraged commentary, lamenting the crisis facing Parliament and the mockery that is being made of taxpayers’ money. But even as this outrage seeks to hold our parliamentarians accountable, it fails to extend the same accountability to state legislators. The truth is that while our national newspapers and TV screens were filled with outraged commentary against MPs, assemblies were busy passing their budgets with no debate whatsoever — a fact that hasn’t even received passing mention in the media.

The problem is partly structural. Meaningful debate requires that legislators study budget proposals comprehensively. But budget sessions are not designed to allow this. PRS data highlights that budget discussions typically begin within 24 hours of tabling the budget. To illustrate, in 2018, 11 of 16 assemblies began budget discussions the next day. An average state budget is about 1,000 pages and a typical budget discussion lasts between one and six days. Can we expect a serious debate in these circumstances?

The problem is exacerbated by the absence of any systematic process to examine budgetary demands. Like our MPs, state legislators receive no formal research support. But unlike our MPs, who can rely on research by academics, NGOs and think tanks in Delhi, such non-government policy input at the state level is hard to come by.

Moreover, Parliament has a tradition of scrutinising ministry-specific demand for grants in specially-constituted department-specific standing committees. This is one role that MPs take seriously. So even if the full House fails to debate crucial aspects of government spending there is at least some scrutiny of the budget by standing committees. Importantly, these reports are in the public domain. Assemblies do not have a tradition of standing committees linked to specific departments and ministries. Thus there is no mechanism for detailed budget discussions. According to PRS, a handful of states such as Assam and Goa have set up budget committees but these committees are in charge of scrutinising the entire budget before it is passed, leaving little room for careful assessment.

The greatest hurdle to robust legislative debate, however, is the lack of public engagement. The Union budget has created a mini-industry of commentators (this columnist included) and TV talking heads who routinely scrutinise every detail of the budget days after it is presented. But this mini-industry refuses to recognise its own insignificance. It is states that are in charge of spending and implementing schemes, which affect our everyday lives. And any meaningful commentary and discussion on budgets must necessarily focus on state budgets.

Worryingly, even the regional media rarely engage in a robust debate on state budgets. This is partly because state budgets are hard to access. Assemblies are under no pressure to place their budgets in the public domain. Most states are slow to put budget documents online and rarely print enough hard copies to go around.

Researchers at PRS say that some states have started uploading budget documents on tablets given to MLAs, making it impossible for the public to access. In fact, most of their researchers have to ask MLAs for copies of budgets. It’s no surprise then that robust public discussion in the aftermath of the budget is rare. But it is a vicious cycle. The lack of media engagement means that legislators face no pressure, creating a perfect cocktail for opacity and lack of seriousness in budget processes.

This failure to have a robust debate about state budgets is likely to cost the country heavily. State budgets are entering a period of deep instability as fiscal deficits are on the rise. At the same time, a new debate is unfolding on the mechanics of Centre-state fiscal devolution with the southern states raising their voice against the Fifteenth Finance Commission proposal to change the devolution formula. Solutions to these concerns will only be found through robust debate and engagement. It’s time we started putting pressure on our states to take their budget processes seriously.

Yamini Aiyar is president and chief executive, Centre for Policy Research

The views expressed are personal

First Published: Apr 02, 2018 16:14 IST