Marginalized Indian Parliament in budgetary matters

The Budget as a Democracy Pillar
• Budgeting is a democratic exercise that allocates public resources and defines the government’s social and economic priorities.
• Legislative scrutiny has been essential in preventing executive overreach.
• The degree of legislative influence over budgets varies globally, with some parliaments actively drafting and modifying budget proposals, while others act as rubber stamps.
• Budget transparency and parliamentary engagement correlate with better social outcomes and economic stability.

Parliament’s Role in Budget Formulation and Scrutiny in India
• Parliament’s role in Budget formulation and scrutiny is mainly ceremonial.
• The Finance Ministry single-handedly crafts the Budget, keeping even Cabinet Ministers uninformed until its presentation in the Lok Sabha.
• The Rajya Sabha has no substantive role in Budget discussions.
• The decline of parliamentary authority over budgetary matters is evident in the poor quality and brevity of debates and the ineffective scrutiny by subject committees.

Pre-Budget Discussions and Parliamentary Budget Office (PBO)
• Two key reforms must be implemented for Parliament to reclaim its rightful role in Budget-making: introducing pre-budget discussions and creating a PBO.
• Pre-Budget discussions would allow legislators to assess the nation’s fiscal health, outline Budget priorities, and present a broad economic framework for the government’s consideration.
• A balanced approach, where the executive retains financial discretion but remains answerable to Parliament, is the hallmark of a healthy democracy.
• Establishing a Parliamentary Budget Office (PBO) would bridge the gap by providing legislators with independent and non-partisan Budget analysis.
• The PBO would offer policy briefs to parliamentarians, enhancing informed decision-making.

Reclaiming parliamentary authority
• The current budgetary process diminishes the role of elected representatives, undermining democratic accountability.
• By integrating pre-Budget discussions and establishing a PBO, Parliament can transition from being a passive recipient of financial proposals to an active budget-influencing institution.