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When a country’s budget process is open, public money is better used on public needs, which in turn builds trust among the people in fiscal governance and public sector delivery of services. Investing in open budgets is a winning proposition; the governments can move closer to it by providing disaggregated fiscal information in a timely manner and ensuring a fair degree of budget transparency at all stages of the budget cycle. Other parameters for making improvements in accountable and inclusive government budgeting are availability of spaces for public engagement in budget decision-making, and effective role played by the independent oversight institutions in the country.

The Open Budget Survey (OBS), a biennial survey conducted by the International Budget Partnership (IBP), assesses for more than 100 countries – public access to government budget information, formal opportunities for the public to participate in the national budget process, and the role of budget oversight institutions such as the legislature and the supreme audit institution of the country. The OBS 2021, which is the 8th edition of the biennial survey, presents such assessment for the national level budgets of 120 countries. It should be noted, however, that the reference period in the OBS 2021 to assess the timing of publication of most of the documents corresponds to the period April 2019 to December 2020 in case of India.

Transparency: The OBS measures public access to information on how the national government raises and spends public resources, by looking at online availability, timeliness and comprehensiveness of ‘eight key budget documents’ that are ‘globally comparable’, using 109 equally-weighted indicators or questions. It has given India a transparency score of 37, against the global average of 45 out of 100.

India’s score shows a decline compared to the previous rounds of the OBS due to the fact that the ‘Year-End Report’ for financial year 2018-19 and the ‘Audit Report’ for 2018-19 were not published in a timely manner. The reference periods for publication of these documents overlapped with the period of onset of COVID-19 pandemic in the country, which had caused disruptions across sectors. This decline in the score seems to be temporary, and mainly due to a specific time reference in the survey, since the ‘Year End Report’ and the ‘Audit Report’ have again been published (by the Government of India) in a timely manner for the subsequent financial years. For instance, the ‘Year-End Report’ for FY 2020-21 was published within nine months of the completion of the financial year (i.e. within December 2021), as had been the usual practice during the pre-pandemic years. Also, the ‘Mid-Year Review’ report on the implementation of the budget, which is considered relevant as per the ‘global standards’ and hence included in the OBS methodology, was discontinued for the national budget of India a few years ago; this too has led to a relatively lower transparency score for India in last few rounds of the global survey. The ‘Mid-Year Review’ publication was discontinued by the Finance Ministry after the introduction of the Monthly Economic Review Reports. However, the OBS methodology does not recognise the Monthly Economic Review Reports for India as a substitute for the ‘Mid-Year Review’ document.

There are a number of fiscal transparency initiatives in India, which are opening up budgets by providing relevant fiscal information in the public domain; these need to be acknowledged and strengthened further. These relate to adoption of the National Data Sharing and Accessibility Policy (NDSAP), triangulation of fiscal information through the Public Financial Management System or PFMS at the national level and the IFMS at the State level, and the publication of a number of Special Budget Statements supplementing the main budget documents – such as, the Gender Budget Statement, the Child Budget Statement, the Statement on allocations for welfare of Scheduled Castes, the Statement on allocations for welfare of Scheduled Tribes, and the Output - Outcome Budget Statement. While the adoption of the NDSAP is enhancing public availability of digitized fiscal information, the Special Budget Statements are providing fiscal information relevant from the perspective of social equity. However, these practices have not been considered in the OBS scoring methodology, given the survey’s emphasis on assessing only ‘globally comparable documents and practices’.

To improve its budget transparency score, the OBS 2021 has recommended that India should sustain the practice of publishing the ‘Year-End Report’ and the ‘Audit Report’ in a timely manner, which it used do in the pre-pandemic years and has restored in the most recent years.

Public participation: To assess the formal opportunities offered to the public for meaningful participation in the different stages of the budget process, the OBS examines the practices of the Union Government’s executive, the legislature, and the supreme audit institution. India got a score of 9, against the global average of 14 (out of 100).

It appears that the pre-budget consultations organised by the Union Finance Ministry with various groups of stakeholders were affected by the onset of the pandemic. As per the OBS recommendations, the Finance Ministry’s pre-budget consultations at the budget formulation stage need to strengthen public participation by prioritizing the following actions: expanding the mechanisms to engage civil society organizations or members of the public who wish to participate, actively engaging with vulnerable and under-represented communities, and, most importantly, publishing a summary report on the pre-budget consultations to inform the public about the recommendations that were factored in the budget for the ensuing year.

Oversight function by the office of the Comptroller and Auditor General: On this aspect, the OBS examines the oversight role played by legislatures and supreme audit institutions (SAIs) in the budget process based on 18 equally-weighted indicators or questions. The OBS found that the legislature and SAI in India together provide ‘adequate oversight during the budget process’, with a composite score of 61 (out of 100). India’s better performance on this metric is based on a higher level of oversight score for the office of C&AG of India (67 out of 100); the score for legislative oversight in India is 58 out of 100.

The OBS 2021 has recommended that the office of C&AG of India should prioritize establishing formal mechanisms for the public to assist in identifying the audit priorities and to contribute towards relevant audit investigations.

The OBS 2021, despite the limitations in its methodology (which are mainly because of its emphasis on globally comparable documents and practices), points to a number of areas of improvements in budget transparency that could be pursued at the national level in India. However, budget transparency in the Indian context, requires a much greater focus on the practices at the State, district and sub-district levels. Substantive improvements in budget transparency in India will require significant advances in public availability of locally relevant fiscal information at the district and sub-district levels across States.

 

Authors work with Centre for Budget and Governance Accountability; they can be contacted at

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