By Phrangsngi Pyrtuh
The Meghalaya legislative assembly has just passed the budget for the financial year 2017-18. This is the last budget for the incumbent Congress led MUA government before the polls of 2018. The deficit budget (around Rs. 1235 cr) was passed without populist measures considering that elections are around the corner. The Government has done much populism in its five year innings that the need to have a populist budget on the eve of elections is not required.
The highlight of the 2017-18 Budget is the merging of plan and non-plan expenditure. The increasing deficit is not surprising if we take into account the shortfall in revenue generation of the Government due to the coal ban and the amendment of the Meghalaya Exercise rules, the liability to power companies etc all adds up to the deficit in the budget.
The decision of the Government to merge the plan and non plan expenditure is a prudent move. Following the initiative of the UPA government to introduce an outcome based budgeting in 2005-06 the distinction between plan and non plan expenditure has become unnecessary.
The budget session is the most important function of representative governments in India. The will of the government is reflected in the budget. The responsibility of the party in power to execute its election promises is carried out through the annual budget. Its impact is felt across the society. Budget sessions occupy primary importance on newspapers, TV news, panel discussion etc. The budget is a report card on the health of the state.
The engagement of all parties and stakeholders on various aspects of budgetary outlays is crucial to streamline/generalize the technical aspects of the budget especially for the common man who is usually least bothered. Sadly budget presentation and discussion is deemed to be an intellectual exercise with agendas that are exclusive to the political class, bureaucrats and the intellectuals. There is a need to examine the lack of interest by the common man during budget discussion.
Budget discussion should percolate to the grassroots so that the common man can hold the Government responsible. Only few people are concerned with the budget. These are the traders, businessmen, contractors etc. The majority such as teachers, farmers etc are least bothered about budgetary discussion. This is attributed to the fact that agriculture, health, education sector were never given priority in the budget in terms of budgetary allocation. India for instance has one of the lowest budgetary spending on education. With growing privatization we can expect even lower allocation to the education sector in the years to come therefore alienating an important group of people from taking further interest in the happenings of the budget.
A poor state like Meghalaya can ill afford such callousness since we have precious little (resources) and we must ensure that it is optimally utilized. My understanding why we don’t take budget discussions seriously is that we don’t have faith in the Government. Corruption, nepotism, favouritism etc have eroded people’s trust in the system of democratic government. Whether it is the national parties or local parties, people’s interest has waned. Most people have given up on the power of voting to bring changes in the system. The budget is supposed to be medium for change.
Conventional budget exercise has become perfunctory. Once the allocated amount is disbursed and projects completed a report card is made to highlight the success or completion of work. But is this what the budget is all about? To make allocations for disbursal without accountability or transparency in how those allocations are made and/or utilised?
The problem with annual budgetary exercise is the difficultly in plugging loopholes and fixing responsibility for bad planning or non feasibility of projects etc. Allocations for projects are lobbied by politicians to cater to their constituency. It does not matter if those projects benefit the public at large. However if the money is drawn from the budget then it becomes a public issue if the project is unviable or has no economic or social rationale.
For instance the construction of an over-bridge enhances the infrastructural facility but whether the bridge is desired or necessary is not part of the budgetary exercise. Public toilets, bus stop, parking lots, health centers etc are constructed but nobody uses them. Is this not a waste of public money? These are just some examples that Shillong and Meghalaya is very familiar with.
The budget needs to become inclusive and participative. But is this possible? The Outcome based budgeting is an alternative budget that may revive people’s interest in the budgeting processes. Outcome budget basically links budget outlays to specific outputs and outcomes. If for instance an over bridge is constructed, the outcome budget can specify the benefit that accrues from the bridge and how many people are using it daily and if it helps with traffic congestion etc. If no one uses the bridge then there must be a fault somewhere which the outcome based budget could specify. Similar is the case with public toilets, parking lots, bus stop, health centers etc. The outcome budget delegates power to the people to hold the government accountable. It can also facilitate the assessment on the performance of officials, public servants, contractors etc.
A limited form of outcome budget was first introduced in India in 2005-06 during the UPA government. Delhi Government under the Aam Admi Party (AAP) passed the Outcome Budget 2017-18 making Delhi the first state to execute a comprehensive outcome based budget. The Outcome budget of the Delhi government pushed the bar on transparency and accountability of public spending by quantifying outputs and outcomes, citizen’s feedback to assess the outcomes of important programmes and quarterly monitoring to track performance based on a list of indicators. The Delhi Government has already completed two years of Zero-Tax budget.
Meghalaya is a resource poor state and requires continuous support from the central and other agencies in the implementation of projects and programmes. With limited resources, the state can ill afford to waste resources on projects etc due to faulty planning, cost overruns, political lobbying etc with no accountability at all. The state needs a budget that links public spending to outcomes, fix responsibility and track the performance both tangible and intangible. Most importantly the outcome budget may enhance people’s interest in the budgetary exercise of the government. The budgetary exercise is not the domain of only legislators. Our hope is that a similar outcome based budget is adopted in Meghalaya. It will be a game changer. Are the political parties of Meghalaya ready for this?