The Importance of Parliamentary Engagement in Budgeting

The budget is not just a financial statement but reflects a nation's priorities and economic vision. Across democracies, parliament exercises the power of the purse, crucial for shaping national budgets, ensuring fiscal discipline, and promoting transparency. However, in India, parliamentary influence over the budget is minimal.

Current Scenario in India

• The process is executive-driven, sidelining legislators and giving them little opportunity to shape or scrutinize financial policies effectively.
• Parliament must transition from merely approving government financial proposals to actively shaping economic policy, requiring institutional reforms.

Global Perspective

• Globally, legislative influence over budgets varies; some parliaments actively draft and modify budget proposals, while others act as rubber stamps.
• Budget transparency and parliamentary engagement usually correlate with better social outcomes and economic stability.

Challenges in India

• The Finance Ministry crafts the budget, often keeping Cabinet Ministers uninformed until its presentation in the Lok Sabha.
• The Rajya Sabha lacks a substantive role in budget discussions, and parliamentarians do not have the power to amend or significantly influence budget proposals.

Proposed Reforms

• Pre-Budget Discussions: Institutionalize pre-Budget discussions during the monsoon session for meaningful engagement.
• Parliamentary Budget Office (PBO): Establish a PBO to provide independent, non-partisan budget analysis and support informed decision-making.

Benefits of Reforms

• Pre-Budget debates democratize the budget-making process, encouraging public involvement and fostering transparency and trust.
• A PBO would enhance Parliament’s capacity to hold the government accountable and promote evidence-based policy discussions.

By integrating these reforms, Parliament can transition from a passive recipient of financial proposals to an active budget-influencing institution, leading to more equitable economic policies and greater transparency.