How to make Budget discussions in Parliament more fruitful

Both ruling and opposition parties need to play constructive and responsible roles

By A Mahendran, S Indrakant
Published: Monday 27 February 2023
For meaningful and fruitful discussions, one has to read the full Budget document, fully assimilate it and look at the document from different angles. Photo: iStock
For meaningful and fruitful discussions, one has to read the full Budget document, fully assimilate it and look at the document from different angles. Photo: iStock For meaningful and fruitful discussions, one has to read the full Budget document, fully assimilate it and look at the document from different angles. Photo: iStock

Discussions during the Budget sessions of the Parliament produce more heat than light, which turns into a performance of annual ceremonies.

All the participants take the expected stands. The members of the opposition parties start protesting even before the completion of Budget presentations by the finance minister, while the members of the ruling party start praising it.

Even academicians, research analysts and journalists are not an exception to this rule. For meaningful and fruitful discussions, one has to read the full Budget document, fully assimilate it and look at the document from different angles.

Read more: No, economic recovery has not brought about a drop in MGNREGA job demand: Experts

Sometimes, it calls for a small empirical exercise and to look at the past trend. As the dust generated by the discussion settles down, it is time to consider making the discussion on Budget more fruitful and valuable. All the parties concerned should have a constructive and responsible role in this endeavour.

The opposition parties have a one-point agenda: To criticise the government proposal without considering its merit. They fear that if they accept the proposal, all the credit will likely be claimed by the ruling party.

Is it impossible to have a consensus among the parties on proposals of national importance? In this regard, the ruling party has to take the opposition parties into confidence.

If direct taxes are raised, then it is customary for the opposition parties to blame the ruling party on the ground that such a move will adversely affect the production incentives.

On the other hand, if the finance minister attempts to raise the receipts through indirect taxes, then the opposition parties allege such an action will widen the existing income and wealth inequalities.

The opposition would be doing a great service to the nation if they spelt out how much revenue should be raised through direct taxes and how much through indirect taxes.

Similarly, on the expenditure side, opposition parties demand the allocation to particular programmes must be enhanced. For instance, in response to the reduction in allocation to Mahatma Gandhi National Rural Employment Guarantee Scheme, they came down heavily on the ruling party, alleging it hurt the poor.

Before commenting, the opposition parties must find out whether the Budget allocated during the last year was fully spent and the reasons for the same. If the allotted amount remains unspent, then there is no meaning in enhancing the outlay on such schemes.

It is strange that a few years back, opposition parties alleged the targeted group were not getting stipulated days of work and wage rate and to do away with such schemes. When the government started initiating measures in that direction, the opposition parties demanded the scheme must be continued.

Whenever opposition parties want to enhance outlay on a particular scheme, they must spell out schemes on which allocation must be reduced. In short, the opposition has to come out with an alternative Budget.

Read more: MGNREGA: Workers across 13 states protest to demand unpaid wages

They cannot shirk their responsibility by giving the excuse of insufficient time. They have one full year to prepare their Alternative Budget.

At the same time, the finance minister has a more important role. A Budget presentation does not imply merely rolling out figures many cannot comprehend. It is better to provide rationality behind the changes in the figures compared to the previous year.

Further, the finance minister has to review the difference between the budgeted and the actual figures of the last financial year, whose accounts are available.

It would be a welcome step if the minister elicited the views of the opposition parties on the type of Budget they would like to have by conducting an all-party meeting before finalising the Budget.

Research analysts and experts on fiscal policy have a crucial role in enlightening the public and guiding the government to move forward on nation-building paths. They have to thoroughly study Budget documents, which is time-consuming work.

They should not be in a hurry to deliver their judgement on the Budget. The general public must be given the Budget's essence in simple language.

They should cover aspects like the expected growth rate of the economy, expected inflation rate, items whose prices are likely to increase and the items whose prices are likely to decrease and their impact on different economic classes. These conclusions must be based on solid empirical and rigorous work.

Experts have to analyse both revenue and capital accounts. In the past, there used to be a surplus in the revenue account and a deficit in the capital one. A part of the deficit in the capital account used to be covered by the surplus in the revenue account.

However, in the recent past, due to various welfare schemes, there has been a deficit both in revenue and capital accounts.

Many times with the passage of time, welfare schemes call for modification to make them more effective. For instance, there is a broad agreement that MGNREGS is a labour-friendly scheme, but the cultivators are unhappy on account of the hike in labour cost.

It is worth making the scheme both labour-friendly and cultivator-friendly. Suggestions like suspending MGNREGS works during harvesting season and a part of the hike in wage cost to be borne by the government have been made by the experts who need serious consideration.

Read more: Budget 2023-24: Here are the budgetary allocation trends for key ministries

The experts have to look into the reliability of the budget exercise based on past data. Further, they have to examine capital expenditure's short-run and long-run implications. Initially, capital expenditure enhances debt burden, but over time, they are expected to create assets.

This is likely to generate adequate income to pay back the debt and, at the same time, to improve the living conditions of the people. So the experts on fiscal policy should closely watch the magnitude of the primary deficit and the ratio of primary deficit to gross domestic product (GDP).

In short, the discussion on Budget will be fruitful and useful when all the parties concerned play constructive and responsible roles.

Views expressed are the authors’ own and don’t necessarily reflect those of Down To Earth

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