Scrutiny gap in state Budget proceedings

With states increasingly spending more funds, a robust examination in the legislature for such expenditure is imperative

Legislatures in India are mandated to scrutinise Budget that affects every citizen. While the focus has been on poor performance of Parliament in the recently concluded Budget session, it is equally important to take a look at state legislatures and their budgetary process. Both the Union government and states generate revenue through their respective taxation powers. States also receive grants from the Centre for implementation of central schemes, apart from devolved central taxes. They are responsible for expenditure on subjects such as health, education, law and order among several others.

Over the last decade, the spending by states has steadily increased. This has been primarily due to increased devolution of central taxes. In 2016, the state legislatures together approved expenditure of over Rs 28 trillion, that is 29 per cent more than the Union Budget.

There is very little accountability before the budgets are cleared in state legislatures. In comparison, Parliament has a mechanism to ensure there is adequate scrutiny of the Union Budget through a Department Related Standing Committee (DRSC). There are several challenges in this regard.

Sittings of state Assembly

Most state legislatures sit for an average of 29 days a year, as compared to 67 days in Parliament. Although the Budget session comprises the highest proportion of sittings for states, these are significantly lower than in Parliament. Even larger states such as Uttar Pradesh, Assam and Andhra Pradesh sit for less than half the Parliament’s average of 30 Budget sittings. A commission which reviewed the working of the Constitution in 2000 suggested that state Assemblies should meet for at least 90 days.

General discussion on Budget

After presentation of a Budget, the house takes up general discussion on the Budget. Budget books are complex and run into several volumes. This means that legislators require adequate time to study these before it is taken up for discussion. In Parliament, barring instances of an interim Budget, there has been at least a five-day gap between the presentation of Budget and the general discussion. However, several state legislatures have frequently taken up the general discussion on the Budget immediately a day after its presentation. There have been such instances of immediate discussion in states like Jammu and Kashmir, Assam, Chhattisgarh, Madhya Pradesh and Delhi, among others. Some states like Kerala and Maharashtra, present their Budgets on a Friday that allows a weekend before the house takes up general discussion from Monday.

Absence of committee system to analyse Budget

Another area, where practices in states differ significantly from Parliament, is the analysis of allocations for individual ministries and departments. After the Budget presentation, a report on expenditure of each ministry is tabled on the floor of the house. These allocations indicate the priorities, performance of each ministry in a financial year and expenditure for previous two years. Subsequent to the general discussion, Parliament goes for a recess. During this time, these ministries are analysed by the respective standing committees. Deliberation by committees allows for better scrutiny of the expenses and the policies executed by the ministries. After the Budget session resumes, the committee reports are tabled in Parliament and working of some key ministries are discussed. Findings of the committees contribute to the discussion in the house. For example, the Committee on Human Resource Development made several observations about the performance of Sarva Shiksha Abhiyan, the Committee on Health highlighted the growing challenges in effective implementation of the Central Government Health Insurance Scheme and the Rashtriya Swasthya Bima Yojna.

This practice of committee scrutiny is absent in most state legislatures. As discussed above, both education and health, as state subjects, should have been scrutinised by committees in the state legislatures as well. Even in states such Maharashtra, Uttar Pradesh and others, the demand for grants are cleared after a discussion without any scrutiny by a committee. Odisha and Kerala, though, are among the few states where Budget allocations for ministries are analysed by the legislature committees. It must be noted that the rules in these states provide for a subject or a standing committee on similar lines as Parliament. As a result, after the general discussion of Budget, the ministry allocations are directly taken up for discussion and approved by the legislatures. In fact, in Nagaland, the expenses of these ministries have been cleared without discussion for the last three years. The duration is negligible in states such as Haryana and Delhi, whereas states like Kerala and Mizoram have discussed the demand for grants for over 40 and 25 hours respectively on an average in the last five years between 2013 and 2017. During the same duration, the Lok Sabha has spent an average of 17 hours on discussing these demands.

With states increasingly spending funds more than the Centre, it is imperative that such expenditure goes through a robust examination in the legislature. While framework and rules already exist which provide for close evaluation of the Budget, it is time that these procedures are followed.

The author is a programme officer at PRS Legislative Research and handles engagement with state legislators