The Indian Parliament plays a crucial role in the budget-making process, which is a vital part of the country’s governance and fiscal management.
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The budget determines how public funds will be raised and spent by the government, and it has significant implications for national economic growth, development, and the welfare of the citizens. Here is an explanation of the role of the Indian Parliament in this process:
1. Presentation of the Budget
- The Union Budget is presented by the Finance Minister in the Parliament, usually on the 1st of February each year. The budget is introduced in two parts:
- Part A: This consists of the Budget Speech by the Finance Minister, which outlines the government’s economic vision, policy priorities, and key fiscal measures.
- Part B: This consists of the Annual Financial Statement, which includes detailed documents like the Revenue and Expenditure Estimates for the upcoming year.
- The budget is presented in the Lok Sabha (House of the People), which is the lower house of Parliament, as the primary representative body of the people.
2. Role of Parliament in Budget Scrutiny
- Debates and Discussions: After the presentation, the Lok Sabha and Rajya Sabha (Council of States) engage in extensive debates on various aspects of the budget, including revenue generation, expenditure allocation, and policy priorities. Members of Parliament (MPs) express their opinions, raise concerns, and provide suggestions on the proposed budget.
- Appropriations and Expenditure Approval: Parliament must approve the government’s proposed expenditure and allocations before they can be legally utilized. No expenditure can be made without parliamentary approval, as per Article 114 of the Indian Constitution.
- Committees Involved in Scrutiny:
- The Public Accounts Committee (PAC): The PAC is responsible for auditing government spending and ensuring that public funds are used effectively and as per parliamentary guidelines.
- The Estimates Committee: This committee reviews the expenditure proposals and ensures that funds are being allocated according to the government’s priorities and the country’s development needs.
- The Committee on Financial Affairs: This committee scrutinizes various financial proposals and the general economic management by the government.
3. Approval of Budget and Money Bills
- Money Bill: The budget is considered a Money Bill under Article 110 of the Constitution. As per the Constitution, a Money Bill can only be introduced in the Lok Sabha, and the Rajya Sabha can only make suggestions within a 14-day period. If the Rajya Sabha does not agree within this time, the bill is considered passed by the Parliament.
- Voting on Demands for Grants: The budget process includes the presentation of the Demands for Grants, which is a detailed request from each ministry for funds. Parliament debates and votes on these demands. If there are disagreements, cut motions can be introduced to reduce the allocation for specific items. However, the government has the final say on these motions.
4. Role of the Rajya Sabha (Council of States)
- While the Rajya Sabha cannot amend or reject the budget directly, it plays an essential role in the scrutiny of the budget.
- Review and Discussion: Rajya Sabha members debate the budget’s provisions, especially those affecting states and regional interests, such as allocations for state welfare, infrastructure projects, and central-state financial relations.
- Recommendations: The Rajya Sabha can propose amendments to the budget, but these are not binding. However, the Lok Sabha considers these suggestions during further discussions.
5. Role of Parliament in Taxation and Revenue Generation
- Parliament’s role in approving the taxation proposals is crucial to the budget process. The Finance Bill, which outlines changes to the taxation structure, is introduced alongside the budget and needs to be passed by Parliament.
- Parliament has the authority to approve or modify taxation policies, such as tax rates, exemptions, and levies, which can significantly impact the country’s revenue generation.
6. Post-Budget Review
- After the budget has been passed, Parliament continues to play an important role in monitoring the implementation of the budget. The Finance Ministry provides updates on budget execution and reviews progress on the expected revenue collection and expenditure.
- Parliament ensures that the budget’s promises are being translated into action by scrutinizing the government’s progress on various fronts, such as development goals, public welfare, and infrastructure projects.
7. Re-appropriations and Supplementary Budgets
- Sometimes, after the presentation of the annual budget, the government may realize the need for additional funds for various reasons such as natural disasters, economic shocks, or unforeseen requirements. In such cases, a supplementary budget is presented, and Parliament has to approve this additional expenditure.
- Re-appropriations may also occur when funds allocated to one sector are transferred to another, requiring parliamentary approval.
8. Gender Sensitivity in Budget Discussions
- Over the years, Parliament has increasingly focused on gender-sensitive budgeting, where gender-based issues and the allocation of resources for women’s empowerment are given due attention. Gender-responsive discussions and debates on the budget have gained prominence in recent years, especially after civil society advocacy for gender budgeting.
- Various parliamentary committees have focused on ensuring that the budget takes into account the economic and social needs of women, children, and marginalized groups.
9. Public Participation
- Parliament plays an indirect role in ensuring public participation in the budget-making process through the Standing Committee on Finance and other committees. These committees often invite public inputs, expert opinions, and suggestions from various stakeholders, including civil society organizations, academia, and industry representatives.
- MPs can also raise the concerns of their constituencies during budget debates, ensuring that the budget reflects the needs of the public.
Conclusion
The Indian Parliament plays an indispensable role in shaping the Union Budget, from scrutinizing and debating the budget to approving expenditure and taxation proposals. The process ensures that the government’s financial plan is transparent, accountable, and in line with the public’s interests. Parliament’s involvement in debates, approvals, scrutiny, and monitoring ensures that the budget is not just a technical financial document but a reflection of the country’s development priorities and fiscal goals.