To make a government accountable to the people and ensure “good governance”, budget tracking and analysis is very important. In many developed and developing countries, permanent budget analysis groups (BAGs) comprising of economists, financial analysts and civil society members have been formed. Such groups have been engaged in budget tracking and analyzing both pre-budget and post-budget discussion sessions to review macroeconomic performance and management, economic growth and price stability in the economy. Moreover, such BAGs have engaged in reviewing sectoral performance of the government such as in agriculture, industry and the services sectors. In the same way, BAGs have also been engaged in assessing performances in education, health and social security programs. In India, BAGs have been used to evaluate the performance of government-funded target-based programs aiming to uplift women, Dalits, Adibasis and others backward communities.
However, BAGs are lacking in Nepal. After the budget speech of the finance minister during the budget session in legislature, many arbitrary analyses of a handful of economists and financial analysts are usually seen in the print and electronic media. That is it. If BAGs could be formed, which would aid in understanding and pro-actively influencing budget-making process and the political economy behind it, it may open a new path of making our democracy work.
Distributing limited resources efficiently is an important challenge in all the economies. Budget analysts work in private industry, non-profit organizations, and the public sector equally. In private sector, a budget analyst’s main responsibility is to examine the budget and seek new ways to improve efficiency and increase profits. The public interest budget analysts should play a key role to make government more accountable to their commitments to serve the interest of peoples.
To make a government accountable to the people and ensure “good governance”, budget tracking and analysis is very important. In many developed and developing countries, permanent budget analysis groups (BAGs) have been formed.
What is the impact of budget on the common people? The debate on budget can work in favor of the people. The monopoly of budget-making process causes carelessness. BAGs can demystify the methods of making a budget, which will lead to a sense among citizens that “this is our budget and we have a say in it”. The demands could be pressed before, during, and after the budget is debated.
Budget analysis generally holds elected government accountable to the stated policies and the programs of the government, the common minimum program (CMP) of the alliance or election manifestoes of the political parties. The budget analysis has immediate and measurable impact on the lives of the people that starts changing the power relations between the different sections of society and the economy and concretely creates a long-term vision for pro-poor, accountable and transparent governance.
The question remains on how to give budget analysis a political meaning without favoring any political party and whether the promises made by the finance minister are reflected in actual allocation of funds in the budget. BAGs can prepare a note and circulate to all the members of parliament before the debate. The members can use this during their discussion on the budget speech of the finance minister and subsequently during the general discussion on the budget.
RATIONAL BEHIND FORMATION OF BAG
Why and who should do budget analysis is a crucial matter. Firstly the budget division of the ministry of finance must, ideally, invite civil society members and citizen groups to do budget analysis and priority of target setting. But it is hardly done. Sometimes they invite business guilds like Federation of Nepalese Chamber of Commerce and Industry and a handful of economists for pre-budget discussions. However, this is not sufficient.
Secondly, most of the budgeting work within the budget division involves “numbering” and “figuring” and making logistics-related arrangements. Most of the work related to the budget prepared by the elected politicians is fragmented, partisan, and, at times, done for private interest and profits. So, politicians, bureaucrats and technocrats alone should not prepare and analyze the budget.
Thirdly, an exercise such as budget analysis does not make the budget itself, nor gives alternate solutions. However it gives signals for change in budget process. This is the strength of budget analysis. It helps in tracking the policy and priorities of the government that could ensure the accountability in governance.
Fourthly, budget analysis should be considered as public feedback to the government and the opposition party. Such exercise must be free from profit motive and party affiliations.
Fifthly, at present there is a new emphasis on finance, budget, cost effectiveness, and many such activities for liberalizing the economy. Then why should it remain a domain of small groups of economists or financial analysts? Why shouldn’t others get the opportunity to do the same? Those interested in demystifying finance should do budget analysis.
Sixthly, the budget analysis exercise changes the focus from budget provision or allocation to priority and outcome.
Seventhly, the budget analysis can provide a track record on performances of the government. Budget analysis gives voice to citizens, a voice that is clear, reasoned, quantitative, and in the form of an argument. Such a voice is difficult to ignore. Those who want such a voice to be heard should do budget analysis.
Lastly, there is an argument in favor of restricting budget analysis to economic and public finance institutions and university departments. None of the institutions are being taken seriously by the bureaucrats, planners and politicians. Even most of the findings of such institutions are not disseminated.
HOW IT WORKS
The exercise not only helps in understanding the budget, but the apparatus also serves to make the government responsible to the people in concrete terms. Budget analysis helps in many ways. Firstly, it helps to know whether there are discrepancies between the policies and programs of government and the election manifestos of the ruling party or the CMP of the ruling alliance. Secondly, it helps to know whether there are adequate investment in the programs and projects. Thirdly, it helps to know whether the result of the programs and projects would be convergence or divergence in terms of outcome. The exercise is intended to measure not only monetary outcomes but also how serious the government is in its stated intentions to improve the living standard and materialize the promises made in the election. So, BAGs help to make the government and opposition equally more accountable to the citizens in fulfilling the promises made during election campaigns. In short, BAGs can ensure “good governance”.
b.p.bhurtel@gmail.com
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