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The government of India has recently taken steps to open up the Union budget to more participatory practices. In a welcome move, India’s finance ministry has announced that this year’s pre-budget consultations will be held far earlier than in previous years. The consultations, a series of hearings which draw on the expertise and knowledge of those outside government to shape the priorities of the forthcoming budget, have traditionally kicked off in January – not long before the budget is tabled in parliament in February. This year, however, the 2016/17 Union budget will benefit from a full five months of engagement prior to tabling. This allows far more space for the finance ministry to take evidence and advice from experts and civil society activists into account when formulating the draft budget.
Pre-budget hearings, which are a long-established practice in India, are particularly important in the Indian context where significant changes to the draft budget are rarely made once it is introduced in parliament. While the government has traditionally consulted with business people, trade unionists, independent economists, and relevant academics during the formulation of the budget, in 2010 it extended hearings to include civil society and grassroots activists working on social sector issues.
But arguably in prior years the hearings have come too late for this engagement to have a serious impact on the decisions that are ultimately made about what revenue and spending policies will comprise the budget.
A win for the People’s Budget Initiative
The change is welcome news for civil society organizations (CSOs) doing budget work, which have long called for the period for hearings to begin earlier. The People’s Budget Initiative, a network of over 400 CSOs from across 22 states in India, whose secretariat is housed by the Centre for Budget and Governance Accountability (CBGA), has been at the forefront of such calls. In 2013 PBI released a statement urging the government to “hold the pre-budget consultations in the month of October and also give space in these to civil society organizations focusing on government policies and budgets for disadvantaged sections of population.”
Last year CBGA and IBP co-wrote an article in one of India’s most influential journals, the Economic and Political Weekly, on the need to strengthen and deepen pre-budget processes. Echoing PBI’s calls, the article explicitly called for pre-budget hearings to take place in October.
It is encouraging to see that, finally, the government is heeding such advice.
Coordinating Civil Society
The new space for consultation has the potential to significantly expand the influence CSOs have on the Union budget, and Indian civil society is well placed to respond. For years PBI, with the support of CBGA and IBP, has been doing crucial work to establish mechanisms for CSOs across India to engage with the budget. It has created consultative platforms in major regional cities, such as Ahmedabad, Bhopal, Chennai, Delhi, Guwahati, Hyderabad, Lucknow, Pune, and Ranchi, for CSOs and grassroots activists to discuss the forthcoming Union budget. PBI then draws on these discussions to articulate a series of policy recommendations for the upcoming budget that capture the knowledge and experience of frontline activists and advocates.
Such coordinating infrastructure is crucial for addressing a lack of attention to the needs of poor and marginalized communities in India’s budget. The power of PBI has been the ability of the network to draw on the concerns, experiences, and perspectives of thousands of activists working at the community level and aggregate such collective knowledge into clear policy advice. Until now, however, the finance ministry had very little time to consider this policy advice and draw on it to shape the proposed budget.
Next Steps
Extending the time for pre-budget consultations is an important and welcome move, but further reforms are needed if the government is to take full advantage of active civil society engagement.
The hearings could be much more effective if senior representatives from all social sector ministries were also substantively involved in this process. As many CSOs work on service delivery issues, their suggestions and expectations are highly relevant to the sectors that touch people’s lives in the most direct ways, such as health and education. Allowing their inputs to be shared and discussed by the ministries tasked with developing the budget proposals for different sectors could prove highly effective.
Still, this is a step in the right direction, and we look forward to engaging with the 2016/17 budget-making process in the coming months.