With opacity being de rigeur when it comes to state budget details, it is no surprise that the citizens remain dissatisfied with the spending heads public money goes down on. It is time that states stopped shrouding their budgets and allowed for greater access to the details for the public, Amitabh Mukhopadhyay, a director general at the comptroller and auditor general (CAG) of India tells Trithesh Nandan in an exclusive interview. Mukhopadhyay also advocated for environment accounting, costing of the common property resource in the government’s fiscal statements.
The union budget is not open* and a survey by the Centre for Budget and Government Accountability (CBGA) says that state budgets are also not transparent in providing information. Gujarat tops the list by providing 60 percent information to the public. Where do you think the problem lies?
From the central government point of view, it is a specific concern that leads to the relative lack of transparency - that it might affect the markets. Money markets, capital markets, the commodity prices - all could be affected because the budget is tied to monetary and fiscal price policy. For the state governments, there is no such issue involved. The state budget could be lot more transparent. They could come out with strategy papers prior to the tabling of the budget by the finance minister. For the union government there is always a need to keep in mind the effect such information is likely to have on markets - specially money markets and responses of the commodity markets, industrialists and tax payers. So, they can not think of transparency alone.
How would an open state budget help citizens?
The budget is a very important statement by a government on two things: First, the tax proposals – what the citizens will have to pay. Second, how the government legitimises collecting the taxes by allocating usage of the money. Both are matters that concern the citizens.
In fact, the main theme is that government is taxing the citizen in order to serve them better with finances collected. So in this area, transparency is certainly very important because people must have an idea of what the government intends to use their money. It will also let them know why they are paying the tax, where will their money go, what do people do with it and how a budget corresponds with people’s every day lives.
There are two issues – one is how much money is being allocated and to what level of efficiency is the money being utilised. The budget actually talks about both the things. That is why there is need to inform citizens about the budget.
So, would you say that the states' are at fault if budget details are not accesible to the citizens?
This is not a question of fault as much as it is of the lack of proactiveness . There hasn't been any demand for budget details from the citizens until recently. But that does not mean that the states should not have shared details out of their own volition. Now that the people have started demanding, the need for such transparency is being appreciated more and more by the governments. It also helps government if people understand why they are being taxed, more in the lines of awareness. It also helps the government explain its borrowings, if there are any, to the citizens.
I think it is more a matter of governmnet departments being transparent with each and also with the people. The state governments don’t have to satisfy the CAG only, they need to be transparent and accountable to the people they govern.
The transparency demand from citizens is something relatively new. This movement had not been as strong earlier. People now want to involved in their governance and one step is to understand the budgets. There is a valid need to aware of one's fiscal rights and duties and redressal system.
As of now, common property resources are not included in our accounting. What could government do to bring transparency in this section?
Essentially common property resources include land, water and its management. Forest resources, cultivable lands, rivers, ponds etc., are all common property resources. A large part of economic well being of the citizen is dependent on the management and regulation of these resources. This management and regulation, however, is not reflected in our budgets.
The accounting that is normally shown pertains to the circulation of money - collected from the citizens by the government, allocated for usage under various heads, and the benefits of this expenditure reaching the citizens. This circulation does not take into account the stock of resources and what the depletion has been from this stock in the normal course of usage by the governmnet and the citizens. Take for instance states like Orissa – it has got mineral resources. It gets lot of income to the state government. But how much mineral is being depleted, natural resources being spent and how much is left, we don’t know.
This could be remedied by environment accounting, costing of the common property resource. These are heads that should also start featuring in the government’s financial report and planning. But it is not happening today.
(*India scored 67 percent on open budget index (OBI), 2010 in a survey of 94 countries regarding transparency of budgets, report released in October 2010)
.jpg "Amitabh Mukhopadhyay, director general (DG) of comptroller & auditor general (CAG)")
