India’s Marginalised in Parliamentary Budgetary Affairs

Explore Parliamentary Budgetary Affairs, covering the budget-making process, fiscal policies, and the role of Parliament in overseeing government expenditures and financial planning.

Table of Contents

Context: In India, the executive-driven budget process limits parliamentary influence, leaving legislators with minimal opportunity to shape or scrutinize financial policies.

Parliamentary Budgetary Affairs: Process of Budget Preparation

Pre-Budget Consultations
Formulation of Budget Estimates
Approval by the Cabinet
Presentation in Parliament
Parliamentary Scrutiny and Approval: The Budget is discussed in Parliament, followed by:

- General Discussion (No voting, only debate).
- Departmental Scrutiny by Parliamentary Standing Committees.
- Demand for Grants (Detailed discussion and voting).
- Appropriation Bill (Legal authorization for spending).
- Finance Bill (Legislation for tax proposals).

6. Implementation

Also Read: Union Budget 2025

Constitutional Provision That Make Budget Necessary

Article	Description
Article 112	The President is required to present an annual financial statement to both Houses of Parliament, detailing the estimated receipts and expenditures of the Government of India for the financial year.
Article 113	No demand for a grant can be made without the recommendation of the President.
Article 114	Withdrawals from the Consolidated Fund of India (CFI) are not permitted without Parliamentary authorization.
Article 266	All government revenues are to be credited to the Consolidated Fund of India, while other public funds, like provident funds and postal insurance, are to be credited to the Public Account of India.
Article 267	Parliament has the authority to establish a Contingency Fund of India through legislation, intended to address unexpected or unforeseen expenditures.

Check here: Components of Budget

What Are The Components of Budget?

Estimates of revenue and capital receipts;
Ways and means to raise the revenue;
Estimates of expenditure;
Details of the actual receipts and expenditure of the closing financial year and the reasons for any deficit or surplus in that year; and
The economic and financial policy of the coming year, that is, taxation proposals, prospects of revenue, spending programme and introduction of new schemes/projects.
It includes revenue from taxes, fees, and other sources, as well as expenses for government programs, public services, and infrastructure projects.
The budget also usually includes estimates for debt and deficit, which is the difference between the government’s expenses and revenues.

What is a vote-on-account?

Vote on Account is the permission to withdraw money from the Consolidated Fund of India in that period, usually two months.
A “vote-on-account” only deals with the expenditure in the Government’s budget.
Since 2016, the budget session begins on 1st February (earlier, it was the last week of February).
- This has decreased the utility of vote on account, as now the passage of the appropriation bill is very much possible even before the beginning of the next financial year.
Meanwhile, the Vote on Account is still relevant on account of Interim Budgets during the election years.

How is the Budget an Executive – Driven Process?

Executive Monopoly Over Budget Drafting

The Finance Ministry solely drafts the Budget without meaningful involvement from Parliament or even the Cabinet.

Unlike legislative bills, which require thorough cabinet discussions and parliamentary debate, the Budget is prepared behind closed doors, limiting transparency and broader input.

Minimal Debate and Oversight

Parliament’s role in budgetary matters is largely symbolic.

Once the Budget is presented in the Lok Sabha, parliamentarians can discuss it but lack the authority to amend or significantly alter proposals.
The debates are often brief and superficial, reducing legislative oversight to mere approval rather than active shaping of financial policies.

Exclusion of Rajya Sabha

The Rajya Sabha, despite being part of the legislative framework, has no substantive role in Budget discussions.

India permits a Finance Minister to be a Rajya Sabha member, but they lack the ability to vote on their (own) Budget proposals in the Lok Sabha where the Budget is introduced and passed, highlighting the lack of bicameral influence over financial matters.

Absence of Independent Research Support

Indian legislators lack access to an independent, non-partisan body like a Parliamentary Budget Office (PBO) to provide data-driven analysis and expert insights.
This limits their capacity to scrutinize budgetary proposals and offer informed recommendations.

Lack of Pre-Budget Consultations

Unlike some democracies where parliaments engage in pre-budget consultations, India does not have a structured mechanism for legislators to provide input before the Budget is finalized.
This prevents Parliament from influencing the government’s economic and social priorities at the drafting stage.

Weakened Democratic Accountability

The dominance of the executive in budget-making undermines the principle of parliamentary accountability.
Without the power to modify or meaningfully influence financial policies, Parliament’s role in reflecting public priorities and ensuring financial discipline is weakened.

Ways to Strengthen Parliamentary Budget

Introduce Pre-Budget Discussions

Institutionalize pre-budget debates during the monsoon session for 5 to 7 days.

Allow legislators to assess the fiscal health of the nation, outline budgetary priorities, and suggest resource allocation strategies.
Encourage coordination among subject committees to provide informed input and enhance the quality of parliamentary debate.

Establish a Parliamentary Budget Office (PBO)

Create an independent, non-partisan body to provide expert analysis on budgetary matters.

Model it on institutions like the U.S. Congressional Budget Office (CBO) and similar bodies in Canada, Australia, and the UK.
The PBO would:
- Conduct independent economic forecasts.
- Assess the fiscal impact of proposed policies.
- Provide data-driven insights and policy briefs to parliamentarians for informed decision-making.

Enhance the Role of Parliamentary Committees

Strengthen the involvement of departmental standing committees in budget scrutiny.

Ensure that these committees have adequate time and resources to evaluate budget proposals in detail.
Make committee recommendations more binding on the government.

Empower the Rajya Sabha in Budgetary Discussions

Give the Rajya Sabha a greater role in debating and influencing budget proposals, even if voting rights remain restricted.
Ensure that Finance Ministers who are Rajya Sabha members engage more actively with the Lok Sabha on financial matters.

Increase Transparency and Public Engagement

Publish detailed budget documents and economic forecasts to improve transparency.
Encourage public consultations and stakeholder feedback before finalizing the Budget.

Allow Amendment Powers for Parliament

Permit Parliament to suggest and vote on specific changes to budget proposals, rather than simply approving or rejecting them as a whole.
Grant legislators greater authority to influence sectoral allocations and policy priorities.