The Case for a Parliamentary Budget Office in India

The budget session 2017 came to an end on 13 April. It brought in a few reforms, such as advancing the union budget to 1 February instead of 28 February, merging the railway budget into the general budget, merging plan and non-plan allocations, and the passage of key reforms in the Goods and Services Tax Bill. It is notable that the quality and comprehensiveness of the budget scrutiny process, through the debate and the standing committees, is weak. Due to the lack of analytical knowledge support, members of Parliament (MPs) are unable to properly scrutinise the demands for grants in the respective standing committees. On occasion, MPs seek to reach out to external experts for credible analysis and inputs. Such practices help in adding depth to the committees’ work and their reports. While this results in better assessment of demands, it is an ad hoc way of bridging the gap in knowledge and analysis. An institutional mechanism, such as a parliamentary budget office (PBO), is necessary to provide continuous assistance to MPs and their committees.

The above example suggests that, in India, the effectiveness of parliamentary oversight in public finance is an unsettled concern. Strengthening Parliament’s oversight apparatus calls for proper attention and requires a thorough overhaul. Establishing a PBO is a fitting response to this concern. A PBO is an independent and impartial body linked directly to the Parliament.¹ It provides high-quality technical, objective and non-partisan analysis of budgets and public finance to the Parliament and its committees. A PBO is an instrument for addressing bias towards spending and deficits and, more significantly, for enhancing fiscal discipline and promoting accountability. Further, it can generate quality public debate on budget policy and public finance (OECD 2014),² enabling parliamentarians to engage more meaningfully in the budget process.