Answer

Budget-making is a crucial constitutional process where the Union Budget, as per Article 112 of the Indian Constitution, outlines the government’s annual financial plan. The Indian Parliament scrutinizes and approves the Union Budget, shaping economic policies. However, its role has diminished due to executive dominance, limited debate time, and swift budget approvals. Pre-Budget discussions and a Parliamentary Budget Office (PBO) can enhance oversight, ensure transparency, and improve accountability in financial policymaking.

Role of the Indian Parliament in the Current Budget-Making Process

• Legislative Approval: Parliament approves the Annual Financial Statement, ensuring constitutional compliance and fiscal accountability.
  For example: The Appropriation Bill and Finance Bill are passed annually, allocating funds to various government departments.
• Debate and Discussion: Budget sessions provide a platform for MPs to scrutinize allocations and policy priorities.
  For example: Lok Sabha debates on fiscal policies influence expenditure patterns, though changes remain limited.
• Committee Oversight: Standing Committees examine departmental allocations, suggesting improvements in resource utilization.
  For example: Public Accounts Committee audits government spending, ensuring transparency.
• Control through Cut Motions: MPs can move cut motions to object to specific budgetary allocations, but these rarely succeed.
  For example: Few cut motions have ever led to expenditure reduction, reflecting executive dominance.
• Approval of Supplementary Grants: Parliament approves additional funding through supplementary and excess demands, enabling mid-year fiscal corrections.
  For example: Post-pandemic relief packages were sanctioned through supplementary grants for health and welfare schemes.

Limitations in the Budget-Making Process

• Executive Dominance: The Finance Ministry unilaterally prepares the Budget, limiting legislative input.
  For example: MPs receive Budget documents on the day of presentation, leaving no scope for pre-legislative scrutiny.
• Limited Amendment Power: MPs cannot alter taxation or expenditure proposals, reducing their influence.
• Weak Role of Rajya Sabha: The Upper House lacks voting rights on financial matters.
  For example: Even Finance Ministers from Rajya Sabha (e.g., Nirmala Sitharaman) cannot vote on their own proposals.
• Time Constraints: The Budget is debated for a short duration, limiting detailed examination.
  For example: Parliament clears multiple demands for grants without discussion, weakening oversight.
• Lack of Independent Analysis: MPs lack access to non-partisan budgetary research, hampering informed decision-making.
  For example: India lacks a Parliamentary Budget Office (PBO) like the U.S. Congressional Budget Office.

Effectiveness in shaping economic policies

Strengthening Parliament’s role in Budget-making is key to fiscal accountability and inclusive growth. Pre-Budget discussions can ensure broader stakeholder consultation, while a Parliamentary Budget Office (PBO) will provide independent analysis, improving scrutiny. Institutionalizing these reforms will transform Parliament into a proactive economic policymaker, promoting transparency, efficiency, and long-term fiscal sustainability.

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