EDITORIAL
Union Budget — Misplaced Priorities, Displayed Outcomes!
Prasoon S. Majumdar New Delhi 4/1/2011 6:52:52 AM
Dear Readers
In today’s world if any company fails to generate value for its shareholders, it is being mercilessly stripped down in the brouses, then why is it that when a government year after year creates negligible value for its stakeholders (tax paying citizens) should be allowed to get away? The fact is that, if one has to draw a simile then there is no difference between the Union Budget and AGMs of listed corporations. If on one hand the Chairman of the listed company discusses the balance sheet of the company in front of its shareholders then on the other hand the Finance Minister reads out the balance sheet of the nation, in front of the representatives elected by the stakeholders of the nation. So if on one hand the Chairman of the company announces the achievements of the previous year and the plans for the future, similarly the Finance Minister does the same. But then this is where the similarity ends and the reality begins.
When it comes to listed companies, corporate governance is mandatory. A listed company needs to follow disclosure norms laid down by SEBI to ensure that they are accountable and responsible for every action that they take. This is only to ensure that the shareholders’ interest is safeguarded in such a way that they aren’t left in the dark and no one messes with their investments. More so, a shareholder has every right to question and recommend during an AGM and in the worse case, if he does not see value in staying invested, he has the right to walk out with his money (by selling his shares). Now, consider the case of India’s stakeholders. In spite of making contributions through taxes (both direct and indirect) to the Indian Government, he has to depend upon his elected representative, who in most cases are found to be yawning during the budget sessions. The fact is our Union Budget is more like an one sided affair with least or no intervention from the citizens, for whom and by whom comes the existence of the budget. If one goes by the reports published by International Budget Partnership (IBP), apprehensions would be iota-free regarding how key budget documents like the pre-budget statement, year-end report and annual audit are either missing or are in sub-standard condition — which is one prerequisite when it comes to transparent and accountable budget.
In most of the Nordic and Scandinavian countries, where budget transparency is high and is more effective rather shall I say is more corporatized, the citizen participation is so high that budget document are not framed until public passes the pre-budget statement. In South Africa, the pre-budget statement is coupled with the Mid-Year Review. Similar procedure is followed by Brazil, Kenya and other nations. Talking about audits, in India citizens have only one way to find out about the way their money is used — The RTI — which is also not enough and eventually have no rights to challenge the wrong doings of the government, if found. Take for instance, France produces a comprehensive audit report (certification des Comptes de l’Etat) while New Zealand, Russia and UK follow similar fool-proof procedure. Additionally, participation by various classes of people helps in proper scrutiny of the budget with respect to building priority and focus areas. Many countries follow public expenditure tracking system that gives a perspective to its citizens to monitor the public fund expense and further acts as a tool to raise voices against ineffective and inequitable management of funds.
The significance of such systems is even more pertinent in our case as lack of transparency and accountability has only benefited the middle and upper middle class at the cost of masses. And whatever is being doled out in the name of masses has being blatantly embezzled for personal gains. The budget has become an exercise to take contributions from all and to distribute amongst a few!
Happy reading.
Best,
<
Ya, transparency should be their
Christopher Mani <>
London, 4/29/2011 1:47:24 AM
nice article
Ankur <>
kolkata, 4/29/2011 1:42:43 AM
Very Nice sir...
Anil Kumar Sheoran <>
Noida, 4/29/2011 1:31:10 AM
Budget transparency is more important and is more effective rather shall I say is more corporatized, the citizen participation is so high that budget document are not framed until public passes the pre-budget statement.... Good. I like this editorial.
Santosh Kumar <>
New Delhi, 4/28/2011 4:08:39 AM
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