The success and failure of representative democracy like ours largely depend upon how effectively the people's representatives carry out their responsibilities. Several other institutions including civil society and media also have important roles in the democracy as they can contribute to establish a connection between people with policymakers and executives, to fill the gap between deliverables of democracy and expectations of people and eventually to establish a faith of people to democratic system and procedures. However, legislature or parliament is the most important institution that can make the democracy work for greater good of people. The role of parliament is even greater when it comes to public finance management (PFM).
Availability of resources and capacity to use available resources are the two equally important determinants of country's development. There is another essential factor in between these two i.e. parliamentary oversights on mobilization and productive of limited resources.
Enhanced public finance management
Parliament is expected to exert influence on the executive to optimally utilize the public resources. Parliament should have opportunity to involve actively in setting the national priorities or in developing revenue mobilization and spending plan as per nation's requirement, oversee the functioning of executive to reduce revenue leakages or evasion and discourage misuse and mismanagement of public fund so as to achieve enhanced PFM with economy, efficiency and effectiveness.
International Budget partnership (IBP) via its biannual open budget survey (OBS) measures strength of parliament as a budget oversight institution on the basis of different indicators. Major indicators include: 1) Parliament's involvement in the budget process prior to submission of the executive's budget proposal 2) Its budget related research and analytic capacity 3) Time given to it for discussion on budget proposal 4) Its capacity in making amendments in executive's budget proposal before approving it 5) Power to sift the funds during budget execution and approval of supplemental budgets and 6) Its oversight role over the use of contingency fund.
The existing constitutional and legal provisions of Nepal provide scope for our parliament's involvement in the budget process throughout the budget cycle. Section 89 of interim constitution states that that no tax can be levied and collected except in accordance with law and no loan shall be raised or guarantee is given by the government of Nepal except in accordance with law. This provides explicit power to the parliament that government should take former's pre-approval to take tax and loan related decisions. Section 93 to 99 of constitution makes the government mandatory face parliament to take budget related decisions before execution.
According to OBS-2012 Nepal's legislator parliament is moderately strong from the perspective of its oversight capacity. It has also pointed out several areas of weaknesses that are in one way or other contributing to improper use of limited public funds.
We don't have any special unit within the parliament to conduct budget related research and provide necessary inputs to the members of parliament before taking part in the budget discussions. Thus, parliament is being unable to provide critical comments and feedback on budgetary priorities to the government even when it is asked for.
Also, parliamentarians hardly speak on budget policies and priorities also during the discussion over executive's budget proposal. Their only concern is if budget has been allocated for the project at their constituencies. It seems that they are unaware of their role to promote national PFM system.
In previous the parliament, there was a separate Committee on Economic and Labour Relations. It had no any specific on budget issues. Committee hardly discussed on national budgetary priorities. Ministry of Finance has an experience of submitting pre-budget statement to the committee a couple of week before presenting executive's budget proposal to the full house but no serious discussions on budgetary priorities were held.
Two weeks time is not adequate critical assessment of budgetary priorities, provide feedback to the government and incorporate such feedback to the budget proposal. Committee also lacks resources and expertise for independent assessment of the government's budget priorities based on which parliament could provide meaningful feedback to the government.
Moreover, government many times has failed to timely submit the budget proposal. We also have examples that budget proposal has been approved on the same day of submission. This not only undermines the role of parliament but also raises questions over its existence as the house of people's representatives.
Constitutionally, government cannot change budget without taking approval of parliament. Supplemental budget should be presented to the parliament if such changes are needed. However, there is no mechanism to monitor the discretionary transfers of fund from one budget head to other.
It seems that contingent fund is not kept to spend on some important but unplanned programmes but for spending as per discretion of cabinet without informing house. Parliament hardly shows concern on the use of such fund whose size is increasing every year.
We have a newly elected parliament now. Parliamentary committees are in the process of formation. It would be good if special committee to work on budget related issues i.e. budget committee is formed. Even if no changes are made on existing committee structure, budget focused subcommittee could be an option.
The most important thing is that parliament should be able to exercise its power so to establish real control of people over the public purse. Active engagement of parliament on the budget process from the very beginning of budget cycle is essential to establish such control. Government should provide comprehensive pre-budget statement to the parliament for the latter's critical feedback on time i.e. at least a couple of months before.
The budget proposal should be submitted on time and parliament should be given adequate time for discussion. New parliament should review its past performance in this regard and should undertake reform initiatives to enhance its oversight role at each step of budget cycle rather than having discussion on findings of national audit through public account committee.
We can not not expect all members of parliament to be able to speak on economic and budget related issues. On the other hand, we also should not think that those with an academic background other than economics or management can not take part in the budget discussions. It is the responsibility of parliament and government to provide parliamentarians with required knowledge, skills and inputs so that they can hold discussion on budget, regardless of their academic background.
Budget Research Office
The establishment of budget research office within the parliament is must for enhanced engagement of parliament in the budget process. The office should have a team of economic experts and researchers. It should conduct wide range of studies on different issues of public finance, assess government's existing budgetary policies and priorities, analyze annul policy, programme and budget, develop academic reports, disseminate findings of such studies to the parliamentarians in a simplified format and provide trainings and refreshers to them. This reform initiative should enable the members of parliament from any academic filed to take part in the budget-related debates to ultimately improve strength of the of the parliament in budget oversight.
(Published in The Rising Nepal Daily on 1 April 2014)
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