PARLIAMENT AND DEMOCRACY - Inter-Parliamentary Union

An effective parliament (I): The national level I 141
budget on budget day. Thereafter parliament’s role would be to debate the
broad terms of the budget proposals in plenary session, and identify potential
inconsistencies and possible savings through detailed analysis of the estimates
for expenditure in finance committee. The account of the function of the
Committee on Estimates in the Indian Parliament is clearly consistent with this
conception: it is ‘to make scrutiny of the expenditure by the Government
proposed in the annual financial statement and to report what economies,
improvements in organisation, efficiency or administrative reform consistent
with the policy underlying the estimates may be effected.’
This rather restricted conception of parliament’s role in budget formulation
is now becoming increasingly the exception rather than the norm. As a survey
by the World Bank reports, ‘legislators in most member states of the OECD
are presented with the budget between two and four months in advance of the
new fiscal year.’(Results of the survey on Budget Practices and Procedures,
OECD/World Bank, 2003). This timeframe enables parliament to play a much
more substantial part in influencing the policy content of a final budget,
whether in pre-budget discussions and negotiations, or during the scrutiny
stage of the government’s proposals. The contribution of parliament in this
respect is particularly developed in Norway, where negotiations on overall
expenditure and the distribution of the budget between different headings take
place in parliament itself. The tendency of such a process to inflate expenditure
limits so as to accommodate the preferred schemes of the different parties
was addressed in a budgetary reform of 1997:
The new budgetary process has widely been seen as an improvement.
In this process which in the Storting runs in the autumn, the political
parties start by negotiating a majority agreement on the total budgetary
expenditure, and on the total amount in the various budgetary
areas allocated to the standing committees. Only afterwards do the
standing committees negotiate the details, but they must remain within
the total budgetary allocation of their respective areas. Previously, the
total budgetary framework was agreed upon only towards the end of
the process, and this led to numerous unrealistic proposals for budgetary
increases from the various political parties, which clearly could
not be adopted within the necessary total budget allocation.
In Sweden a similar reform was instituted the previous year for similar
reasons, so as to ‘make it more difficult for various unstable majorities to
increase appropriations without the necessary funding’. The revised budgetary
process is described as follows: