Consulting the people on Budget 2014
View(s):The annual budget-making process has begun with the Finance Ministry ‘ritual’ of calling for public representations on needs in the 2014 budget being made this week.
Separately President Mahinda Rajapaksa, who is also the Minister of Finance, began consultation meetings with trade representatives on Friday, August 2.
In the book of governance and transparency, consulting the public before presenting a budget so as to genuinely reflect the views of the public is indeed a laudable endeavour.
But does it work that way? Are the views of the public actually considered or is this just mere eyewash?
Last year too, representations were called in a public notice from “farmers, women, intellectuals, trade unions, pensioners, public servants, professionals, students, self-employed, trade chambers, NGOs, civil organisations, journalists and others”.
However, it is reliably understood, that only suggestions and recommendations from trade chambers, trade unions and other powerful groups (or individuals) were taken into consideration.
In fairness to the Finance Ministry, some of the suggestions from the public reflected the people’s inability to grasp what a budget is all about and hence were not considered. On the other hand, shouldn’t suggestions like the following be seriously considered?
- Corruption carried under the guise of development must stop.
- Budgets are not aimed for national development but to meet the Rajapakse family agenda.
- More transparency on income and expenditure in a way that ordinary people understand.
These comments and many others were based on a landmark pre-budget poll in August 2012 conducted jointly islandwide by the Business Times (BT) and the Colombo-based Research Consultancy Bureau (RCB).
In fact the BT-RCB poll was far more spread out than any government pre-budget initiative with the public. It was conducted in the Western, Central, North-Western, Southern, Eastern, Northern, North-Central, Uva and Sabaragamuwa regions.
Comments from the people asking for more transparency in income and spending; that budgets should be for the people, not the Rajapaksas’ and their extended family; and a halt to corruption in the name of development, could easily be tackled by presidential pronouncements in the forthcoming budget and (with the assurance that), such promises would be kept. It is no secret that the level of corruption is only going one way – UP. The Sunday Times and the Business Times have consistently reported on the myriad corruption that is taking place and very much so in the state land and mixed development projects where top officials, powerful politicians and influential businessmen are in cahoots. Cover-ups are the order of the day.
There was a common thread in last year’s email and street poll. Many felt there was overspending in the 2012 budget; tax collections were low; ways to tackle cost of living were ineffective and there was too much borrowing from here and abroad.The common man’s inability to grasp the realities of a budget and the makings of a budget also came out in the BT-RCB poll with many extraneous issues being discussed.
However the public cannot be faulted for this lack of understanding. Knowing how a budget works (in today’s context where budget estimates are played around like nobody’s business) is beyond the comprehension of any average citizen who represents the bulk of the Sri Lankan people.
And, for many reasons, a public call for representations by an important ministry (in this case headed by the President) is certain to draw all kinds of issues, complaints and suggestions of a non-budget nature for the simple reason that politicians and high officials are far removed from the people in tackling their day-to-day grievances.
The grievance mechanism has collapsed (including making a complaint to the police and expecting relief) and the people are compelled to launch public protests or take the law into their own hands. A good example was Thursday’s clashes between residents and police at Weliveriya, north of Colombo, over contaminated drinking water. At least two protestors were killed and scores injured as police tried to break-up the protest. This has been a nagging issue in the area and complaints to the authorities have fallen on deaf ears forcing residents to take to the streets.
Budget-making has become more of an art (with Treasury Secretary P.B. Jayasundera being a master craftsman) than a simple exercise of adding, subtracting or dividing. A budget is made up of expenditure (the cost of running the country per year), revenue (income from taxes, etc) and deficits (bridging the gap through loans and grants).
There is another component in the budget – supplementary estimates, a mechanism used to ask for extra funds through parliament whenever a ministry has exhausted its projected budget and needs more money.
However with the Finance Ministry directions to cut down on spending and avoid supplementary estimates, there have been only a few submitted in the past six to eight months.
In the meantime, another budget exercise is taking place where budgeted funds from one ministry are re-allocated to another ministry. In this case, the ministry has dipped into the budgets of the crucial health and education ministries and diverted some of it to the ministries of urban development, defence and economic development where spending has overshot budget targets.
With demands rising from these powerful ministries, this exercise is bound to continue notwithstanding the budget call for public representations or a public call to spend development for the people.
The BT-RCB pre-budget poll will also be conducted in the next weeks and its comments and remarks from the public are most likely to draw the attention (or criticism) of the Finance Ministry, as it did last year.
However to what extent the Government listens and implements the suggestions of ordinary people will always remain an elusive dream.
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