The question pertains to the consultative process leading up to the finalization and presentation of annual budget in India. Hence, the Introduction should identify the role of Ministry of Finance as the Nodal agency in this context.
Further in the main body highlight the consultative process in budget making. Illustrate the role of pressure groups representing industry/ business; Agriculture; Non-Profit sector, Women’s group etc.
Conclude by highlighting the need of greater transparency and citizens participation it the process.
- Article 112 of the Constitution of India stipulates that Government should lay before the Parliament an Annual Financial Statement popularly referred to as ‘Budget’. The Ministry of Finance acts as the nodal government agency in the context of preparation, presentation and implementation of the budgetary provisions.
- The budget making process, however, involves multiple inputs before the final formulation and presentation of annual budget by the minister in charge.
- Over the years pressure groups have emerged as important participants in the pre- budget consultations.
- Pressure groups are the interest groups which work to secure certain interest by influencing the public policy. As such they represent diverse interests and agendas such as business/industry; Trade Unions; Agriculture/rural sector, Women’s groups etc.
- In India the role of pressure groups is limited to providing inputs and putting forward their expectations and demands to the ministry through mechanisms such as pre budget consultation of the finance minister which take place around the months of December-January. The Finance Minister chairs the meetings along with his deputy and key Ministry officials. The effort is to collect views and suggestions from various groups that help in finalising the Budget.
- For Example Industries/businesses are represented through groups such as the ASSOCHAM, CII and FICCI putting forward demands of rationalisation of tax structure and improving business environment.
- Similarly, the trade unions and Employees associations such as AIBEA participate in the consultation to put forward their interests such as demands of Government holding in the Public Sector Banks not reduced below 51%.
- Agriculture sector has been represented by groups such as Consortium of Indian Farmers Association putting forward demands of adequate pricing mechanism as well as subsidy support.
- Similarly, Women’s’ group played have played an important role in putting forward gender specific concerns and have played an important role in mainstreaming the idea of gender budgeting.
In sum it can be said that pressure groups in India play an integral role in the pre -budget consultation. The idea of participatory budgeting which has been gaining ground in recent year’s demands greater transparency and capacity building of citizens as participants. The role of pressure groups and CSOs in this context remains important to make the process sustainable.