The Hindu Editorial Analysis- 22nd March 2025 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

India’s marginalised Parliament in budgetary affairs

Why in News?

The Budget reflects a nation’s economic vision, but in India, parliamentary influence is minimal. Strengthening legislative oversight through pre-Budget discussions and a Parliamentary Budget Office (PBO) is crucial for transparency and accountability in financial governance.

Budget: More Than a Financial Statement

• The Budget goes beyond mere numbers; it embodies a nation’s priorities, economic vision, and governance approach.
• In many democracies, parliaments play a crucial role in controlling national budgets, ensuring discipline and transparency.
• However, in India, the influence of Parliament is limited, as the executive branch has sole authority over budget-making, leaving legislators with minimal power to shape financial policies.

Role of the Budget in Democracy

• Budgeting is a fundamental democratic process that determines how public resources are allocated for social and economic development.
• Historically, parliaments globally have fought to oversee public finance to prevent excessive control by the executive.
• Engaging parliaments in budget discussions enhances transparency and contributes to better economic stability.

Limited Parliamentary Role in India

• In the Indian context, the Finance Ministry drafts the Budget independently, often without informing even other Cabinet Ministers.
• While the Lok Sabha can debate the Budget, its ability to make significant amendments is limited.
• Unlike some other bicameral legislatures, the Rajya Sabha in India does not have voting power over the Budget, further constraining parliamentary oversight.

Decline in Parliamentary Scrutiny

• Budget debates in Parliament have become shorter and lack thorough examination.
• Parliamentary committees have diminished power, limiting their capacity to influence policies.
• Consequently, the legislature often approves the Budget without meaningful scrutiny, undermining accountability.

Need for Pre-Budget Discussions

• Introducing organized pre-Budget discussions during the monsoon session can enhance legislative oversight.
• A discussion period of five to seven days would facilitate assessment of fiscal health and help shape economic priorities.
• Involving subject committees more actively would improve resource allocation and decision-making.
• These discussions would ensure that public concerns are addressed before finalizing the Budget.

Concerns Over Legislative Power in Budgeting

• Some express concern that increased legislative control might lead to populist spending.
• However, relying solely on the executive for fiscal discipline poses risks.
• A balanced approach, where the executive maintains control but is accountable to Parliament, is essential for effective governance.

Establishing a Parliamentary Budget Office (PBO)

• India currently lacks an independent body that provides impartial Budget analysis for legislators.
• Establishing a Parliamentary Budget Office (PBO) would offer data-driven insights similar to those in countries like the U.S., Australia, Canada, and the UK.
• The PBO would analyze government spending, revenue forecasts, and fiscal policies, contributing to more informed policymaking.
• It would assist parliamentarians with research-based policy briefs, enhancing their decision-making capabilities.

Restoring Parliamentary Authority Over the Budget

• The current Budget process in India limits legislative influence, diminishing democratic accountability.
• Implementing pre-Budget discussions and establishing a PBO would empower Parliament to play a more active role.
• These reforms would ensure that financial decisions are made through collective deliberation rather than unilateral executive control.
• Strengthening Parliament’s role in the Budget process would lead to fairer economic policies, enhanced transparency, and improved public trust in financial governance.

Charting a route for IORA under India’s chairship

Why is it in the news?

• The Indian Ocean Rim Association (IORA) is important for cooperation in trade, security, and sustainability in the Indian Ocean region.
• As India gets ready to take over the leadership of IORA in 2025, it plans to improve governance, increase funding, and use technology to boost maritime collaboration among member countries.

Introduction to IORA

• The Indian Ocean Rim Association (IORA) is a regional group that encourages cooperation among countries in Asia, Africa, and Australia, all connected by the Indian Ocean.
• IORA focuses on promoting economic growth, ensuring regional security, and fostering environmental sustainability among its member nations.
• Currently, India holds the position of Vice-Chair in IORA and is set to take over as Chair in November 2025 for a two-year term. During its chairmanship, India aims to enhance IORA's governance by increasing funding, integrating advanced technology, and developing maritime courses in collaboration with various partners.

Significance of the Indian Ocean Region (IOR)

• The Indian Ocean Region (IOR) is a vital part of the larger Indo-Pacific area, but it has unique features that set it apart.
• This region is home to two-thirds of the global population and boasts a rich diversity of marine life.
• The IOR is crucial for global trade, as it handles 75% of shipments worldwide and 50% of daily oil consumption.
• It contributes $1 trillion in goods and services, with intra-IORA trade reaching $800 billion in 2023.
• Despite its economic importance, the region faces significant challenges, including poverty, political instability, threats from climate change, environmental problems, and security issues such as piracy, terrorism, and trafficking.

Challenges Faced by IORA

• Limited Budget: IORA’s funding relies on its member countries, many of which are developing economies. The association operates on a very small annual budget compared to other regional organizations, like the Indian Ocean Commission, which had a budget of $1.3 billion for 2020-2025. Critical sectors such as maritime security, fisheries, disaster risk management, and the blue economy require substantial financial investment.
• Lack of Private Sector Participation: IORA does not receive contributions from private industries, despite their significant role in sectors like shipping, oil and gas, and marine tourism. Involving private companies in policy-making and funding could improve IORA’s financial resources and strategic direction.
• Technological Limitations: The IORA Secretariat, located in Mauritius, has restricted staff and resources, leading to inefficiencies in data processing. The reliance on manual data handling results in errors and delays. Therefore, digital transformation is crucial for enhancing policy analysis and governance within IORA.

India’s Role and Recommendations

• Aligning with IORA’s Goals: India’s Security and Growth for All (SAGAR) vision is in line with IORA’s objectives, providing a platform to initiate impactful projects and drive progress in the region.
• Leveraging Regional Expertise: India can tap into the expertise of IORA member states that excel in marine science and technology. Countries with strong marine industries, investment capabilities, and traditional knowledge can significantly contribute to IORA’s development and strategic initiatives.
• Promoting Sustainable Marine Governance: Integrating traditional coastal knowledge from small island nations into marine resource management is essential. Encouraging cooperation and knowledge-sharing among member states will lead to more effective and sustainable governance of marine resources, benefiting the entire region.
• Enhancing Maritime Education and Research: IORA should prioritize collaboration with research institutions and industries to develop academic courses focused on maritime studies. Specialized programs, such as marine accounting, can create a skilled workforce capable of managing the blue economy and ensuring sustainable use of marine resources.

Conclusion

• The Indian Ocean Rim Association (IORA) has the potential to foster economic and strategic cooperation among countries in the Indian Ocean Region.
• However, for IORA to become a more effective and impactful organization, India’s leadership will need to address several challenges.
• These include bridging funding gaps, strengthening institutional frameworks, and encouraging greater participation from the private sector.
• By focusing on these areas, IORA can enhance its governance and operational capacity, making it a stronger force for regional prosperity and collaboration.