Meaningful public participation in budget process: the sooner the better (Commentary)

Krishna Sapkota / Kathmandu: Amidst the Kathmandu-centric protests of Federal Alliance – comprising Madhesi and ethnicity-based parties – demanding rewriting of the constitution and rumours of change in guard lately, the government unveiled the national budget for the fiscal year 2016-17 in the statutory date of 15th Jestha (May 28). This is the first budget after the promulgation of the new constitution – which is believed to be an outcome of the most participatory and representative body, the Constituent Assembly in the constitutional history of Nepal.

The Nepal Constitution, for the first time, has specified the date for presenting the executive budget in the parliament, giving no space for political manoeuvring to destabilize the process for formulation, enactment and execution of the budget. Timely unveiling of budget undoubtedly is a part of the implementation of the new constitution, which would significantly help institutionalize budgetary system of the country and increase capital spending capacity of the government. Albeit it seems a tiny, the constitutional provision could have greater impact on the life of the nation and people as well with rise in the spending of recurrent chunk of the budget.

Yet the constitutional provision on budget presentation alone is not adequate to leverage public financial management sector of the country. To reckon with,Nepal does not produce an important budget document Citizen Budget – a simplified version of the Executive Budget Proposal or Enacted Budget – to inform citizens of the state of public financial management throughout the entire budget cycle. The budget is a technical document and it is state’s responsibility to demystify dense and technical presentation of budget and present them in citizenry way with the use of charts, graphs and other tools. So, it requires that the State bring Citizen Budget with non-technical presentation of executive budget or enacted budget to allow public to comprehend the budget that affects their lives in many ways. Though the time for introducing Citizen Budget of executive budget has been over with the budget unveiling in the Legislature-Parliament last Saturday, the opportunity is still there to come up with a simplified version of the enacted budget as it is still under discussion in the parliament.

Likewise, another important document missing in Nepal’s budgetary system is Pre-Budget Statement that presents the executive’s economic and fiscal policy plans and priorities for the forthcoming budget year and encourages public debate on the budget in advance of the presentation of the more detailed budget proposal in the parliament. According to the International Budget Partnership (IBP)’s Open Budget Survey Methodology, the Pre-Budget Statement reflects the culmination of the strategic planning phase of the budget process, in which the government broadly aligns its policy goals with the resources available under the budget’s fiscal framework — the total amount of expenditure, revenue, and debt for the upcoming budget year.

The pre-budget, according to international best practice, should be made public at least a month before the executive presents the detailed budget in the parliament. It is to create opportunities for public including citizens and their organizations to put their deliberations on fiscal and budget policy.

People’s access to timely and credible information about government programs, mainly about how the public revenues are raised and spent through budget, is important to secure citizen participation and their ownership in the budget process of the country. Without these two important documents in place and varieties of ways established for ensuring public participation in budgetary process, citizens would not be in a position to hold the governments to account and influence public engagement in the matters of budget.

Though there is a 14-step planning process to ensure local level needs in the national budget, it does not allow direct public participation in government fiscal policy and budget-making in the true sense. Nepal’s Open Budget Index-2015 score on public participation on budgetary affairs is 19 out of 100 which is lower than the global average of 25. It shows that the government provides limited opportunities for public to engage in the budget process. In this context, Nepal’s track record of low capital spending and its inability of keeping economy productive somehow attributes to scantly public participation in the budget process rightly beginning from formulation to auditing.

In order to improve people’s participation in budget, the government needs to set up credible and effective mechanisms (public hearings, surveys and focused group discussion) for capturing a range of public perceptions on budget matters, hold legislative hearings on the budget of specific ministries and agencies and set up a specialized budget research office at the legislature to foster public discussions on the budget, among others.

Importantly, direct participation of people in fiscal policy and budget-making has been established as a civil right in the High-Level Principles of Fiscal Transparency, Participation and Accountability, promulgated by the Global Initiative for Fiscal Transparency (GIFT). Principle 10 establishes that ‘Citizens and non-state actors should have the right and effective opportunities to participate directly in public debate and discussion over the design and implementation of fiscal policies’. The GIFT High-Level Principles were endorsed by the United Nations General Assembly in 2012 (UNGA Resolution 67/218), encouraging member states to “intensify efforts to enhance transparency, participation and accountability in fiscal policies, including through the consideration of the principles set out by GIFT”.

Budget is a key instrument to bring development and prosperity in a country. A robust budgetary system with effective public participation mechanism is a pre-condition to make change happen in economic front of the country. The new constitution has offered Nepal a strong foundation for stability so it is an opportune moment to bring reforms in budgetary system so as to cherish the goal of the statute towards the journey to prosperity. Without paving the way for public participation in fiscal-policy and budget-making, it is not possible to realize the greater goal of prosperity of the nation. So, there should be no further delay in introducing a Citizen Budget and Pre-Budget Statement as part of our national budget system. RSS