A national budget isn’t just about numbers—it’s a roadmap that reflects a country’s economic goals, governance approach, and policy priorities. In a democracy, the power to oversee public spending should rest with the people’s representatives, ensuring financial discipline, transparency, and accountability.

However, in India, Parliament plays a minimal role in shaping the Budget. Instead of thorough discussions and approvals by lawmakers, the process is largely controlled by the executive, leaving elected representatives with little say in financial decisions that impact the entire nation. This raises concerns about democratic oversight and fiscal accountability.

Shouldn’t elected representatives have a greater say in deciding how the nation’s money is spent?

The Budget as a Pillar of Democracy

The Budget serves as the financial blueprint of a nation, determining the allocation of resources and setting the government’s economic and social priorities. It acts as a pillar of democracy by the following ways: 

1. Ensures Accountability & Transparency – A well-structured budget allows elected representatives to scrutinize government spending, ensuring that public funds are used efficiently and for the public good.
2. Prevents Executive Overreach – Legislative control over finances acts as a safeguard against unchecked government power, reinforcing the principle of separation of powers in a democracy.
3. Reflects People’s Priorities – Through parliamentary debates and discussions, the budget aligns with citizens’ needs, ensuring that policies address economic and social challenges effectively.
4. Promotes Economic Stability – Greater legislative engagement in budgeting leads to balanced policies, reducing fiscal mismanagement and ensuring long-term financial sustainability.
5. Strengthens Public Trust – When governments are transparent about financial planning and expenditure, it enhances public confidence in democratic institutions and governance.

Reasons for Structural Weakness in India’s Budgetary Process

1. Lack of Legislative Involvement in Budget-Making
   • Budget Drafted Behind Closed Doors: Unlike other laws, the Budget is almost entirely prepared by the Finance Ministry, with little to no input from Parliament. Key decisions are made by the Finance Minister and senior bureaucrats, while even Cabinet Ministers remain largely unaware until the final presentation.
   • Minimal Transparency Compared to Other Democracies: Many developed nations involve their legislatures in budget formulation, ensuring greater accountability:
     • United States: Congress holds extensive pre-Budget discussions, and the President’s proposal is thoroughly debated before approval.
     • Germany & Sweden: Parliamentary committees review budget proposals in advance, allowing lawmakers to shape financial policies.
   • India’s Weak Parliamentary Role in Budgeting: In India, Parliament is largely excluded from early-stage budget discussions, limiting its influence on financial planning. By the time the Budget is presented, most decisions are final, leaving little room for meaningful debate or amendments.

2. Insufficient Time for Debate and Review
   • Rushed Budget Discussions: Once the Budget is presented in the Lok Sabha, Parliament is expected to debate, scrutinize, and approve it within a short timeframe. This often results in hurried discussions, where key financial decisions do not receive the detailed analysis they require.
   • Compressed Timeline for Approval: The Budget is usually presented in early February and must be passed before the end of March. Given the complexity of financial allocations across various sectors, this tight schedule limits meaningful debate and informed decision-making.
   • Lack of Rigorous Scrutiny: With limited time, MPs struggle to thoroughly analyze spending plans, assess their impact, or suggest substantial modifications.As a result, many budgetary provisions get approved without deep examination, weakening parliamentary oversight over public finance.
3. Weak Role of Parliamentary Committees
   • Limited Oversight Power: Parliamentary standing committees are meant to ensure oversight, but their influence on the Budget is minimal. They can review financial allocations but lack the authority to enforce changes.
   • Non-Binding Recommendations: The Departmentally Related Standing Committees (DRSCs) analyze budgetary demands from various ministries. However, their recommendations are not binding, allowing the government to overlook their suggestions without consequence.
   • Ineffective Scrutiny: Since the government is not obligated to act on committee recommendations, parliamentary scrutiny of financial policies remains weak. This reduces the effectiveness of democratic checks and balances in budget-making.
   • Stronger Legislative Committees in Other Democracies: Countries like Canada, Australia, and the UK empower their legislative committees to play an active role in budget analysis. Their recommendations hold greater weight in shaping financial policies.
   • Access to Independent Economic Research: Many developed democracies have dedicated budget offices that provide legislators with independent economic analysis. This ensures that lawmakers can make informed decisions and offer well-researched recommendations on fiscal policies.
4. The Marginal Role of Rajya Sabha: Another structural weakness in India’s budgetary process is the limited role of the Rajya Sabha (Upper House) in financial matters.

• While the Rajya Sabha is a key legislative body responsible for reviewing laws and policies, it has little authority over budgetary decisions.
• According to Article 110 of the Indian Constitution, the Budget is classified as a Money Bill, meaning it is primarily the domain of the Lok Sabha (Lower House).
• Once the Lok Sabha passes the Budget, the Rajya Sabha can only discuss it but cannot amend or reject it.

5. No Power to Modify the Budget
   • Limited Legislative Authority: One of the biggest constraints on Parliament’s role in budget-making is its inability to make direct modifications. MPs can raise concerns and propose changes, but they have no authority to alter expenditure or taxation proposals.
   • Comparison with Other Democracies: In countries like France and Sweden, legislators have the power to suggest alternative spending plans and reallocate resources. Indian MPs, however, lack such authority, limiting their role to discussion rather than decision-making.
   • Majority Rule in Budget Approval: Even within the Lok Sabha, opposition parties struggle to push for amendments. Since the ruling party usually holds a majority, the Budget is passed with little resistance, leaving minimal room for modifications.
   • Impact on Fiscal Oversight: This restriction weakens Parliament’s ability to influence financial policies effectively. As a result, the Budget remains largely an executive-driven exercise, with Parliament playing only a symbolic role in its approval.

Which global models of legislative Budget scrutiny can India learn from to enhance parliamentary engagement?

Necessary Reforms to Address the Structural Weaknesses

1. Need for Pre-Budget Discussions

Parliament should play a bigger role in shaping the Budget, not just approving it. A structured pre-Budget discussion, held in the monsoon session, would let MPs review the country’s financial health and set priorities. This process would also encourage better coordination among various parliamentary committees, leading to well-rounded economic planning.

2. Setting Up a Parliamentary Budget Office (PBO)

Unlike countries like the U.S., Canada, and the U.K., India has no independent body that provides non-partisan budgetary analysis to MPs. A PBO would fill this gap by offering expert research, economic forecasts, and data-driven insights. It would help parliamentarians understand spending patterns, revenue estimates, and fiscal policies without relying solely on government briefings.

3. Restoring Parliament’s Authority Over the Budget

Right now, Parliament’s role in budget-making is largely ceremonial, which weakens democracy. By introducing pre-Budget discussions and an independent PBO, India’s elected representatives could actively shape financial policies rather than just approving them. These changes are not just technical fixes—they are essential for making budget decisions more transparent, fair, and representative of public needs.

Conclusion

A truly democratic budget isn’t just about how efficiently the government plans and spends money—it’s about ensuring that Parliament plays an active role in shaping and scrutinizing those decisions.

Right now, India’s system sidelines Parliament, reducing its influence over the Budget. This needs to change so that there’s more balance and accountability in how public money is managed.

One way to fix this is by holding proper pre-Budget discussions and setting up a Parliamentary Budget Office (PBO)—a dedicated team that provides MPs with independent research on economic matters. This would help Parliament contribute meaningfully to budget-making, making the process more transparent, democratic, and effective.

If Parliament reclaims its rightful role in public finance, it won’t just strengthen economic oversight—it will also reinforce its position as the guardian of India’s democracy and financial integrity.

BACK2BASICS: Parliamentary Budget Office (PBO) – An Overview

What is the Parliamentary Budget Office (PBO)?

A Parliamentary Budget Office (PBO) is an independent, non-partisan institution that provides objective analysis of government budgets, fiscal policies, and economic forecasts. It assists lawmakers in making informed decisions, enhances legislative oversight, ensures transparency, and improves accountability in public finance management.

Global Examples

• United States: The Congressional Budget Office (CBO) provides independent budgetary evaluations.
• Canada: The Parliamentary Budget Officer (PBO) supports fiscal scrutiny and analysis.

Constitutional Status of PBO in India

The Indian Constitution does not explicitly mention a Parliamentary Budget Office (PBO). However, its establishment aligns with constitutional provisions related to financial oversight and legislative accountability:

• Article 112 (Annual Financial Statement):
  • The Union Budget is presented before Parliament, which has the authority to scrutinize and approve it.
  • A PBO can strengthen this oversight by providing independent budgetary analysis.
• Article 266 & 267 (Consolidated and Contingency Funds of India):
  • Parliament controls government expenditure, and a PBO can evaluate the fiscal implications of such spending.
• Article 148-151 (Comptroller and Auditor General – CAG):
  • While CAG audits past expenditures, a PBO would provide forward-looking budgetary insights for better fiscal planning.
• Article 105 (Powers and Privileges of Parliament):
  • Parliament has the right to seek financial information. A PBO could serve as an expert resource, offering unbiased fiscal analysis.

Conclusion

Establishing a Parliamentary Budget Office (PBO) in India would enhance transparency, accountability, and fiscal discipline in governance. It would equip legislators with independent budget analysis, improve financial oversight, and ensure evidence-based policymaking—making it a crucial step toward strengthening India’s parliamentary democracy.