Abstract

Budget is an instrument that helps translate public policies into concrete actions and desired outcomes. It is a blue print for converting intentions into reality. Like any tool it needs continuous honing. The budgetary practices in India have, however, largely remained unchanged over the years. A few ‘innovations’ such as the performance budgeting introduced in seventies as recommended by the first Administrative Reforms Commission and the subsequent ‘zero based’ budgeting have been outside the mainstream budgeting. The outcome budgeting introduced in 2005 has similarly remained on the margins. They have not had the desired impact on public expenditure management.

Budgeting is intimately linked with the way transactions are classified. The chart of accounts used to classify budget and expenditure has similarly not kept pace with the changing needs of the times. For an efficient public expenditure management, the accounts need to be computerized in such a way that they provide useful information in real time to managers of public funds. While accounts at both the union and state have been computerized, the software systems are fragmented and, are therefore, sub optimal. Only lately has there been some attempt at integrating the different systems into an Integrated Financial Management Information System (IFMIS).

The Seminar jointly organized by Centre for Budget and Policy Studies (CBPS), National Institute of Public Finance and Policy (NIPFP) and the World Bank on ‘Enhancing Performance through Improved Budgeting’ attempted to look at the above issues. The seminar was attended by officers from Finance and Planning departments of 16 States and from Ministry of Finance and other departments of Government of India.