The need for a new approach to budgeting

The problems in Greece have alerted us to a fundamental problem with government accounting. It lacks transparency. The Greeks fudged their way through the process of meeting the Maastricht deficit/ debt criteria in order to gain entry into the Eurozone. Finally they have been caught.

What about India? How transparent are the Government accounts? Take the recent budget. Not a word about what was promised last year , what has been delivered during the year that has passed, why there were shortfalls and so on. In many cases such as infrastructure, highly aggregated figures have been provided that make it quite difficult to understand and assess the quality of spending. And the fact that the unproductive revenue deficit remains as stubborn as ever has been conveniently brushed under the carpet. Year after year, we hear the Finance Minister making pompous statements about the future. Each year, the Finance Minister talks about how he has put in place a budget that will promote inclusive growth and so on. As though his grandiose statements by themselves will generate growth.

And when all this happens, our media and business with some rare exceptions keep applauding from the sidelines. One well known personality even described the latest budget as the first non populist budget after independence.I have seen few articles in the media that have pressed for more information from the Finance Minister.

There is a saying that the people get the government they deserve. India is a shining example.