February is important month one in our lives, because not only it is the onset of the spring but also the month when government unfolds plans for its earnings and expenditures for the forthcoming year. To some it brings joy, and to others, increased commitments and liabilities. On the quiescent flow of life, budget ushers in ripples and turbulence, and one wonders why should this event be repeated every year. Could this budget frequency not be reduced to once in two years?
In a period of 12 months, the month of January could be the most significant one in our lives. For the government, it means shutting down all policy making and focusing on collecting data for the annual financial statement, the budget. For departments, it involves frantic spending for ‘consuming’ the allocated budget, even on unwanted stuff. ‘Use it or lose it’ is the tempo for the month of January. Even with the best of efforts, many portions of the allocated budget remain unspent, and these amounts lapse. One wonders, what happens to the budget calculations if there are unrealized gaps in earnings and expenses.
To the executive, it means cutting off external communications for the fear that some ideas may be leaked out in the public domain, when actually they are reserved for the privileged cronies. Financial decisions are kept pending for the fear that mistakes may be made, due to misconstrued perceptions. Post budget as well, the government’s attention remains turned towards getting the budget passed and then communicating the allocations to departments and states. In other words, at least two months in the span of every financial year, the systems go inert, around the budget presentation event.
A parallel and seemingly unconnected activity that goes on is the preparation and execution of the 5-yearly plans. The Planning Commission is Prime Minister’s baby, whereas the budget Finance Minister’s. Who of the two, interacts with the achievers on the ground is anybody’s guess, but it is certain that both these plans are not congruous. If we aggregate the numbers of five budgets with the parallel running 5-yearly plans, one would be awestruck by the variations. Ministries and state governments are at loggerheads about the conflicting approaches outlined in the plans and the budgets.
In the financial period of one year, given the slow pace of development, and lethargic decision making there is not much sense in conducting budget related activities that last two months. All that it does is pushing people at breakneck speeds in one or two months, and spending the rest of time in lethargy. The idea of presenting the budget once in two years may be a good option and worth considering. This will allow everyone the time and space required for planning and execution. Israel has tried this approach successfully, and they are no doubt wise planners and executers. There are not many variations in the defense or railway activities, which stipulate revised planning every year. Moreover, why the direct taxes should be revised every year; upsetting the investment plans of individuals. Why should people be confronted with new rules on insurances, banking etc every year?