The presentation of the Annual Budget before the parliament is one of the mechanisms available to any legislature to scrutinise and authorise revenues and expenditures of the country. In this post I quote and summarise from two sources (Rick Stapenhurst, "The legislature and the Budget", in Legislative Oversight and Budgeting, World Bank Institute Development Studies, and The evolution of parliament’s power of the purse) which describe briefly how oversight by the legislature over the state's finances evolved historically. "The evolution of legislative "power of the purse" dates back to medieval times, when knights and burgesses in England were summoned to confirm the assent of local communities to the raising of additional taxes." By the 1300s the English parliament had begun to use its power to vote on funds depending on the acceptance of petitions presented by parliament to the monarch. In 1341, the monarch agreed that citizens should not be taxed ("charged or grieved to make common aid or sustain charge") without the assent of Parliament. "In parallel, the English Parliament began to take an interest in how money was collected, as well as how it was spent." In the 1300's itself, it started appointing commissioners to audit the accounts of tax collectors. This power of oversight however evolved gradually, and particularly over the 16th century, when the "monarchs needed parliamentary support and voting of funds for their various political and religious battles. King Henry VIII for example, gave Parliament enhanced status in policy making, in return for support during his battles with Rome." The 1689 Bill of Rights firmly established "the principle that only Parliament could authorize taxation. Still, at this stage there was still no such thing as an annual budget, and there was no comprehensive control of expenditures." The British Parliament also passed a resolution in 1713 to limit Parliament's power to "not vote sums in excess of the Government’s estimates. Consequently, the only amendments that are in order are those which aim to reduce the sums requested." "Since that time, the "power of the purse" function has been performed by legislatures around the world as a means to expand their democratic leverage on behalf of citizens."
A recent news report has discussed the methods by which states such as Chattisgarh have attempted to reform the Public Distribution System (PDS). Chattisgarh has computerised its PDS supply chain and introduced smart cards as part of a slew of measures to plug pilferage and weed out corruption in the system. In an effort to create a national computerised database for PDS, the Ministry of Consumer Affairs has launched an online National Transparency Portal for the Public Distribution System. The portal aims to provide end-to-end computerisation of PDS; it is a single platform in the public domain for all PDS related information. The PDS is a centrally sponsored scheme that entitles beneficiaries to subsidised foodgrains every month. Currently, beneficiaries are divided into the following groups: Below Poverty Line (BPL), Above Poverty Line and Antodaya Anna Yojana. As such, several challenges have been identified in the implementation of PDS. Some of them are as follows:
The creation of the e-portal could help track these issues more effectively and increase transparency in the system. The portal contains information relating to FPS and ration cards attached to the FPS. It is likely that this will help weed out bogus ration cards and improve targeting of subsidies. The portal also has information on capacity utilization of Food Corporation of India, state storage godowns, and data on central pool stocks. This helps track storage supplies of grains at each level and aims to prevent leakage of grain. With respect to data on PDS in states, the portal hosts information such as the central orders on monthly allocation of foodgrain to states, state-specific commodity sale prices, lifting position of states, etc. for public view. All states and union territories will be required to maintain and update the data on the portal. The reforms come at a time when the National Food Security Bill, 2011 is pending in Parliament. The Bill aims to deliver foodgrain entitlements through Targeted PDS to 75% of the rural and 50% of the urban population. The Bill is currently under examination by the Standing Committee of Food, Consumer Affairs and Public Distribution. It proposes reforms to the TPDS, which include the application of information and communication technology, including end-to-end computerisation. These reforms seek to ensure full transparency of records in the PDS and prevent diversion of foodgrains. The creation of the e-portal might be a step towards reforming the PDS. For an analysis of the National Food Security Bill, see here.
