Control over Budget: Effectiveness of Parliament

Anirudh - March 25, 2010

During the recess, the Departmentally Related Standing Committees of Parliament examine the Demand for Grants submitted by various Ministries. The Demand for Grants are detailed explanations of that Ministry's annual budget which form part of the total budget of the government. These are examined in detail, and the committees can approve of the demands, or suggest changes. The Demand for Grants are finally discussed and voted on by the Parliament after the recess. (The post below lists the ministries whose Demand for Grants will be discussed in detail after the recess). The issue is - how effective is the institution of Parliament in examining the budget? Though India specific information on this subject is hard to find, K. Barraclough and B. Dorotinsky have cited the World Bank - OECD Budget procedures Database to formulate a table on the legislature approving the budget presented by the executive ("The Role of the Legislature in the Budget Process: A Comparative Review", Legislative Oversight and Budgeting). I reproduce the table below:

In Practice, does the legislature generally approve the budget as presented by the Executive? (in percent)
Answer	All Countries	OECD Countries	Presidential democracies	Parliamentary democracies
It generally approves the budget with no changes	34	33	14	41
Minor changes are made (affecting less than 3% of total spending)	63	67	71	59
Major changes are made (affecting more than 3% but less than 20% of total spending)	2	0	7	0
The budget approved is significantly different (affecting more than 20% of total spending)	0	0	0	0
Sources: K. Barraclough and B. Dorotinsky; PRS.

Policy

CAG Performance Audit on the Allocation of Coal Blocks

Karan - August 17, 2012

The Comptroller and Auditor General (CAG) released a Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production, on August 17, 2012. Some of the main findings and recommendations of the report are highlighted below:

There were no criteria for allocating coal blocks for captive mining till 1993. The process of bringing in transparency and objectivity began in January 2004. However, the process has experienced delays and had yet to materialise as of February 2012.
In the intervening period, 194 coal blocks with geological reserves of 44,440 million tonnes were allocated to private and government parties until March 31, 2011. The report finds that the benefit to private allottees has been estimated at Rs 1.86 lakh crore for Opencast mines. The report states that the government could have tapped some of this financial benefit by expediting the decision on competitive bidding for allocation of coal blocks.
The rate of increase in production of coal by Coal India Limited (CIL) during the 11^th Plan period remained below the target set by the Planning Commission. Capacity addition projects were delayed due to the lack of coordination of government agencies involved in statutory clearances and land acquisition. There were mismatches in excavation and transportation capacities of mines, and suboptimal use of Heavy Earth Moving Machinery.
The CAG recommends that Ministry of Coal (MOC) should work out modalities to implement the procedure of allocation of coal blocks for captive mining through competitive bidding.
The CAG recommends that the MOC should constitute an empowered group along the lines of Foreign Investment Promotion Board as a single window mechanism for granting clearances, with representatives from central nodal ministries and state governments.

A one-page summary of the main findings and recommendations can be accessed here. The full report can be accessed on the CAG website.

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Control over Budget: Effectiveness of Parliament

CAG Performance Audit on the Allocation of Coal Blocks

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