Introduction
A government budget is a government document presenting the government’s proposed revenues and spending for a financial year that is often passed by the legislature, approved by the chief executive or President and presented by the finance minister of the nation. The budget is also known as the Annual Financial Statement of the country. This document estimates the anticipated government revenues and government expenditures for the ensuing financial year. Outcome budget is one of the most popular techniques of budgeting which measures the development outcomes of all government programmes.
What is Outcome Budget?
Outcomes are indicators showing the progress in achieving programme objectives, such as infrastructure improvement, decline in diseases, improvement in agricultural production, and achievements in education. These are not directly under the control of the programme managers due to the effect of many other extraneous factors.
The Outcome
Budget is expected to sharpen the budgetary projections by listing the
projected outcomes under various schemes programmes. The outcomes are expected
results not only in terms of monetary units or physical infrastructure but also
in terms of qualitative targets and achievements. Outcome budgeting is expected
to lead to efficient service delivery, transparency, and accountability.
For
example, financial allocations under primary education are outlays,
construction of an “n” number of primary school buildings could be the desired
output, and the outcome could be to educate an “x” number of children up to the
primary level.
Relevance of Outcome
Budgeting in India
Since 1968, Government departments
had been preparing performance budgets trying to link financial aspects to
physical results. However, this remained a supplementary device without any
perceptible impact on resource allocation. Acknowledging its drawbacks, the
Government introduced a revised version called ‘Outcome Budget’ in 2005.
The
performance-oriented budgets provide information on the use of public
resources, as against the conventional Budget indicates the resources allocated
to various programmes and schemes of the Government, but does not focus so much
on the use of those resources to achieve certain agreed results. Taking along
people of different socio-economic strata as part of an inclusive growth
process requires effective use of resources. This objective is easy to fulfill
by following outcome budgeting.
Performance
budgeting is not new in India. The outcome budget in India provides an
opportunity, which needs to be strengthened and taken forward. The important
factors in this context are the ability to prepare measures under different
Government programmes to evaluate results, and utilize this performance
information in shaping the Budget decisions, both in programme formulation and
resource allocation.
It is
expected to change the mindsets of government officials to become more result
oriented, instead of outlay centric. The Outcome Budget will discipline various
ministries in their spending by ensuring that they do not stagger it towards
the last quarter of the fiscal.
The outcome budgeting will help the government make its budgets more cost effective, double up as a major device to fix accountability and the government will manage its schemes better.
Outcome budgeting in India will help to release information on spending by various ministries for public scrutiny. This will ensure that everyone: people's representatives, the press, and those for whom the scheme is being implemented can check for themselves how well a project has been implemented.
The Outcome Budget will also help gauge the effectiveness of the money spent on various heads by different ministries. It will also help ensure that programmes and schemes do not continue indefinitely from one Plan period to the next, without an independent, in-depth evaluation.
India is the third largest economy (PPP) and also it is the largest democracy. The budget announced here is obviously of vast scale with large number of schemes and developmental programmes. Implementation of all the programmes within the targeted period is not an easy thing. Outcome budgeting will make the system more systematic leading to better implementation of the budgetary programmes.
Corruption in India has become an open secret. Every year huge amount of money is granted to spend in various developmental programmes but their true implementation and outcome is not known. Outcome budget will distinctly show the projected outcome and the true use of money can be hoped under the system.
Conclusion
The Outcome
Budget is expected to ensure efficient service delivery, transparency and
accountability which are the urgent needs of India. Some may argue that
preparing an outcome budget is a lengthy process and experts are necessary for
this purpose; but this argument is nullified by the merits of outcome budget.
In summation, outcome budget is very much relevant in India.