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Proof of good governance
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How is the tax payers' money spent? Is it spent on anything worthwhile at all? A local NGO collective is trying to keep the common man informed about the budgetary mechanism of the City Corporation.
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Tax money down the drain?
AT THE international level, the corporate sector, investors, and the regulatory bodies are busy discussing the truthfulness of information provided in the balance sheet and statement of accounts published by various companies. With reports of misleading the owners of the company being reported regularly, the faith of the shareholders in the final accounts of their company is eroded to such an extent that the entire corporate world is thinking of bringing about fundamental changes in the disclosure norms. In effect, there is much talk of corporate governance.
Wrong information provided in the balance sheet of a company may affect a few shareholders and some investors. But there is at least a regulatory body to set right the mistakes. How effective a regulatory body such as Securities Exchange Board of India (SEBI) is, though, is a different question. But what about the common man's budget, formulated by the local government bodies, which affects lakhs of citizens? How true are the details of receipts and payments of the City Corporation? Where does the tax payers' money go? How is people's money spent (if at all it is spent) and on what project? Is it not the right of the citizens to know these details? The recent raids conducted by the Lokayukta on some of the offices of the City Municipal Councils (CMCs) have revealed how tax payers' money is misused.
But unfortunately, there is no mechanism in place by which citizens can know how the budget of the Bangalore Mahanagara Palike (BMP) is formulated. The way in which it is spent seems to be a bigger secret! One will be shocked to know that the accounts of the BMP is not audited for the past several years. And this happens in spite of the Karnataka Municipal Act requiring the Commissioner to keep ready the annual accounts and registers before the auditor for scrutiny not later than the first day of October in the year succeeding that to which such accounts and registers relate. Again, Schedule III-1(3) of the KMC Act says that the account books of the corporation shall be open without charge to inspection by any person who pays tax to the Corporation or his authorised agent on any day or days in each month to be fixed by the corporation.
Budgets and other financial statements prepared by the Government and other local bodies reflect the Government's real commitment to the well-being of the people. It is an expression of the Government's priorities, performance, decisions, and intentions. A study of the budget documents enables the citizens to know the direction in which the Government is moving, or rather, not moving at all. Besides, it can also be used as a benchmark to assess the actual performance against the commitments.
In Pune, we have the People's Budgetary Information and Analysis Service (People's Bias), an initiative of the National Centre for Advocacy Studies (NCAS). According to John Samuel of NCAS, People's Bias is a collective effort, promoted by a number of social change resource centres and grassroots organisations to demystify the budget and influence public policies for transparent, accountable and pro-people governance.
Nearer home, in Bangalore, efforts are being made to bring in some transparency in budget exercise. Some reputed non-governmental organisations (NGOs) such as Centre for Budget and Policy Studies, Janaagraha, Public Affairs Centre, and Voices have joined hands to form what is known as Public Record of Operations and Finance (Proof) said to be one of the first of its kind in the world. Proof provides an opportunity for the Government and citizenry to join hands and demonstrate that public money is being used for public good. After a 10-month campaign, Proof has been able to put in place a systematic structure of government performance reporting in the BMP. The Bangalore Agenda Task Force has put in enormous resources and 2-lakh manhours over the past 30 months in supporting the BMP to put together a world-class financial management system. It is not that Proof has evolved a new system of accounting, but it has been able to garner the support of the officials of BMP in sharing information in a user-friendly format. One need not be a chartered accountant to understand the contents of the financial statement. It is as good as a receipts and payment account.
Proof has understood that disclosure by itself is not a sufficient condition for good governance or citizens' participation. To motivate the common man to participate in the process, Proof has started sharing this information with the public. Quarterly meetings are held in the presence of all stakeholders and the officials of BMP. In the first meeting held recently, BMP circulated its financial statement showing the budgeted receipts compared to actual expenditure for the first quarter of this financial year. During this quarter, the total money spent by BMP is Rs. 15,302 lakh as against the receipt of Rs. 14,353 lakh. The BMP does not follow the accrual system of accounting. It may do so in future.
Proof appears to be one of the best efforts made in any country in the world. Apart from financial disclosures, it is also proposed to develop performance indicators. For instance, in case of education, it is essential to know the amount spent per student per year and the quality of the education provided in the schools run by the BMP. Besides, rating of the best and worst performing schools is also on the cards. Other areas/departments chosen for evaluation include health, horticulture, and engineering.
If budget analysis is to be of use to the community, it is essential that the tradition of secrecy should end. Recently, the Chief Minister of Andhra Pradesh went to the extent of putting the budget proposals on the web. There should be no secrecy in respect of budget formulation except, of course, in case of tax matters. It would be ideal if budgets are formulated after taking people into confidence and sharing information with them. After all, it is the citizen who knows best what his ward needs. Not only the budge proposals, but related documents such as the economic survey of the city, the financial position, development works undertaken etc. are to be shared with the public. More importantly, the citizens should be empowered to use budget documents as a tool of advocacy.
Those interested may contact Proof at 198, Nandidurg Road, Bangalore - 560 046. Phone: 3542381, 3542382. E-mail: proof@vsnl.net
Y.G. MURALIDHARAN
(YGM_CIC@rediffmail.com)
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