The Participation and Civic Engagement Team works to promote poverty reduction and sustainable development by empowering the poor to set their own priorities, control resources and influence the government, market and civil society institutions; and influencing governmental and private institutions to be responsive, inclusive, and accountable. Note No. 72 March 2003 Case Study 3 - Gujarat, India: Participatory Approaches in Budgeting and Public Expenditure Management India: Pro-Poor Budget Analysis in Gujarat1 Described as an attempt at "democratizing the budget process"2, DISHA obtains budget Background documents, reviews and dis-aggregates departmental allocations for different The state of Gujarat hosts almost a tenth of beneficiaries, researches the discrepancy between India's 80 million tribal people. Despite official proposed and actual spending, and prepares rhetoric of significant investment in tribal briefs on synthesized findings for informed development projects, results on the ground were public debates. DISHA is one of the five largest questionable. This prompted DISHA membership­based NGOs in India with most of (Development Initiatives for Social and Human its 80,000 members drawn from tribal and forest Action) to get into the business of budget workers. Although linked with its general analysis in 1992 to ascertain what actually was analytical work on budgets, DISHA runs a happening to funds allotted in the name of the separate lobbying and advocacy movement in tribals under the Tribal Area Sub-plan. DISHA favor of its huge tribal constituency. thus began by first taking up the issue of the state's 7.3 million forest laborers, not recognized Process as a formal professional group, but have since broadened the scope of their work to cover most Long considered irrelevant for the public, access aspects of budget analysis of general topics. to and acquisition of the annual budget documents itself is a real barrier to timely analytical work. Because of bureaucratic 1Draws on Bhatt, M. R. "Budget Analysis and Policy Priority: traditions and citizen indifference, this sort of DISHA's Experience", Foundation for Public Interest, Ahmedabad, October 1995; "Budget Analysis and Advocacy Work of DISHA", Foundation for Public Interest, October 1997; and Bhatt, M. R., "Alternative Budget Analysis: DISHA's Experience", Foundation 2An observation attributed to a former Member of the Planning for Public Interest, May 2000. Commission of India. ___________________________________________________________________________________________________ This note was prepared by Swarnim Wagle and Parmesh Shah of the Participation and Civic Engagement Group in The World Bank as a case study input on "Participatory Approaches in Budgeting and Public Expenditure Management" for the Action Learning Program on "Participatory approaches at the Macro level". Further details and documents related to this Action Learning Program are available at www.worldbank.org/participation The views expressed in this note are those of the author(s) and do not necessarily reflect the official policies of the World Bank. demand had seldom been made before, which percentage increase or decrease in budget meant that documents in the early years ­ 1993 to allocation to an item or sub-item, as well as 1995 - had to be borrowed from MLAs (Member excess amounts, if any, committed in actual of Legislative Assembly) who happened to be expenditures over revised estimates of previous friends. These are now made available by the years, iii) examples of fiscal indiscipline and government after a lag. To overcome the overt mathematical errors, iv) new items or technical categorization of budget items, DISHA expenditure proposals introduced for the first followed the Auditor General's standard time. The exercise was repeated in 1995 in a guidelines on budget coding which made it a lot more efficient manner. Discussing its own easier to compute alternative figures, and dispute evolution, DISHA has described the period from and contest official statistics. This basic 1993-95 as its years of "awakening" and the knowledge of accounting systems gave DISHA period from 1995-1997 as that spent on significant confidence to go onto the next phase "consolidation, demystifying and knowledge- of doing the actual analysis of the contents. After sharing" of budget information. Since 1996, to obtaining the documents on the day the budget is coincide with the assembly discussions on the presented to the Bidhan Sabha (assembly), budget in February and March, DISHA has been researchers at DISHA rearrange figures and data preparing around 30 briefs on such departments into different headings and enter them into a as forest, women, social welfare, etc. The computer. The quest is to patiently analyze the information on the budgets have also been data on incomes and expenditures, and interpret disseminated in local languages through what the proposed allocations, if spent, mean for newspapers and one-page fact sheets to non- the poor. Three questions are looked at, i) does urban masses, namely tribal villages and schools. the budget mention specific pro-poor policies, ii) As part of its on-the-ground monitoring of budget are these matched by adequate funding implementation, DISHA writes to village commitments, and iii) do they relate to the socio- authorities in tribal areas about the state of economic reality of the Gujarati poor ­ the various construction works pledged in the past tribals, dalits, women and agricultural laborers. and publicizes them to expedite progress. Budget The day after the budget speech, the analyst team data have also been used to write reports at DISHA briefs the press of its answers to these advocating policy change in areas such as questions; and when discussions commence in forestry. By analyzing public expenditures along the assembly, it starts to feed MLAs with the lines of what was promised and what was information briefs on the sectors on a daily basis. delivered especially to the dis-advantaged groups, DISHA is creating a strong system of These 4-5 pager briefs contain budget information exchange that is assisting the information and analysis in an accessible form. communities to articulate demands and create More `confrontational' than `academic' in nature, pressure to establish accountability within the these briefs are designed to create demand for public expenditure system. explanations from the ruling government. The first set was produced in June 1994 and Results distributed to all MLAs, cabinet members, key civil servants, the press and leading individuals These analytical briefs have substantially and civic groups interested in public finance - enhanced the quality of debate on the budget both approximately 2000 in total. Each brief dealt inside the assembly and outside, serving as an either with a department or a subject, such as effective channel for feedback to the government. education, home affairs (police), energy, finance, The briefs have mainly been put to use to call for or the Narmada project details. In 1994, a total of follow-up action, draw attention of the 90 pages on 12 different briefs were produced, in government to particular issues, and in speeches addition to the ad-hoc circulars related to tribal and op-eds. The press has obviously optimized development. Typically, the briefs would cover, the use of information mentioning DISHA's i) general information about the department and work in the context of such issues as government the amount it received for spending, ii) the decision to grant land titles to tribal people, the Forest Bill, problems of unorganized labor, and as M.D. Mistry, founder of the organization, resettlement policies. Major op-eds have says, influenced the redistribution of power appeared on a diverse range of topics from among state agencies, market forces and civil development in tribal areas to the status of leaf- society, disturbing the state's monopoly in picking women. Drawing on the contents of the collecting and allocating public resource. briefs, the media has also reported heavily on excessive administrative overheads in The analyses have improved budgetary planning development projects, unfair resource allocation by closing the gap between budgeting and to poor areas, and the numeric discrepancies in sectoral planning allowing better allocation and the budgets. These computational and other release of funds to priority sectors. As the errors (around 600 in the first year) have in substance of the budget becomes increasingly particular been picked up by MLAs in the state comprehensible to more people, the increased assembly with some fury and excitement, much interest and open debates have facilitated a better to the embarrassment of government officials. As flow of information among the ministries and a consequence perhaps, the budgets now have beyond (e.g., finance more aware of the fewer arithmetic and accounting mistakes. departmental ministries' requirements, while the Following a gradual familiarization with the latter more aware of the resource constraints the terminology, definitions and data classification in former has to work with). This successful the budget manuals, DISHA compared spending experiment in Gujarat has over the years been levels in tribal areas with those in non-tribal replicated in 12 other states of India, which came areas, revealing some disconcerting findings, together in February 2000 to form a single later documented in its sequel on "injustice in umbrella organization called People's BIAS tribal areas". But it is in the decision making (Budget Information and Analysis Service) to quarters that DISHA's work has been received analyze the national budget of India. DISHA has most encouragingly. Politicians have written in been a central influence and an important driving individually to thank3 DISHA for its innovative force behind the coalition. work citing how the briefs have been crucial for informed debates in the House. Over 50% of the Allied Issues recipients of these briefs were found to have used the contents the following day, about 25% the Because budgets are presented by the party in next month and the rest over a year. power, any analysis ­ critical or not ­ can not only serve as an ammunition for the opposition, DISHA's work has contributed to demystifying but they may also attempt to co-opt such work, as the process and content of budget preparation, nearly happened with DISHA. This was a real traditionally held to be an elite prerogative of few threat that DISHA diffused by adopting a policy technocrats. The large numbers, complex of non-restrictive access to its output. This has codification and accounting systems, and a long turned out to be a wise decision, for this has list of headings, usually wrapped around created "credibility, wider support and sustained technical discourses on simple revenue and interest" in its work across party lines. But expenditure plans, were outright inaccessible to because budget analysis can easily enter the common people. This illusion of abstractness political domain, without a fine balancing act, surrounding the budget was unpacked by DISHA there is a risk that even the most objective work into a few pages of key highlights, allowing can be dismissed under the charge of people to contest facts and policies. This has also partisanship. The technical work of analysis thus destructed the culture of secrecy surrounding the certainly needs to be handled with political budgeting process, and honored people's right to finesse. know the state of their public resources. This has, While many see the growth of civil society as a healthy complement to the limited reach and 3Over 230 letters of gratitude were received following the first adequacy of institutions in representative dispatch of the briefs in 1994, primarily from MLAs, NGOs and academic institutes. democracies, there are concerns over the increasing influence of professional pressure Annex: DISHA's Work in Steps groups and specialized lobbying forces that Demystifying the Budget influence government policies and defend vested Be versed in the `technical aspects' of decoding the interests through the back door, often mocking structure of budgetary information by understanding the larger electoral process. While DISHA may budget terminology, methods of topic categorization, have a sizable constituency among tribal and standardized accounting classification, by for instance, forest workers ­ the poorer sections of the knowing that if education is sector 1, primary Gujarati populace, this is a caveat to watch out education would be sub-sector 01, training under primary education would be 101, which would further for as the `model' gets replicated elsewhere. divided by state into diverse expenditure components from salaries to child allowance. Obtain budget documents the day it is being delivered to the parliament ­ this may not be as easy as it sounds, and might require sustained lobbying to ensure access to these reports. Once the voluminous documents are available, rearrange figures and data into different headings; enter them into a computer under simpler, understandable headings, possibly using a simple software package. Analyze the data on incomes and expenditures and find out what share of resource qualifies to be called pro-poor. Brief the media about the `poverty face' of the budget as soon as the budget is delivered for immediate coverage in the press. Budget Briefing and Dissemination Once the Assembly begins elaborate discussions on aspects of the budget, prepare daily briefs, four-five pages long, on the departments (e.g., home ministry) or subjects (Narmada project) highlighting a few key points: i) amount allocated for the department, ii) percentage increase or decrease in allocation compared to previous years, iii) examples of fiscal indiscipline and arithmetic inconsistency, iv) new items proposed, or old projects discontinued, etc. Deliver these briefs through overnight courier to all Members of Assembly before deliberations begin in the House the following day. Also share the briefs with the media, members of local intelligentsia. Disseminate budget information in local languages through news papers and one pager fact sheets in rural areas mainly through schools; use budget data to write articles on policy issues like land rights and forestry and on other issues affecting the poor. General Advocacy and Monitoring Cater specifically to one's central constituency ­ the tribals ­ by preparing ad hoc circulars and information notes. Write to village authorities in tribal areas about the state of construction works promised in past budgets to corroborate official claims and exact response from authorities on disparities between what was promised and what was delivered; use the press regularly, as a lobbying ally, to sustain the pressure and momentum. "Social Development Notes" are published informally by the Social Development Family in the Environmentally and Socially Sustainable Development Network of the World Bank. 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