In August 2005, a new experiment was initiated by India’s Ministry of Finance under P. Chidambaram. Every Ministry would have to prepare an “Outcome Budget” and present it in parliament along with its annual budget. An Outcome Budget, as the foreword to “Outlays and Outcomes – towards achieving better results” explains is essentially the following:
It is a mechanism to measure the development outcomes of all major programmes.
Therefore, to improve the quality of government programmes, every ministry has to explain the amount allocated for a particular programme/ scheme/ project in terms of what kind of physical outcome would be achieved by spending some amount.
For example: if the Ministry for Human Resource and Development wants to spend 1000 crore on elementary education, it will have to explain what will be the exact increase in literacy, in infrastructure for schools, in improving the quality of teachers etc that spending this money will achieve.
At the end of the year, when next year’s budget is presented, the Ministry will then have to state what the achievement has been compared to the expected results. In the last 4-5 years, most ministries have started publishing Outcome Budgets. One ministry which does not, is that of Defence.
The Defence Ministry was exempted from this process by the Ministry of Finance. The Defence Ministry had stated its reasons before a committee of Parliament as:
“Sir, we will try to supply that but the fact is that in the Ministry of Defence we have not produced the Outcome Budget in the past. Ever since the Ministry of Finance issued the instructions regarding the Outcome Budget, we are trying to do it. The Ministry is trying to develop an infrastructure for this. But in the Ministry of Defence because of the nature of its functioning and the nature of expenditure, we could not produce the outcome budget. But if you feel that it should be submitted, we will try to do it for certain areas. But I do not think that it can be given in two-three days because it is a long exercise and it would mean involving everybody. So, I would say that it is simply the nature of the functioning of the Ministry that made it a little difficult.”
“Committee have been informed that the areas and organizations for preparation of Outcome Budget were identified. Although these organizations prepared the Outcome Budget, the same was considered inadequate. The concept being new, there was lack of conceptual clarity with regard to the methodology to be followed for the preparation of the Outcome Budget…..The Committee further note that the Defence Expenditure Review Committee set up to study the issue of curbing wasteful expenditure has also recommended that the proposed Demands for the year 2009-10 should be entirely outcome oriented and a workshop may be conducted to finalise the methodology. Even then, the Ministry could not present the Outcome Budget during the year 2009-10. …. The Committee hope that the Outcome Budget of the Ministry would be presented to Parliament for the year 2010-11.”
This year again, no Outcome Budget has been prepared.
I read this fact as an indicator if the fact that secrecy never does anything to improve performance. There may be areas which genuinely need to be protected for reasons of security. But financial performance and the status of our armed forces should be openly discussed and debated not just in Parliament but also outside it. With no outcome budgets being presented, and with virtually no documents concerning the Ministry in public domain, one cannot help but be perturbed about the status of our armed force. This especially when the Ministry states it does not have the infrastructure to prepare an outcome Budget!!!