The general public is entitled to access to timely, credible information about government programs in any democracy. How the public revenues are raised and spent through budget is significant to hold the governments accountable and influence public engagement in the matters that affect their lives. As a key accountability mechanism, budget openness allows citizens to oversee what their governments are doing to meet the needs of the people. Lack of transparency can lead to the selection of unpopular and inappropriate programs and corrupt and wasteful spending. Therefore, budget transparency is central to accountability and to ensure that every unit of public funds—whether raised from foreign assistance or local taxpayers—is used as appropriately and efficiently as possible.
However, to our chagrin, Nepal slips down global budget transparency index with the government making it harder for citizens to understand and influence budget decisions affecting their lives. What this means is that the government has not facilitated citizens to get information about what is being done with public money, and to hold the government to account.
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According to the biennial global Open Budget Survey (OBS)-2012 recently conducted by the International Budget Partnership (IBP), Nepal’s score stands at 44 out of 100, which is only marginally higher than the average score of 43 for all the 100 countries surveyed, but lower than several other South Asian countries including Afghanistan (59), Bangladesh (58), India (68), Pakistan (58) and Sri Lanka (46). Nepal’s score indicates that the government provides the public with only some information on the national government’s budget and financial activities during the budget year. This makes it challenging for citizens and oversight institutions to hold the government accountable for its management of the public fund.
The OBS assesses whether the central government in each country surveyed makes eight key budget documents available to the public, and whether the data content in these documents are comprehensive, timely and useful. The Survey also examines the extent of effective oversight provided by legislatures and Supreme Audit Institutions (SAI) as well as the opportunities available to the public to participate in national budget decision-making processes. The eight key budget documents are pre-budget statement, executive’s budget proposal, enacted budget, citizen’s budget, in-year reports, mid-year review, year-end report, and audit reports.
Nepal’s score on the Open Budget Index has remained largely constant over the years. The score during four years is recorded to be 36 in 2006, 42 in 2008, 45 in 2010 and 44 in 2012. However, with a dropping score of 44 out of 100 on the OBI-2012, the government of Nepal has the potential to greatly expand budget transparency by introducing a number of short-term and medium-term measures.
The country has scored zero in two budget documents—pre-budget statement and citizen’s budget. The executive budget proposal also lacks information on certain fiscal activities that can have a major impact on the government’s ability to meet its fiscal and policy goals, including information on extra-budgetary funds, quasi-fiscal activities, tax expenditures, contingent and future liabilities, outputs and outcomes, and financial and other assets. Absent this information, the public does not know the government’s complete fiscal position.
Quite interestingly, Nepal still does not produce a Pre-Budget Statement (PBS), which as per international best practices, should be made available to the public by the executive a month prior to the budget presentation in the legislature. The PBS provides information that links government policies and budget and typically sets forth the broader parameters defining budget proposal that is presented to the legislature. The government’s budget proposal becomes budget law without adequate discussion in the parliament and public forums. This limits the chances of citizens’ engagement in the budget process.
Budget transparency is central to accountability and to ensure that public fund is used appropriately.
A Citizens Budget is a nontechnical presentation of a government’s budget that is intended to enable the public to understand a government’s plans for raising revenues and spending of public funds in order to achieve policy goals. Nepal has yet to adopt Citizens Budget, which reveals the government’s lack of accountability to their citizens for what they do and how they do it.
Beyond improving the availability, accessibility and comprehensiveness of key budget documents, there are other ways in which Nepal’s budget process can be made more open. These include producing and publishing a pre-budget statement and a citizen budget, and increasing the comprehensiveness of executive budget proposal, focusing on expenditures classified by programs for the budget and previous years, multi-year estimates of aggregate revenues for at least two years beyond the budget years, among others.
Likewise, Nepal should scale up comprehensiveness of In-Year Report, Year-End Report, and Audit Reports including reports on off-budget expenditure for greater budget transparency practices. Ensuring the existence of a strong legislature and SAI that provide effective budget oversight and providing greater opportunities for public engagement in the budget process are also important areas to be reckoned with. Indeed, it is an opportune time to make public discourse on budget openness and open up avenues to boost Nepal’s performance in budget transparency in the global arena in the years to come.
The author is an IBP-implemented Open Budget Initiative’s Researcher for Nepal
sangreela@gmail.com
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