A few days back, the Upper House returned the Finance Bill to the Lower House, marking the end of Parliament’s budgetary exercise for the year. Ritualistically, the Union Budget grabs popular attention. Allocations, sectoral priorities, and taxation dominate the discourse.

However, from the lens of public expenditure, the Budget’s deliberation is limited to an accounting exercise. To this extent, the Outcome Budget, released by the Finance Ministry, is conspicuously absent from discussions. Neither questions during the Parliament’s Question Hour nor debates pertain to the Outcome Budget.

Ask any development economist about the statement of finances, the common refrain will be to link outlays with outcomes, focus on outcomes instead of low-hanging outputs, get to bottom-line implementation beyond top-line allocation etc.

In this regard, India announced its first Outcome Budget in 2006 as a public financial management reform where outlays are mapped to their functional objectives. Per the General Financial Rule 2017 (54), ministries and departments must prepare an Outcome Budget following a specified framework.

While outlays are the first step listing the quantum of money allocated for a policy, outcomes are the intermediate measurable indicators that lead to the outcomes.

For instance, consider pollution: capacity of pollutant treatment plants serves as an intermediate output, while the actual enhancement in air or water quality is the desired outcome. Even allowing for the slack that development reforms often need gestation and may not be immediately comparable, comparing official targets of the Outcome Budget for 2024-25 with those of 2022-23 reveals concerning gaps.

Firstly, of 93 departments, only 57 have shared their outcome targets in the Budget document. Moreover, of all States and Union Territories, only 11 participate in outcome budgeting for their State budgets.

Secondly, among those which have contributed, many departments have unaltered targets hinting that the outcomes and outputs haven’t been met, let alone progressed even after two years.

For instance, Rashtriya Krishi Vikas Yojana under the Ministry of Agriculture has had the same output target of establishing 9,347 farm machinery banks for crop residue management and an outcome objective of having 25 tonnes of crop residue managed using machinery, since 2022.

Similarly, targets for power availability per unit area have been rolled over year after year. The stagnated goals reflect poor forecasting of feasible targets given state capacity as well as the abdication of responsibly delivering outcomes from public funds.

Diluting goals

Thirdly, through many subtle changes, outcome goals across ministries have been diluted in their ambit.

To illustrate this, let’s look at the Ministry of Skill Development’s objectives for PM Kaushal Vikas Yojana: the old outcomes targeted job placement percentages, the new ones in 2024 merely target certification. Placements after training should be the benchmark, certifications are merely convenient sidestepping. Even reporting of the outcome indicators has changed year over year, for instance from reporting departmental yearly targets to cumulative totals or percent increases, making comparisons cloudy. While some adjustments in metrics may be rational, we need more transparency and accountability on previous goals.

Outcome monitoring in India is increasingly becoming a checklist item exercised in oblivion. The taxpayer’s money is precious. Given India already incurs a high cost of public funds i.e. the society incurs a cost of about ₹3 for each rupee of public expenditure due to inefficiencies, efficacy is even more important. Unfortunately, there is a perception that only allocations signal priority. This incentivises departments to seek more funds instead of cost-effectiveness and festers in an inattention towards focusing on manifest outcomes once allocations are made.

Subjecting expenditures to procedural audits by CAG is not enough. Assessing whether the allocated funds delivered or not enhances the policy-making process. It forces discussion on the validity of schemes. Such a discourse leads to an institutionalised reassessment of the policy’s returns, concentrates on the impediments in implementation and enables thinking on why certain policies did not translate as expected on the ground. Unless legislators and the broader media prioritise this, the discussion on the Budget shall remain limited.

Discourse needed

Having the discourse will be the first step. There is a need for expansion in coverage of outcome budgeting across States, investment in capacity for better monitoring, linking line items with Sustainable Development Goals and orientation of government departments especially at lower levels to an approach in terms of returns on resources expended.

The Development Monitoring and Evaluation Office of NITI Aayog has recently published a compendium which reports global best practices in output-outcome monitoring.

This budgetary exercise is an attribute of democratic accountability where the state opens itself up to scrutiny.

We, as citizens and our representatives ought to pursue this meaningfully. Parliamentary debates and speeches have focused on sanctioned amount or their utilisation. As we head to 78th year of our independence, still grappling with severe developmental gaps from inadequate human capital to pollution, it is our moral imperative to aspire for more accountability.

Gupta is predoctoral researcher in Economics at Kellogg and a former LAMP fellow; Gopalakrishnan is a Fellow at NITI Aayog. Views expressed are personal

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