Technical Analysis

Can the Indian government ‘shut down’?

Maulik Tewari | Updated on October 05, 2013 Published on October 05, 2013

Early this week, the government of the world’s largest economy was forced to shut down for the first time in seventeen years. Following the disagreement between US lawmakers – the Democrats and the Republicans – the US Congress failed to pass the federal budget before the September 30 deadline. With the budget for the 2013-14 financial year (beginning October 1) not approved, the government was forced to shut down partially. Can a situation like this ever happen in India? No, thanks to the parliamentary system of Government that is followed here.

The US, on the other hand, follows a presidential form of government. Under this system, the government (executive) headed by the President is separate from the Congress (legislature).

The government has to get the federal budget approved by Congress, which is the law-making body. This requires that the budget be passed by both the Houses of Congress before it is sent to the President for his signature. Currently, neither of the two parties in the US holds a majority in both Houses. While the House of Representatives is led by the Republicans, it is the Democrats (also the party of the incumbent President) who have a majority in the Senate. With the two Houses led by their respective parties not budging from their positions, the Congress failed to pass the budget.

It’s different here

In India too, the Union Budget requires Parliamentary approval. The Government here is accountable to the Parliament and therefore the Budget – an estimate of revenue collection and expenditure - has to be authorised by the Parliament. In India, the executive (government) and the legislature (Parliament) are not completely separate.

It is the party (or a coalition of parties) which has a majority (in the Lok Sabha) that forms the Union Government, headed by the Prime Minister. Given that the Lok Sabha enjoys greater powers viz-a-viz the Rajya Sabha, in financial matters, the Government is assured of the approval of the Budget. Whether or not the Government has the requisite numbers in the Rajya Sabha does not impinge upon the passage of the Budget.

Once the Budget has been passed by the Lok Sabha, the approval of the Rajya Sabha is sought. While the Rajya Sabha can suggest changes, it is up to the Lok Sabha to accept or reject them.

Since the Indian Government can always be sure about the passage of the Budget in the Parliament, Indian citizens need not fear a shutdown of the sort dominating headlines these days.

> maulik.tewari@thehindu.co.in

Published on October 05, 2013
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