I had almost forgotten, till I saw a copy at a friend’s office yesterday, that every year in Parliament’s budget session, apart from presenting the annual budget, the Government of India tables an outcomes budget where every ministry reports on its outcomes. Remiss as I was in forgetting, I can’t be blamed, entirely. The outcomes budget was launched amidst much talk of reform in 2005 by then finance minister P Chidambaram. In a promising budget speech, he said ‘I must caution that outlays do not necessarily result in outcomes’. ‘The people of this country,’ he went on to add, ‘are concerned with outcomes’. And to his credit he launched the outcomes budget. In its short five year existence, the budget has been nothing but a damp squib. So valued is the outcomes budget that it never makes even the inside pages of newspapers and if you want to look for them on line – well best of luck to you.
What went wrong? Well, like many things in government, the idea is a good one but its implementation nothing short of poor. There are two critical elements to a successful ‘outcomes budget’. First, it requires the identification of clear, concise and quantifiable outcome indicators. These indicators need to be tangible and realistic. Here the outcomes budget falls short. Indicators are vague – the health ministry describes ‘funding of institutions’ and ‘widening of surveillance mechanisms’ as some of its key outcomes- making measurement impossible and irrelevant.
Second, for an ‘outcomes budget’ to achieve results it must be accompanied by increased information on performance against these indicators. The Finance Minister emphasized this at the launch of the outcomes budget, by pointing out that the objective of the budget is to put critical data on expected outcomes in to the public domain and allow for public scrutiny. On this count too, the outcomes budget has fallen far short of expectations. The budget itself was launched with much media fanfare but over the years it has simply disappeared from the public radar. There is no evidence of any proactive effort by government agencies to generate and disseminate information on progress.
In today’s Mint, Sanjiv Misra, former member of the 13th Finance Commission made some interesting observations about the failure of the outcomes budget. He points out that for reforms like the Outcomes Budget to be successful it requires the “establishment of countrywide performance benchmarks and costing norms for the public goods and services supplied; development of measurable performance indicators for the objectives set out; development of performance monitoring systems to regularly collect data on the actual results achieved; independent third-party evaluation of major programmes; and use of performance contracts to enforce accountability of key actors.” He so argues for the need to link performance on outcomes budgeting with pay.
The interesting thing about India today is that we have all these design instruments in place and we speak the right ‘speak’. Everyone in Government from the highest to the lowest agree that outcomes matter. Everyone in Government from the highest to the lowest agree that these need to be monitored and that he failure to do just this is the cause of our persistent poor performance on human development. Everyone in Government from the highest to the lowest has some interesting ideas on how to address this problem. As we speak the cabinet secretariat is running a seminar on performance oriented monitoring in the civil services. In fact the performance management wing of the cabinet secretariat has signed a significant number of contracts with Government of India departments to performance criterion and goals and there are some whispers about introducing pay for performance measures. At the same time the planning commission seems to be moving towards setting up the Independent Evaluation Office and a few months ago, PMO set up a delivery monitoring unit. There is also much talk of using technology through the UID and other instruments to develop a transparent expenditure information network that will allow for transparency and regular tracking of government funds. All of which have the potential to address the problems reforms like the outcomes budget faces. But for these instruments to take effect, we need political will – and that as we all know is sadly missing. What we need now is not more instruments but a better understanding of how to circumvent this lack of political will and push for change.
Yamini Aiyar is the Director, Accountability Initiative.