Appendix D
Budget Analysis: DISHA's Experience11


India remains the world's largest democracy, whatever the shortcomings may be. Elections are important. Equally important is what happens between those elections. Budget development is one of the single most important of these events. Budgets control big resources, most of which are meant for the poor. By understanding and pro-actively influencing budgets, budget making, and the political economy behind it, DISHA, a representative organisation of unorganised tribal and forest workers, has opened a direction of making our democracy work, instead of complaining about it. In Gujarat, India, DISHA has re-claimed the budget from the political parties and administrators for the citizens who are mostly poor.

For the past three years DISHA has thoroughly reviewed the state budget on the same evening that it is presented in the assembly, across sectors, schemes, departments, past allocations and current demands, in DISHA's small but fully informed computerised budget unit. The findings are first shared with all the elected members of the assembly the day before each demand comes up for debate. Later findings are shared with the press and public at large. Such budget briefs, reviews, news flashes, leaflets, and other documents are disseminated among the decision makers as well as the general public, mostly poor, by combining the ideas in the said documents with the direct or collective action of organising the poor.

What is the impact? The nature and extent of debate on budget demands has improved in favour of the poor. The monopoly of budget-making caused carelessness. Now, numerical mistakes in the budget document have been reduced. The methods of making a budget are de-mystified; there is a sense among citizens and NGOs that "this is our budget and we have a say in it"; local demands are pressed before, during, and after the budget is debated; and collective actions and policy-influencing in favour of the poor is more concrete, measurable, focused, well-argued with numbers, and "actionable". The budget is reclaimed to the public domain beyond the budget session.

Budget analysis holds government, elected and appointed officials, accountable to the stated policies and party manifestoes in between the two elections. DISHA's experience shows that budget analysis: has immediate and measurable impact on the lives of the people, the poor; starts changing the power relations between the different sections of democracy (and the economy); and concretely creates a long-term vision for a pro-poor society. Public money allocated for the poor is too precious to be left to the government.

Experience in Brief

Over the past four years in general and two years in particular, DISHA has started classifying, analysing and disseminating State budget-related information. This included:

  • acquiring budget documents;
  • understanding them;
  • reviewing total and departmental allocations;
  • programme-wise expenditures;
  • beneficiary-wise average cost or allocation;
  • the differences between the actual spending and proposed allocations; and
  • the preparations, presentation, and debate on budget.

The exercise not only helped in understanding the budget, but also the apparatus of the government in concrete terms. The exercise was also intended to measure, in money terms, how serious the government is in its stated intentions to remove poverty.

There was also an intention to break the myth of special intellectual powers needed to analyse the budget. How to demystify the budgeting exercise for the NGOs, the mass, the political party, workers, and the poor people's institutions? That was one of the main stated objectives of DISHA in initiating the exercise.

A possibility was seen, and is now being realised, to pass on the newly gained skills and experience of budget analysis to at least one NGO in each State [in India] in order for them to analyse their respective State budgets.

How is budget analysis set into the objectives of DISHA? DISHA defines development as that which changes the power relationships in a society in favour of the poor. Budget analysis does that. Budget analysis helps the poor gain access to the power of public ideas that lead to the power to influence the allocation of public resources intended for development. To DISHA development is that activity which influences the allocation of resources in favour of the poor. The budget analysis activity does this directly in a measurable and ongoing way.

The following is a brief account of DISHA's experience with the process of:

  1. Learning budget analysis;
  2. Making the pool of information public; and,
  3. Influencing the political and non-political climate as well as the decision makers in Gujarat

DISHA has been trying since 1992 to get involved in studying the state budget but could not do so because it was not able to get the budget publication of all the departments of Government of Gujarat. The documents remained inaccessible to its real owners, the public, and its real beneficiary, the poor.

During 1993 DISHA received the budgets of all the departments after much struggle with the political and administrative wings of Government of Gujarat. It was the first experience of analysing the budget. Thinking on the formal analysis, the classification of expenditure by major and minor heads, getting acquainted with the budget figures, the study of the new allocation items, and visualizing a development scenario through the budget allocations were prime concerns in reviewing the data received. However, within three months DISHA was able to classify the data of major departments of the state and feed it into a computerised system.

The exercise of budget analysis was felt by DISHA to be highly cumbersome since it was totally new and it required patiently sitting and studying the data, its interpretation, collection of other relevant information to be coordinated with it, and building an argument in favour of the poor.

For the first time, as a starting point, DISHA studied the State budget of Gujarat with the focus on:

  1. Income and expenditure, and
  2. Allocation of funds made by various departments on various schemes and programmes affecting the tribals and other poor sections of the State.

The two items were selected because they were thought to be both relatively easy to start with and useful to DISHA in its immediate work related to the forest department.

Every department of the State spends money in tribal areas. But tribal areas remain backward, the tribals remain poor. So DISHA was forced to study the allocations of all the departments and make comparisons between the expenditures in tribal and non-tribal areas. This gave DISHA an opportunity to get to know the whole expenditure pattern of the State on various:

  1. Projects,
  2. Schemes,
  3. Payments of interest, and
  4. Development and non-development expenditures as a whole.

If above was the vocabulary for budgeting, the grammar for budgeting was learned by studying in detail:

  1. The process of preparation of the state budget and definitions of various terms used in the budget, and
  2. Figures of allocations and their implications on various schemes meant for poor people of the state.

But budgeting is boring, and more so for the politicians. The questions remained of how to give budget analysis a political meaning without taking sides with any party and whether or not the budget promises of the Finance Minister are reflected in actual allocation of funds in the budget. DISHA prepared a note on this point and circulated it to all Members of Legislative Assembly (MLAs) before the debate. MLAs used it in their introductory remarks on discussion on the budget speech of the Finance Minister and subsequently during the general discussion on the budget. The note was carefully crafted to attract interest from the ruling and opposition parties.

Leaders of the Opposition each time conveyed interest in meeting DISHA before the budget session. The purpose was to get a handle on the budget information.

However, this created a dilemma:

  1. Whether to provide the budget analysis information to the MLAs only or to the other people who are concerned with the development of the state?
  2. Whether to distribute the budget analysis write-up to the members of all parties, or to the opposition party?
  3. Whether to put only facts in the write-up or also the interpretation of the facts and figures?

It was decided after consultations with the DISHA team and others:

  • to distribute budget analysis write-ups to all the MLAs, the press, as well as some leading citizens taking interest in the development of the State;
  • to give any specific information to any particular party or interest group; and
  • to stick to the facts and not interpret the factual information or provide questions to be raised in the Assembly to the political parties.

The subsequent feedback by a number of MLAs confirmed that these decisions were correct. It established credibility, built wider support across party lines, and sustained interest.

The first piece (of June, 1994) on the demands of the general administration department provided:

  1. General information about the department,
  2. The amounts demanded under various heads for approval,
  3. How the allocations for spending were made by the department,
  4. The percentage of increase or decrease on a particular head over the last four years,
  5. The excess committed in actual expenditure over the revised estimates of previous years,
  6. Examples of gross financial indiscipline,
  7. The calculation errors found in the totals under various heads,
  8. The demand for new items coming for the first time, and so on.

The note was received with much enthusiasm, and used widely in budget discussion. The ruling party was disturbed and called up DISHA. The administration decided to ignore the whole event. But this was not possible any more as DISHA had publicized the series.

Who should do Budget Analysis and Policy Priorities?

  • The budgeting agencies of the Government of Gujarat themselves must, ideally, invite citizen groups, to do budget analysis and priority setting. but they do not do it. Sometimes they invite individuals or business guilds or labour leaders. This is not enough.

  • Most of budgeting work inside the government involves doing additions and divisions, making logistics-related arrangements, and solving problems. Most of the work related to the budget that the elected leaders do is fragmented, partisan, on individual cases, and at times, in private interest or for private profits. So elected members or appointed administrators alone should not do it.

  • Most of those now involved, and those who should be involved in budgeting, do not know "numbers" or "finance". Therefore, they can not change them. Those who want to change these numbers in public finance should do the analysis.

  • An exercise such as budget analysis does not make the budget, does not give an alternative process or product, or final solutions or numbers, though it may do so from time-to-time. What it does is give signals for change. That is the strength of budget analysis and policy priority. Thus, those interested in signaling change should do that.

  • Also, such signals are not a wild flash in the woods. The signals are not academic. The signals are not emotional or partisan. The signals coming out of such an exercise are "actionable". Some specified agency can act on the signals before the next budget. Those who want government agencies to act, do something, perform, should do budget analysis.

  • The results of such an exercise are not opinion polls that are done on the eve of budget mostly for public fun and education. The results that come out of budget analysis are from the known and accepted methods of budgeting. Those interested in convincing the government in the government's own language should do such analysis.

  • Budget analysis should be seen as public feed back to the government and the parties in and out of power. Such an exercise is free from a profit motive and party affiliations. Those interested in influencing a party to gain or leave power should do this.

  • Now there is new emphasis on finance, budget, cost effectiveness, and such activities for liberalising the economy. Then why should it remain a domain of small groups of accountants or financial analysts or MBAs? Why don't others do it? Those interested in de-mystifying money matters should do budget analysis.

  • The budget analysis exercise changes the focus from budget provision or allocation to priority and outcome. Why the allocation is as it is, what it does, how, and to whom? Those interested in the political economy of public resource allocation in favour of the poor should do budget analysis.

  • Such services of budget analysis can provide a Track Record or Performance Record of the Government in power, of the respective ministers or boards. The information given is measurable, in a known form, and "actionable". There is also a possibility of conducting:
  • Such services of budget analysis can provide a Track Record or Performance Record of the Government in power, of the respective ministers or boards. The information given is measurable, in a known form, and "actionable". There is also a possibility of conducting:
    1. comparative analysis with other states, with central budgets or with local Governments which helps alliances of groups such as labour or tribals who have no geographical boundaries; and
    2. chronological analysis, that is, how, over a period, the government is treating a certain area or community.

  • Budget analysis gives voice to citizens, a voice that is clear, reasoned, in the same language as that of the State, quantitative, and in the form of an argument. Such a voice is difficult to ignore. Those who want such a voice to be heard should do budget analysis.

  • Parallel budgeting causes competition or shame, when not ignored, by those who make the budget in the government. Such shame or competition is more likely to improve the quality of budget-making. Those interested in such improvements in the quality of the budget should do budget analysis.

There is an argument in favour of restricting budget analysis, when outside the government, to economic and public finance institutions and university departments. Except for a selected few, none of the institutions are taken seriously by the administration or politicians. The research agendas of such institutions, except some, are mostly guided by research funding, current debate, new theories, or individual ambitions. Even most of the very good work of such institutions is not disseminated or used. Some thought must be given to how to balance the investments of efforts and resources into making budget analysis that is good and can be better or budget analysis that is used and more accurate.

Interpretation and Use of Data

How to interpret raw data, or the analysed data, has been one of the main concerns for DISHA. The concern was resolved by DISHA keeping in mind the following guidelines which are useful for future work for any NGO doing budget analysis.

  • Use judgement in the interpretation of data based on experience, subject studies, or new learning;
  • test the hypothesis through analysis of data;
  • bring in people from many disciplines, make teams to review it;
  • review current and possibly new or innovative uses of data or findings such as articles, news, views, or factsheets;
  • think of direct action, follow up collective or legal action, and analyse or interpret data that can lead to or support such action;
  • use skilled analysis to focus on unusual patterns or trends over time, sectors, or constituencies;
  • conduct "brainstorming" sessions to generate new ideas for ways of looking at findings; and
  • identify and use established (but acceptable to your concerns) standards of comparison from other states or countries.

Use of Findings

A fair amount of time and multi-level exercise was done by DISHA to decide how to use the findings of the budget analysis work. Based on that and other experience some guidelines can be recommended.

  • Be clear on your strategy. That is, is it to inform, shock, or convince the legislators, public, media, or administration that you are analysing the budget?
  • Do not assume instant impact. Be ready to be ignored or side-tracked. Budget-makers are mostly good at ignoring and side-tracking public feedback. That is how they mostly manage the elected representatives and would manage NGOs or citizens' groups.
  • Be clear on the form of use of the findings: press release, booklet, memo to ministers, briefing to the MLA, datasheets to experts, and so on. Even TV ads or newspaper ads can be planted if resources permit. There is also a possibility of providing service to users.
  • Holding public hearings -- for a selectively invited group or for popular participation -- on the findings. This can be done sector-wise, constituency-wise, interest-group wise, or as a general public consultation.
  • Legal action from an interest group is possible based on the findings of the budget analysis. It is also possible to make effective, quantitative, and well-argued representations to Joint Committees, Public Accounts Committees, or other constitutional bodies, with the findings.
  • Over a period of time, a joint group or issue-based alliance can be made.

How to Share Findings

One of the ways to disseminate data generated from the analysis, often during the budget session, is by supporting ongoing publication of the data in reference to other issues that the analysing organisation is involved in. The examples of such work by DISHA include:

  1. "Budget: An Introduction" was published by DISHA in October 1994, just in time before the budget exercise starts in the state machinery. The publication introduced the common reader to:
  • budget heads;
  • budget time-tables;
  • budget preparations;
  • budget presentation discussion;
  • estimates & allocation;
  • Estimates Committee; and
  • Public Accounts Committee.

This is a useful, hands-on, and step-by-step publication of how to get a handle on budget. Similar manuals, guidelines, and information sheets can be made available as an introduction to sharing the findings of budget analysis.

  1. During 1994-1995 and 1995-1996 budget sessions, DISHA took brief, to-the-point, factual, and strategic notes. The notes were on the 1995-1996 budget presented in the Assembly for discussion. The notes were a part of mass education of voters on the budget. More importantly, they provided a useful tool to the opposition, and even the ruling MLAs, to participate in the discussion. To review the budget, analyse data, group the issues, enlist priorities, and strategize on the highlights a day before the actual slated discussion in the form of a printed brief is no small achievement of DISHA. It included briefs on the demands of 22 different departments. Such budget briefs are another way of sharing the findings.

  2. Dissemination of the information gained and findings arrived at from the analysis is not restricted to the educated urban class, but has been disseminated to the public at large through newspapers and magazines and also through brochures and one-page fact sheets written in readable Gujarati and circulated to the tribal area schools and villages where DISHA works in Gujarat. In the factsheets, comparison with the stated objectives of the Party Manifesto and the actual allocation is highlighted. The purpose is to build pressure on the local elected representative. The factsheets included one on regional disparities between the tribal eastern hilly belt and the rest of the state, and shortcomings of the Tribal Sub-Plan. A very specific document such as these factsheets is one more way of sharing the findings.

  3. "Forestry: Addition of Industry & Substraction of People" was published in August 1995 by DISHA to highlight its findings on the forestry department's budget. This is an example of the use of data or information gained from budget analysis to support or modify or influence forestry policy of Gujarat.

  4. "JRY: Hollow Claims" was published in June 1995 by DISHA. It is a good example of taking up analysis of one of the most important rural development schemes of the budget where the Centre and State both are committed to reach a large number of rural beneficiaries who are also voters. The document evaluates the findings in the light of the data of budget, actual allocations, total workdays generated, unspent amounts, disproportionately high cost of administration and salary, and per household average income which is incidentally less than one Rupee per day. Analysing schemes that reach a large number of populations directly is another good way to use findings.

  5. "Welfare of Poor in the Maze of Numbers" was published in March 1995 which is an example of departmental in-depth analysis of Gujarat's Social Welfare and Tribal Development Department's budget as part of the total budget. Here, going beyond the allocations, per-head increase in the salary of the staff, priorities, performance of various welfare boards and corporations, and allocation priorities are evaluated. Sharing findings with the disadvantaged groups about the department that deals with their welfare is another effective way of using data.

  6. Data generated by the budget analysis is a useful and effective tool to make Charters of Demands submitted through collective action more "well argued" and "actionable". "This is injustice, and nothing but injustice" was published as a charter of demands at a rally of an estimated 10,000 tribals on Gandhi Jayanti Day and was submitted to the Collector in Panch Mahals. Aided with maps and graphs, the Charter makes an effective demand for increase in Tribal Sub-Plan allocations on access to natural resources: land, water, and forest by tribals.

  7. Once these budget analysis documents are out, they can always be updated and be supported by a sequel, a follow-up new publication, or Part II of the saga. "Injustice to Tribal area Continues in New Budget" which was published after the 1994-1995 budget, mainly criticised, again, the Tribal Sub-Plan and the other related allocations. Such a document established a Track Record of the government.

  8. While ownership and access to land by tribals continues to be discussed among the research circles, DISHA published a water sector analysis of the budget with focus on tribals. The budget data, local field knowledge, and insights from the organising work by DISHA created this excellent document that argues with facts and numbers that over the years, in successive budgets and policies, ignored tribals' access to and ownership of water. In the end it also enlists the possible 14 steps, somewhat beyond the analysed data, for policy makers and advocates of tribals' rights to act on.

  9. Education, a gateway out of poverty, remains a day-dream in tribal areas which was well documented as a policy influencing tool by DISHA by publishing "Injustice Done by the Government in Education to the Eastern Tribal Belt". Such between-the-budget documents keep the interest of the public and the administration's caution alive.

The above are some of the very effective ways of sharing analysed data. There are other possibilities: advertisements in the newspaper, and audio-visual announcements, public meetings in education and academic institutions, and inter-state lecture visits. Regional seminars to share the findings with NGOs or making basic data available to research groups are additional methods of sharing the data.

Comparative Budget Analysis

While the analysis itself is adequate to achieve immediate gains, budgets can also be analysed in comparison. DISHA has done so, though in a limited, but strategic manner. A review of its efforts, and discussion with those who benefited, show the following useful comparisons:

  • over time to establish trends;
  • across sectors such as forestry or education;
  • across constituencies such as that of tribals or IRDP beneficiaries or designed regions such as coastal or hilly areas;
  • over agencies such as development compensations or boards;
  • by item or activity;
  • by urban or rural settlements; or,
  • by target & beneficiary groups.

In addition, it is also possible to compare the findings with sub-states, that is District to Taluka to Village-level budgets or budgets of Nagarpalikas. The main purpose for this could be to find the flow of funds or coordination of budgets.

11. The appendix contains excerpts from the paper "Budget Analysis and Policy Priority: DISHA's Experience," Mihar R. Bhatt, Foundation for Public Interest, 25, Vasundhara Colony, Gulbai Tekra, Ahmedabad 380 006, India; tel: (91 79) 656 8421, fax: (91 79) 642 0056. The full document is available upon requres from DISHA of the Foundation for Public Interes