Some of the important figures in Union Budget for 2019-20 would seem a little too ambitious if one takes a close look at two sets of budgetary figures available at present for Union Government’s finances for the year 2018-19, which ended on 31st of March this year.
These two are different types of figures for the financial year 2018-19 available from two different sources, viz. Revised Estimates (RE) for 2018-19 provided in the Union Budget documents (both the Interim Budget and the Main Budget documents provide the RE figures for the last fiscal, which of course are the same) and the provisional actuals (i.e. unaudited actuals) for 2018-19 provided by the office of Controller General of Accounts (CGA) of the Union Ministry of Finance.
The Interim Budget and now the main Union Budget for 2019-20 have put the RE for Centre’s Net Tax Revenue in 2018-19 at Rs. 14.84 lakh crore, but CGA’s provisional actuals for the same for 2018-19 is 11 per cent lower at Rs. 13.17 lakh crore.
This shortfall is bound to have affected the government’s expenditure commitments as well. Compared to the RE figure for total Union Government expenditure (on all sectors) in 2018-19 at Rs. 24.57 lakh crore, CGA’s provisional actuals puts this figure for 2018-19 at Rs. 23.11 lakh crore.
CGA does not publish the disaggregation of the overall provisional actuals, for which we will have to wait for the audited actuals of 2018-19 to be presented next year in Union Budget 2020-21. Nonetheless, the limited details provided by the CGA indicate that the impact of this shortfall in actual expenditure in 2018-19 is most likely to have been on the expenditure towards Food Subsidy (i.e. implementation of the National Food Security Act).
The RE for Food Subsidy by the Union Government in 2018-19 stands at Rs. 1.71 lakh crore, significantly higher than the actual expenditure on the same in 2017-18 (Rs. 1.003 lakh crore); but the CGA’s provisional actuals for Food Subsidy in 2018-19, at Rs. 1.02 lakh crore, is 40 per cent short of the RE figure for the last fiscal.
The Budget Estimates (BE) for Centre’s Net Tax Revenue in 2019-20 was projected at Rs. 1.70 lakh crore in the Interim Budget in February this year; the BE for the current fiscal for this figure has been brought down to Rs. 1.65 lakh crore in the main Budget now. But the experience of 2018-19 would suggest that even this slightly reduced projection for the Net Tax Revenue of the Centre could also be too optimistic. A shortfall in tax revenue collection in the current fiscal would consequently impact the government’s expenditure commitments for 2019-20.
This apprehension seems to have deterred the Finance Ministry from increasing the projected level of total Union Government expenditure in 2019-20 beyond what was already projected in the Interim Budget in February. The total Union Government spending as per the main Budget for 2019-20 is pegged at Rs. 27.86 lakh crore, which is only marginally higher than the Rs. 27.84 lakh crore projected in the Interim Budget. But the aggregate expenditure figure conceals a small reprioritization that has been carried out with the main Budget, over the Interim Budget, for 2019-20.
The main Budget for 2019-20 has provided slightly higher magnitudes of allocations, compared to those provided in the Interim Budget for this year, for a number of social sectors, e.g. Agriculture and Allied Activities (Rs. 1.51 lakh crore, with an increase of nearly Rs. 1500 crore), Rural Development (Rs. 1.4 lakh crore, with a rise of Rs. 1700 crore), Education (Rs. 94854 crore, with an increase of around Rs. 1000 crore), Health (Rs. 64999 crore, with an increase of roughly Rs. 1500 crore), and Social Welfare (Rs. 50850 crore, up by Rs. 1500 crore roughly).
These small increases in allocations across a range of sectors, however, seem to have come at the cost of a reduction in the total quantum of Finance Commission recommended Grants to States and UTs, which shows a decline from Rs. 1.32 lakh crore in the Interim Budget for 2019-20 to Rs. 1.20 lakh crore in the main Budget for 2019-20.
This could be the precursor to a debate that could unfold with the recommendations of the 15th Finance Commission (expected by end of October this year), in case the Centre-State resource sharing arrangements of the 14th FC are changed in favour of boosting Centre’s fiscal space at the cost of a reduction in the proportion of untied funds within total funds transferred to States.
A bigger concern pertaining to fiscal federalism in the country lies on the taxation side of the Union Budget. The divisible pool of central taxes, i.e. the kitty from which 42 per cent is being devolved to States every year during the 14th FC period (2015-16 to 2019-20), is calculated by deducting or excluding from the Gross Central Taxes – (i) proceeds from all kinds of cess and surcharge, (ii) taxes collected from UTs, and (iii) an amount equivalent to cost of tax collection by the Centre.
With a visible increase in the overall quantum of funds mobilized from cesses and surcharges levied on central taxes, the share of Centre’s Net Tax Revenue in the Gross Central Taxes has gone up from 64.7 per cent in 2017-18 to 67 per cent in the BE for 2019-20, a development that many State Governments would not appreciate much. The tension in the country’s fiscal federalism could get escalated further with the 15th FC’s recommendations if it introduces a major deviation from the 14th FC set up.
Recent mayhem in West Bengal’s public hospitals, as doctors were on strike for eight days, reflects the larger implosion of the health system of the state.
The incidents that led to the strike are not new in West Bengal or other states of India. Accusing and beating doctors for a mishap during treatment has been common. In this backdrop, it is not unnatural for doctors to demand a sound security system. While politicians squabbled with doctors, the brunt of the whole episode was borne by common citizens whose lives were put at risk in the absence of a functional public health system.
But what are the root causes of the problem and the systemic errors that exist in the health sector? What are the issues that cause this kind of systemic dysfunctionality?
The health sector has been going through a transformative process of becoming a for-profit private sector in India for quite some time now. Public expenditure on health is abysmally low. It made up around 1.4% of the GDP in India in 2017-18, a figure which is much lower than in neighbouring countries like China (3%) and Sri Lanka (2%).
The condition of West Bengal is not different from the country as a whole. One can see in the figure below that although per capita expenditure on health has increased marginally from around Rs 552 in 2014-15 to Rs 643 in 2019-20 (BE) in 2012 prices, the rate of change in expenditure on health has fallen from 16% in 2015-16 to 0.4% in 2018-19 (RE). It even became negative thereafter in West Bengal.
Per Capita Public Expenditure on Health in West Bengal from 2014-15 to 2019-20, in 2012 prices.
Source: Budget Documents, government of West Bengal, various years.
While the state budget increased by 76% in the same period, the health budget increased only by 53% in the state.
Thus, it naturally follows that the state of public health infrastructure has remained very poor in West Bengal. Health centres all over the state are short of resources, especially human resources as no much effort has been put into building the health workforce’s capacities.
Extent of increase in the total state Budget and state health Budget in West Bengal from 2014-15 to 2019-20. Source: Budget Documents, government of West Bengal, various years.
The condition of health infrastructure is even worse in rural areas, even though almost 70% of the state’s population belongs to those areas. Nearly 12,310 sub centres in West Bengal are currently running on a shortfall. As many as 1,870 sub centres have been functioning out of rented buildings. There is need of as many as 349 surgeons, 320 paediatrician and 297 gynaecologists at community health centres in Bengal.
Doctor and bed population ratios were 1:10411 and 1:1170 respectively in West Bengal, according to 2018 government data.
Quite obviously, doctors are overburdened at public hospitals. In addition, they are not provided with modern equipment for facilitating services, and the security system is demonstrably not good enough to protect them from public outrage if anything goes wrong.
When one looks into the matter from a common person’s perspective, it is not hard to understand the hassles an individual goes through while seeking treatment from public healthcare facilities. Long waiting time and poor quality of services (due to infrastructural bottlenecks and human resource shortages) are very common at public hospitals. Additionally, the introduction of user fees at public hospitals has worsened the situation.
The Central government, meanwhile, emphasises the involvement of private providers to bridge the gaps that exist in the health sector. To that end, the public private partnership mode is thought to be a step towards ensuring universal coverage.
Most of states have outsourced several services to the private sector. West Bengal has outsourced secondary and tertiary care, diagnostics, dialysis of patients, ambulance, catering and laundry services to private partners.
These private partners, it has been argued, charge higher prices for rendering services. Therefore, healthcare no longer remains a publicly provided good. It becomes like any other commodity sold in the market and can be consumed only if the buyer has the willingness and ability to pay for it.
It is not even as if with the commodification of healthcare, the quality of services has improved much. In the absence of a grievance redressal mechanism at hospitals, the poor often feel unheard.
Here, the West Bengal government has neglected spending on monitoring and evaluation.
Therefore, there is no mechanism to hold public health management or private partners accountable. This also means that the democratic processes that could have enhanced accountability in the system are by and large neglected by public as well as private management in health care. The obvious outcome is that people take the law into their own hands to ensure justice.
In the present outbreak, both the parties can be considered victims of systemic loopholes. While doctors and patients must stand in solidarity against a system which has done them wrong, the state must also introspect and reverse the mistakes made in the past to restore social, physical and mental well-being of its citizens.
On May 31, the Dr. Kasturirangan Committee submitted the draft New Education Policy (NEP) 2019 to the Ministry of Human Resource Development (MHRD). The policy has immense significance as it comes after a gap of nearly 30 years (last National Education Policy was in 1986, modified in 1992).
The NEP is founded on the pillars of access, equity, quality, affordability and accountability. The document is a ‘single organic continuum from pre-school to higher education’.
For translating the proposals into practice, the policy has a whole section on financing of the education sector. The section has critical evaluation of the financing scenario, and existing issues and challenges the education sector is facing. The discussion also indicates alternative avenues for generating additional resources for the sector with roadmaps for their optimal use for a larger impact.
The policy suggestions on financing follows from two key principles — first, financing for education is not ‘expenditure’ but an investment for the future of India’s children; and second, education is a ‘not-for-profit activity and enterprise in society’. This approach towards education is laudable, especially in the current neoliberal setting.
The policy has acknowledged the need for higher investment in education and rightly envisioned that to reap maximum benefits from this investment; financing should be largely from public sources. It has identified the inefficiencies in financing being generated from deficiencies in decentralised planning, bottlenecks in budgetary processes in the forms of delayed fund flows, and systemic weaknesses primarily due to shortage of human resources.
However, as the policy is going to direct the education sector in the coming years and has a direct impact on almost 50% of India’s population, the following are some suggestions for a concrete revised document.
Need a Shift in Milestone from Share of Total Govt Expenditure to GDP
For the last five years, public spending on education has hovered around 3% of country’s GDP, which is way behind the 6% norm stated in all previous national policies on education. The draft NEP 2019 also reaffirms this benchmark as the minimum required public investment for education.
To attain this additional 3% share of GDP, the committee recommended doubling of expenditure on education from the current level of 10% to 20% of all public (Centre and state) expenditure, over a 10-year period.
The committee has made this recommendation anticipating two developments in the economy — a rapid pace of economic growth and an increase in tax-GDP ratio, resulting in enhanced resource envelop of the government, and thus, the education sector.
Unfortunately, there is no automatic assurance that higher economic growth or an increased tax-GDP ratio would induce higher spending on education, even if these result in higher government spending. Nonetheless, even in the proposed scenario, with an incremental education budget by 1% of total government expenditure per year, doubling the share of education budget in total budget of the country in 10-year period is not possible without compromising spending on other sectors.
This zero-sum exercise is not a realistic ethical approach, especially when many other sectors are also faced with similar challenges of providing services with existing level of resources.
Moreover, a contrary situation may also occur. What would happen to spending on education if overall public investment shrinks? Thus, it would be encouraged to set the milestones of the public investment for overall education as well as the components in need of higher investment in terms of GDP instead of share of total government expenditure.
Need a Detailed Discussion on Fiscal Federal Structure
Any discussion on public financing is incomplete without a discussion on the country’s fiscal federal structure. Though financing of education is a joint responsibly of both the Centre and state governments, the Centre’s budgetary spending on education accounts for a smaller share as compared to states in the country’s total budgetary spending on education.
After the 14th Finance Commission (FC) recommendations, along with a larger devolution of untied resources from Centre to states, the burden of education financing has shifted more towards states. In 2015, the sub-group of chief ministers on rationalisation of centrally sponsored schemes had recommended that the Centre’s allocation share for salary and remuneration would not change further and any upward revision of remuneration or additional hiring would be made only with the states own resources.
The proposed series of suggestions in the NEP, like the extension of RTE Act, 2009 to all children between the ages of three and 18, expansion of mid-day meal etc. would need more human resources.
There is a high possibility that in the new policy regime, states would not agree to bear the additional cost of salaries. In that case, what would be the cost-sharing for recruiting human resources? Would the same resource sharing pattern be followed? Unfortunately, the draft policy does not deal with any of these fundamental questions.
On the whole, the discussion on Centre-state resource sharing for education is very limited in the policy document. The draft needs to flesh out the Centre-state resource sharing strategies at the earliest.
Alternative Sources of Funding: Need Strategic Implementation
To supplement government spending on education, the draft NEP has suggested alternative avenues of investment through Corporate Social Responsibility (CSR) efforts both by public sector undertakings (PSU), private companies and philanthropic initiatives by individual, corporations and communities.
It is true that CSR in India has witnessed a surge in education spending over the last five years. However, given the scale of requirement, the current fund allocation in education through CSR is miniscule.
Besides, suggestion of resource generation also through CSR contribution by PSUs at current scenario is truly a disconnect between the policy intention and policy practice. A large number of PSUs (especially in states) are either getting closed or privatised because of their apparent financial and operational inefficiencies.
The policy identified the need for providing tax incentives to encourage individual and companies for philanthropic activities. However, other than a mention, there is no concrete suggestion provided on this front. In the absence of a strategic roadmap, banking on PSUs, CSR activities or philanthropic funding would not bring the desired result.
After independence, a quasi-federal Constitution was adopted in India with centralizing tendencies; the Constitution provides for a division of responsibilities between the Union (or Centre) and States with regard to various areas of governance. There is a Union List, a State List and a Concurrent List enumerating the division of power to legislate on different subjects as well as the power of revenue collection and areas of public expenditure.
In terms of division of powers and responsibilities, the Union List mainly covers matters of national importance (such as defence, transportation, infrastructure, international trade and macroeconomic management etc.). As per the provisions made in the State List, States are given regional matters and issues considered to be more important at the State level (such as law and order, public health, housing, agriculture etc.). The Concurrent List includes a number of sectors (such as education, contracts, matters of bankruptcy and insolvency, employment and labour welfare, electricity etc.), each of which requires consensus between the Union and States.
Sanitation clearly falls within the State List. Water, “that is to say, water supplies, irrigation and canals, drainage and embankments, water storage and water power”, is also a part of the State List. However, “regulation and development of inter-State rivers and river valleys …” appears in the Union List.
Starting from the 1960s, the Union Government has also been carrying out programmatic interventions in a number of areas that fall either in the Concurrent List (e.g. education) or in the State List (e.g. public health and sanitation) in the interest of addressing issues that are of national importance.
While several State Governments and experts have been critical of this development, referring to it as over-centralization of policy and programming across sectors, the concerns of regional disparity in the country on the other hand seem to justify the Union Government’s approach. This debate continues to draw attention in India’s policy and public finance landscape till date. As far as provisioning of safe drinking water and sanitation facilities is concerned, the programmes / schemes launched by the Union Government (known as Central Schemes) have been the backbone of public service delivery in this sector in many of the relatively poorer States.
The division of roles and responsibilities between the Union Government and State Governments, given in the Constitution, has translated into a division of expenditure responsibilities and taxation powers between the two. However, there is a vertical imbalance between the powers of the States and that of the Union to raise revenue through taxes and duties in comparison to their respective expenditure requirements. The powers of revenue mobilization vested with the States are insufficient to help them mobilize enough resources to meet their total expenditure requirements. This kind of a vertical imbalance was built into the fiscal architecture of India keeping in mind the need for Union Government’s interventions to address the horizontal imbalance, i.e. the limited ability of some of the States to mobilize adequate resources from within their State economies compared to other States. In the fiscal architecture that has evolved in India, a significant amount of fiscal resources are transferred from the Union Government every year to State Governments so as to enable them to meet their expenditure requirements.
A Finance Commission is set up once every five years to recommend on sharing of fiscal resources between the Union and the States, a major part of which pertains to sharing of revenue collected in the Central Tax System. The total amount of revenue collected from all Central taxes – excluding the amount collected from Cesses, Surcharges and taxes of Union Territories, and an amount equivalent to the cost of collection of Central Taxes – is considered as the shareable / divisible pool of Central tax revenue. In the recommendation period of the 13th Finance Commission (2010-11 to 2014-15), 32 percent of the divisible pool of Central tax revenue used to be transferred to States every year, which was increased to 42 percent by the 14th FC (for 2015-16 to 2019-20).
Box 1: Debate Following the 14th FC Recommendations and
Restructuring of Centre-State Sharing of Resources for the Period 2015-16 to 2019-20
Following the report of the 14th FC and restructuring of the Union Budget, there has been an intense debate around two objectives or priorities, viz. the objective of increasing the autonomy of State Governments in setting the spending priorities in their budgets; and that of ensuring adequate budgetary resources for social sectors and development programmes for the vulnerable sections of the population (taking into account both Union Budget and State Budget outlays for these sectors).
While a major push has been given to the first objective, i.e. greater autonomy of State Governments in setting their spending priorities, in the recommendations of the 14th FC and the consequent restructuring of the Union Budget since 2015-16, apprehensions have been raised that the second objective may get compromised at least in some of the States with relatively poor fiscal health and lower levels economic development.
This is largely because of the limited ability of the poorer States to expand their fiscal space with own revenue collection and the fact that they also face more acute shortages of funds for other sectors such as general administration, law and order, and infrastructure. Hence, the competition for budgetary resources could be more intense in these States and the social sectors may not be given the priority for resources that are needed; this could aggravate the problem of regional disparity in the longer run. Although, we may note here that both of the above-mentioned objectives could be pursued together if the tax-GDP ratio of the country is stepped up visibly.
This increase in devolution to States has been accompanied by some reductions in the Union Government’s / Centre’s direct funding of several social sector programmes; State Governments are expected to compensate for the reductions in the Central share of funding in such programmes depending on their State-specific needs across sectors. This has emerged as one of the important issues in public financing of WATSAN services, especially in the relatively less developed States. Hence, it is pertinent to analyse whether the overall quantum of budgetary resources flowing into WATSAN sector (i.e. the resources provided for Central Schemes, with combined Central and State shares for such schemes, and those provided for State Government’s own schemes for the sector) has increased in the 14th FC period or not. Moreover, given the high degree of political priority given to sanitation with the Swachh Bharat Mission (SBM) since 2014, which is a Central Scheme for sanitation, it is also important to study the spending priorities for drinking water vis-à-vis those for sanitation in the most recent years.
Table 1 and Table 2, in the following, depict the trends in the sector-wise / Department-wise priorities in Bihar and Odisha’s State Budgets during the 14th FC years (i.e. 2015-16 onwards), respectively. In this analysis, only select Departments are covered, all of which are directly relevant for public provisioning for the poor and underprivileged sections of the population.
We find a significant increase (in absolute or nominal figures) in the overall magnitude of the State Budget of Bihar during the years 2015-16 to 2018-19. The volume of the Plan Budget or Scheme Budget of the State has also registered a similar expansion over the last four financial years (FYs). Among the eight selected Departments, all of which fall broadly under social sectors, Rural Development and Rural Works departments have witnessed noticeable increases in their respective shares in the overall Plan Budget / Scheme Budget of Bihar during the 14th FC years.
In the case of Odisha, we find a gradual increase (in absolute or nominal figures) in the overall magnitude of the State Budget of Odisha during the FY years 2015-16 to 2018-19. The volume of the Plan Budget or Scheme Budget of the State has also registered a healthy increase from 2014-15 to 2018-19. Among the seven selected Departments, all of which fall broadly under social sectors, none of the departments has witnessed any increase in the respective share in the overall Plan Budget / Scheme Budget of Odisha during the 14th FC years except for the Department of Panchayati Raj and Drinking Water. In fact, the share of the Women and Child Development Department has reduced significantly from 2014-15 to 2018-19.
Table 1: Department-wise Priorities in State Budgets of Bihar over the 14th FC Period
@ The figures for percentage shares of various Departments in the total Plan Budget / Scheme Budget of Bihar are provided every year in the State Budget documents only for the Budget Estimates (BE) for the ensuing financial year (FY). Such figures for the Revised Estimates for the ongoing FY or Actual Expenditures for the previous FY are not given in the State Budget documents.
#Until FY 2016-17, Bihar’s Total State Budget was presented along with a Plan vs. Non-Plan break up. This distinction was dropped by the Union Government and most States in FY 2017-18. However, starting with FY 2017-18, Bihar State Budget documents provide a similar break up, viz. Scheme ExpenditureVs. Establishment and Committed Expenditure. The erstwhile Plan Budget of Bihar broadly matches with the Scheme Expenditure / Scheme Budget, while the erstwhile Non-Plan Budget corresponds broadly to the Establishment and Committed Expenditure / Budget.
Source: Compiled from Budget Summary, State Budget of Bihar, various years.
The ones that provide budgetary resources for WATSAN programmes in rural areas in Bihar are Public Health Engineering Department (PHED) and Panchayati Raj Department (PRD). We find a steep decline in the budgetary priority (within the Plan / Scheme Budget of the State) for each of them in 2015-16 (i.e. the first FY in 14th FC’s recommendation period) compared to the year before; but we also notice a restoration of budgetary priority for these departments in FYs 2017-18 and 2018-19. In fact, in the State Budget for 2018-19, PHED has registered an increase in its share to 2.9 percent of the overall Scheme Budget from 2.5 percent in the year before.
Table 2: Department-wise Priorities in State Budgets of Odisha over the 14th FC Period
@ The figures for percentage shares of various Departments in the total Plan Budget / Scheme Budget of Bihar are provided every year in the State Budget documents only for the Budget Estimates (BE) for the ensuing financial year (FY). Such figures for the Revised Estimates for the ongoing FY or Actual Expenditures for the previous FY are not given in the State Budget documents.
#Until FY 2016-17, Odisha’s Total State Budget was presented along with a Plan vs. Non-Plan break up. This distinction was dropped by the Union Government and most States in FY 2017-18. However, starting with FY 2017-18, Odisha State Budget documents provide a similar break up, viz. Scheme ExpenditureVs. Establishment and Committed Expenditure. The erstwhile Plan Budget of Bihar broadly matches with the Scheme Expenditure / Scheme Budget, while the erstwhile Non-Plan Budget corresponds broadly to the Establishment and Committed Expenditure / Budget.
Source: Compiled from Budget at a Glance, State Budget of Odisha, various years.
The department that provides budgetary resources for WATSAN programmes in rural areas in Odisha is the Panchayati Raj and Drinking Water Department (PR &DW). We find a slight increase in the budgetary priority (within the Plan / Scheme Budget of the State) for it in 2017-18 (i.e. the third FY in 14th FC’s recommendation period) compared to the years before; although we also notice a very significant decline of budgetary priority for the department in FY 2016-17. This clearly shows that the States’s budgetary priority reduced for water and sanitation during that time time period most probably due to the increased budgets from the Union government.
In 1992, a major process of fiscal decentralization was initiated in the country, through the 73rd and 74th Constitution Amendment Acts, to empower Local Governments in terms of their revenue and spending capacity. After these amendments, State Governments evolved their own rules for devolving fiscal power to Local Governments and the extent of devolution was left to the States to decide according to local needs; as a result, it has varied widely across States.
As far as the role of rural Local Governments in WATSAN sector is concerned, it was noted earlier that the 14th FC has also provided a visibly higher quantum of grants (compared to the earlier FCs) for the GPs. Thus, the volume of funds flowing to GPs in Bihar and Odisha would certainly have gone up visibly during the 14th FC years. However, the role that GPs can play in public financing of WATSAN services also depends on the extent of devolution of functions, funds and functionaries to Panchayati Raj Institutions (PRIs) in the State.
As stated at the outset, State Governments and Local Governments (especially the GPs) are playing a more prominent role currently in public financing of the programmes delivering WATSAN services in rural areas in the country. Hence, it is important to examine the expenditure priorities for drinking water and sanitation in the State Budgets of Bihar and Odisha, and how the 14th FC funds are being spent at the level of GPs in the State in the most recent years.
The Plan Budget or Scheme Budget, to put it simply, is that part of a State Budget where the Government provides budgetary resources for ongoing / new projects for socio-economic development. The Non-Plan Budget mostly caters to the State Government’s establishment and committed expenditure across sectors. A part of Non-Plan expenditure too is meant for development purposes (e.g. expenditure on salaries of all regular / permanent government staff in school education, higher education, medical and public health, agriculture sector etc.); however, the State Government gets very little maneuverability or flexibility for reducing or increasing expenditures quickly in this part of the Budget. Hence, policy analysts as well as policymakers usually observe the spending priorities in the Plan Budget / Scheme Budget, which finances all kinds of ongoing / new projects for socio-economic development in the State.
What is open data? As defined by opendefition.org, “Open data and content can be freely used, modified, and shared by anyone for any purpose”. Open data has been talked about a lot in the recent years. Across the globe, demand for open data is increasing rapidly. Moreover when it comes to public finance, availability of data in open formats becomes all the more critical for strengthening the accountability ecosystem around government finances.
Growing demand for open data
In recent years, there has been a visible increase in the demand for availability of Open Government Data (OGD) in public domain. Owing to democratic pressure, many governments around the world are trying hard to meet citizens’ requirement in this sphere. In a survey based on 1000 respondents (100 respondents each from 10 countries) on the usage of OGD, it was observed that:
Despite growing interest, currently, awareness on publishing reliable OGD to meet requirements of different stakeholders is low. In the same survey, 31% of the respondents had pointed out lack of availability of relevant data as one of the main barriers. Hence, it is very important to have a clear understanding of the demand of different stakeholders/users in order to provide relevant information in public domain or to create accessible and useful open data portals. A recent report clearly lists down six steps involved in assessing and segmenting open data demand:
When it comes to public finance and more specifically, government budgets, the task becomes even more difficult. To provide easy to comprehend budget information for different tiers of governments in a timely manner requires a lot of hard work. Various government Budget Portals have been created and are available in public domain with an aim to provide budget data in an open data format; but their success is still questionable.
Bridging the gap: Role of Civil Society Organisations in bringing government budgets closer to people
The Open Budget Survey (OBS) of 2017 released by the International Budget Partnership (IBP) indicates that 89 out of 115 surveyed countries fail to provide adequate government budget information in public domain. Not only this, the survey shows a modest decline in average global budget transparency scores, from 45 in 2015 to 43 in 2017.
Hence, it becomes even more important for Non-Government Organisations / Civil Society Organisations / other agencies to play an active role in this sphere. According to a report, ‘Although 79 out of the 115 governments surveyed have an open government data portal, often the most complete data is published on a source other than the official open data portal. In such countries, the majority of the most comprehensive datasets (61%) are published by other government agencies’.
Apart from ensuring data availability in public domain, another challenge for them is to build citizens' capacity to understand and use budget information. Lack of awareness (as per 50% respondent of the survey) is one of the major barriers that prevent effective use of information available online. Citizens/ users are not are fully aware about the potential use and benefits of the available information. Hence, apart from providing data, it is critical that data portals should also provide basic information about government budgetary concepts and processes and how the information can be effectively used.
A Quick glance at some open budget data portals
It was interesting to go through some of the budget portals available online. The portals that were assessed are Open Budgets India - OBI (India) and yourbudgit - Budgit (Nigeria). The comparison has been made to understand their strategies and features, with due consideration that both countries are very different in size both geographically and demographically.
Estimated budget of Nigeria, for the current financial year, is close to USD 24.55 billion whereas the estimated budget of India is close to USD 397.60 billion, i.e. almost 16 times more than Nigeria. Hence, OBI has much vast budget data to deal with in comparison to Nigeria. Sharing below a quick comparison:
The table above clearly indicates that both the portals aim at providing and presenting budget data in open formats to boost fiscal transparency in the country. Their forte lies in being a one stop point for budget data for Federal/Union government, State governments and Local governments. However, both portals have their own strengths and weaknesses. We try to compare the two portals side by side using some parameters as below:
Available Budget Data: On comparing both, it would not be wrong to label OBI as more ‘Transparency’ oriented portal and Budgit as more ‘Accountability’ oriented portal. OBI’s strength lies in the huge data it provides. Users can explore close to 10.6k datasets from 509 budget sources covering Union level, 29 States, 10 Districts and 61 Municipal Corporations. On the other hand, Budgit provides data at Federal level and for 36 States. In addition, both the portals also provide sectoral budget data, hence, making it even more accessible and locally relevant.
Awareness Generation: Portals are not just data providers but knowledge creators as well. In Budgit, section on ‘New to Budget’ provides basic information about government budget and budget data. It also shares various publications, opinion pieces, media pieces, blogs, impact stories etc. from time to time. On the other hand, in OBI, sections like ‘Budget Basics’, ‘FAQs’ etc. are helping users build their knowledge about public finance.
Data Formats and Use of Infographics: OBI is conforming to Creative Commons Attribution 4.0 (CC-BY) license, whereas Budgit does not mention anywhere in the portal about the license they conform to. Also, OBI provides data in CSVs, XLs and PDFs whereas most of the data in Budgit is available in PDFs and only a few documents are in XLs and Word Docs. But it is evident that efforts have been made, by both the portals, to provide data interestingly using visualisations and infographics.
Tools and Features: OBI maintains ‘Dashboard’ on Union budget, Assam State budget and two district treasuries. These dashboards help navigating through data, visualisations and provide insights for different tiers of government. On the other hand, innovative tools like ‘Tracka’, in Budgit, help in engaging citizens in the implementation of government projects in their community and to be a part of the change they want to see.
These portals are working towards bridging the gap between citizens and governments and in the process, enabling citizens to question governments in case of any gap. Another important aspect that can’t be missed is that they are unceasingly trying hard to involve governments (at various levels) in the process as part of their advocacy efforts. Developing and maintaining dashboards (in OBI) for State governments and District Treasuries is an achievement in that direction. Moreover, both the portals are providing institutional support to government departments and agencies from time to time.
Though it is overwhelming to see that lot of efforts are being made to bring budgets closer to people, there is still a long way to go. Till the time government departments are not sensitize enough to produce budget documents in standard formats/machine readable formats (like Open Document Formats for Spreadsheets (ODF) or Excel (XLS) etc.), it is going to be challenging for online portals to present the data in an open standardized format. The focus in this case should be on raising standard of transparency and accountability in government by continuously engaging with them.
It is equally important that more and more citizens become aware of the importance and use of budget information so that the demand for such data increases. Also, citizens should hold their government accountable for using public funds effectively and efficiently and these portals serve as important medium to achieve this end. Hence, role of these portals is not only important but challenging and their continuous endeavor should be towards striking the right balance on both sides with an aim to improve transparency and accountability in the domain of public finance.
The views expressed in this piece are those of the author, and don’t necessarily reflect the position of CBGA. You can reach Shuchita Rawal at firstname.lastname@example.org.
The ghastly terror attack in Pulwama, J&K, on February 14, 2019 in which 44 CRPF personnel were killed, had brought India and Pakistan almost to the brink of yet another war. Although, in the subsequent days, particularly since the release of Wing Commander Abhinandan, the captured IAF pilot by Pakistan, tensions between the two countries eased to some extent, yet, the spectre of another escalation loomed large in the region. The present discussion focuses on financing a war and its impact on the country’s economy. More specifically, in this essay, I analyse the impacts of financing a war on the economy in India and on its citizenry.
Broadly, there are three ways of mobilising resources for financing war. These are internal and external borrowings and taxation. Borrowing is economically costly since the state must repay the principal amount along with interest. Thus, it results in diversion of resources of government in meeting debt obligations rather than incurring productive expenditures with strong forward and backward linkages in the economy. External borrowing results in increase in indebtedness to a foreign country or multilateral funding agencies which eventually lead to leakage of nation’s scarce resources and loss of country’s autonomy in terms of policy making.
Of these, taxation is perhaps least economically costly as it avoids indebtedness and loss of economic sovereignty to any foreign agency/nation. It is perceived to be politically costlier in comparison of other measures as it extracts resources, sometimes forcibly, from the citizens of the country. However, when the citizens are in high favour of war, it becomes easy for the state to finance war through taxation (Cappella, 2012). That is why taxation is viewed as an enabling factor to provide for ‘war and the means of war’ in some countries (Tilly, 1990). However, many states have experienced a decline in revenue during conflict (Van Den., et.al., 2018). Also, post war impact on taxation in developing countries may not necessarily be positive. War may cause negative impact on economic activity, which in turn may reduce resource mobilization through taxation, and further reduce public spending.
In India, mobilization of resources through taxation is primarily done through indirect taxes which reflects the class bias of the state that desists from taxing the urban and rural elites to the required extent so as to further the process of accumulation. Kalecki (1952) argued that state led investment strategy by mobilising resources through indirect taxation is essentially regressive and inflationary. Patnaik (1983) argued that inflation leads to redistribution of incomes from the commodity buyers to the commodity sellers except for the sellers of labour power, i.e. the workers. These imply that the inevitable outcome of such a financing strategy is erosion of purchasing power and shrinkage in the size of the market which, in turn, adversely affects the effective demand and output of the economy.
Moreover, a substantial proportion of defence procurements in India are imported, primarily from the advanced capitalist nations like the USA and France. According to the Economic Times, “India increased its arms imports by 43 per cent, between 2007–11 and 2012–16. In the last four years India’s imports were far greater than those of its regional rivals China and Pakistan…”. Financing for imports of arms will have positive multiplier effects on the economies of these nations which are exporting defence equipment. In other words, state expenditure on defence will lead to increase in employment and incomes of economies like France and the USA, albeit not to the desired extent, which are already plagued by a severe economic recession. Hence, arms manufacturers that have strong connections with the political establishment in these nations will welcome escalation of conflicts in the South Asian region where Pakistan and India are major purchasers of weapons since it will enable them to attain the objective of profit maximisation. Also, increase in defence imports has the potential to adversely affect the trade balance and can lead to downward pressure on the exchange rate that can trigger an economic crisis.
Cappella, R. (2012). The political economy of war finance. Doctoral thesis, submitted at University of Pennsylvania.
Kalecki, M., (1952). The Problem of Financing Economic Development. Indian Economic Review.
Patnaik, U. (1983). On the evolution of the class of agricultural labourers in India. Social Scientist, 3-24.
The modern taxation system is based on the principles of two equities – Horizontal Equity and Vertical Equity. Horizontal equity means people with same income/wealth should pay same tax; while vertical equity means that people with higher income/wealth should pay more tax. Broadly, these principles combined are also known as ‘Ability to Pay’ principle of taxation. A tax system which follows these principles is termed as a progressive one, while the system which doesn’t follow these principles is termed as a regressive system.
The most common manifestation of ‘ability to pay’ principle is differential tax rates levied on the income. Generally, income tax is levied only on the incomes above a certain threshold, which essentially is acceptance of the idea that incomes below a certain level are too low to be taxed. And even for the income that is taxed, there is generally an increase in the tax rate as the income level goes up. This is certainly the case in India as can be seen from table 1 –
Because of these differing rates, as the income goes up, the tax paid also goes up – in the absolute amount as well as the proportion of income. Graph 1 represents this trend of income and tax paid as the percentage of income.
As depicted in the graph, the effective tax rate[i], which is the amount of tax paid as percent of income, rises with the level of income. However, the noticeable thing is that rate of increase in effective tax rate is much sharper at the lower levels of incomes and becomes flat at the higher levels of income. For example – when the income of a tax payer increases from Rs. 10 lakhs annually to Rs. 20 lakhs, the effective tax rate increases from 11 percent to 20.5 percent; but when the income of a tax payer increases from Rs. 1 crore to Rs. 1.5 crore, the effective rate goes up only marginally – from 28.1 percent to 28.8 percent.
There are primarily two reasons for this lopsided increase in the tax payable-
-A large increase in tax rate from 5 percent to 20 percent between the two lowest slabs
-Peak rate a very low level of income – the starting income to levy 30% tax rate is Rs. 10 lakh, which is merely twice of the income in the lowest slab, i.e. Rs. 5 lakh
Both of these factors combined produce an outcome, which technically can be classified as a progressive one, but it certainly is not a desirable one. A fair tax system should be the one which sees a more gradual increase at the lower levels of income and much sharper increase at the higher level.
Indian government has tried to compensate partially for this shortcoming through an indirect method of cess and surcharges, which are additional taxes levied on the amount of tax payable. The rates of cesses and surcharges that are levied on personal income tax in India are given in table 2.
The inclusion of cess and surcharge changes the tax payable calculation as follows – after the calculation of tax payable as per the income tax slab, surcharge is calculated by multiplying the corresponding surcharge rate with the tax payable. The amount thus calculated is then multiplied by the cess rate to arrive at the final amount. Simply the formula is –
Total Tax Payable = (Tax Payable as per the income tax slab) × (1 + surcharge rate/100) × (1 + cess rate/100)
Thus, cess and surcharge result in higher tax payable compared to the earlier calculation. The relationship between the income and the tax payable inclusive of cess and surcharge is presented in graph 2[ii].
The education and health cess make the tax system little more progressive compared to earlier, as can be seen for the incomes below Rs. 50 lakhs. However, the surcharges have larger impact. For the income group Rs. 50 lakhs to Rs. 1 crore – there is an average increase of around 4 percent; while for the income above Rs. 1 crore, the effective tax rate increases by little over 5 percent. Thus, overall, cess and surcharges do make Indian income tax system little more progressive than earlier.
While increased progressivity and additional revenue for the Union Government are the beneficial aspects, there are also some problem areas in case of cesses and surcharges because of the two following reasons –
-The amount of Cesses and Surcharges collected don’t form part of the divisible pool of resources which has to be shared with the States, hence are against the principles of fiscal federalism, and
-They add an extra layer of complexity for both the tax payers and the tax administrators
The easiest way to remove these undesirable aspects of cesses and surcharges, without the loss of progressivity or tax revenue, would simply be to eliminate cesses and surcharges and introduce new tax slabs and rates corresponding to the effective rates. One such new structure of slabs and rates is presented in the table 3.
The effect of new proposed tax structure on tax payable is depicted in the graph 3.
From the graph, it is clear that except for those with income above Rs. 1.5 crore, new rates will keep the tax payable for almost all tax payers at the earlier level; hence the revenue collected by the government should also remain almost same. Thus, apart from removing the undesirable aspects of the cesses and surcharges, the proposed structure will also help in increasing, only marginally though, the progressivity of the personal income tax system in India.
N.B. – The proposed rates were arrived at only considering the removal of cesses and surcharges. There are other reasons why the current personal income tax rates should be changed, most importantly to tackle the growing income and wealth inequality, though these considerations were outside the scope of this article.
[i] It should be noted that the graphs here are based only on the calculation of tax rates. While calculating tax payable, there are some other considerations as well, such as exemptions or other special considerations, but since they are likely to be tax payer specific and not necessarily universal, they have not been taken into consideration. In that sense, the above graph represents a very close approximation but not the exact amount of tax paid.
[ii] While calculating surcharge, one additional provision known as ‘Marginal Relief’ is applied to make sure that additional tax payable doesn’t exceed the additional income. Because of this provision, the increase in tax payable at the two thresholds (Rs. 50 lakh and Rs. 1 crore) would be slightly more gradual than depicted in the graph, but for our purpose they can be taken as negligible.
The views expressed in this piece are those of the author, and don’t necessarily reflect the position of CBGA. You can reach Suraj Jaiswal at email@example.com.
The experience of working alongside a state government at the time of budget preparations is truly a unique one. While we, as a civil society organisation, are more familiar with the flurry of post budget presentation analysis and critique, being a part of the process sheds light on the intricacies of the Government procedure itself. The opportunity came as part of a capacity building project on child budgeting with UNICEF for the Government of Assam.
Assam’s child population has been consistently marred with higher than average rates of Infant, Under-5 and Maternal Mortalities. For addressing these effectively, adequate resources and in turn, their proper utilisation are crucial. As a step in this direction, budgeting for children has been taken up by the state as one of their priorities in the last two years as part of their endeavour to fulfill the Assam Vision 2030. The encouraging dimension of this is that instead of just looking at it as an annual accounting exercise, Assam has shown the willingness to orient their departments not only towards child responsive budgeting but also in budgeting for other vulnerable sections of the population like the elderly, persons with disabilities and women. Recognising the inter-sectoral nature of these reforms, the state has further set up a dedicated unit called the Inclusive Budget Cell, with a mandate to institutionalise and strengthen the state’s efforts in budgeting for these recognised population groups. The concerned project child budgeting in Assam is multi-dimensional, a few of which have been discussed in this piece.
The Capacity Building Phase
Our engagement with this process started with two rounds of workshops with the Financial Advisors and Directors of select departments working on child related issues like education, health, nutrition, etc. Beyond the familiar domain of theoretical discussions, these workshops paved the way for consensus building among the departments on what constitutes an intervention for the child. Questions like ‘whether schemes for pregnant women and lactating mothers should be considered a part of the child budget for the year’ or ‘if the infrastructural development of Anganwadi Centres should be counted’ or whether the salaries of school teachers should form a part of the child budget’ were deliberated upon. Being encouraged to think about addressing the areas of concern for children in their respective sectors with new interventions, departments articulated a few proposed new schemes like water quality testing in schools, etc.
Drafting the Child Budget Guidelines for Assam
The consensus building process established in the two workshops culminated into the drafting of the Child Budget Guidelines for 2019-20 which was circulated within different departments as a manual for reporting in the Child Budget Statement (CBS). The template proposed for this year’s statement was significantly different from the existing format, being segregated into two distinct parts - Part A and Part B. While the former accounted for all government interventions which are exclusively targeted towards children, Part B is meant to capture the schemes and programmes which may be partly meant for children. For the latter group, it then made sense to report only the child specific components within the entire scheme as a relevant entry.
Preparing the Child Budget Statement
CBGA actively collaborated with the Finance Department of Assam in preparing the CBS for 2019-20. The process was a long drawn one with repeated deliberations with the line departments to understand their logic of reporting and thereafter initiate dialogue with them. With the introduction of the new template, the process of reporting in the Child Budget Statement was far from being a smooth one. While the segregation into the different parts of the statement was the lesser of the hurdles for the departments, figuring out the child specific allocations for Part B proved to be a major challenge for them. The gaps in the available data on child beneficiaries, thus, crucially constrained the quality of reporting in the statement. Discussions with the departments yielded interesting insights into the overlapping nature of budgeting for different segments of the population where several schemes like scholarships and entitlements to girl students formed part of both the Gender Budget and the Child Budget Statements.
What can we take away from this experience?
Needless to say, the process of child budgeting is still evolving, not only in Assam, but in different states as well. From our close association with the Assam experience, it can be said that on the one hand, there is a sustained need for sensitising the departments towards responsive budgeting for vulnerable sections of the population. On the other hand, considerable efforts are also needed to address the data gaps and strengthen the institutional mechanisms towards this end.
An important learning from this engagement has been the fact that the guiding principles used for reporting in the CBS are themselves not water-tight and have to be necessarily looked upon as evolving with the changing nature of the government programmes. An example in reference is the issue of incidental benefits accruing to children. While it is widely accepted that ‘incidental benefits’ from different government interventions flowing to children should ideally not be a part of a statement dedicated to ‘direct’ policy-driven benefits for children, often it becomes a challenge to determine what can be termed as ‘incidental’. This is especially the case in large government programmes where it often becomes difficult to ascertain the proportion of resources allocated exclusively for children. In spite of this caveat, it can hardly be overlooked that the proper implementation of these schemes is instrumental in shaping a child’s overall development. Clearly, such conundrums call for further deliberation on these issues to build a better understanding of what does a child responsive planning process entail as well as for ensuring a more robust categorisation of child related allocations.
Thus, the need for incorporating a child lens in both the planning and budgeting phases cannot be emphasised enough. It is only through such concerted efforts that a state like Assam can ensure better outcomes for children in the coming years.
The views expressed in this piece are those of the author, and don’t necessarily reflect the position of CBGA. You can reach Simonti Chakraborty at firstname.lastname@example.org.
One of the major yet rarely discussed issues in the informal sector of the economy has been the problem of bonded labour. A large proportion of India’s labour force is employed in the informal sector of the economy where they are paid low wages, do not have job security of tenure and are not covered under labour protection laws. Bonded labourers are exploited in terms of long working hours, coercion, irregular or no wages on account of a loan or social obligation and restrictions of movement from one employer to another employer. In India, the issue of bonded labour is not just an economic problem but is also a reflection of its social system, which is characterized by grading of occupations due to the age old caste stratification. Among the total rehabilitated bonded labour, 83 percent come from Scheduled Caste or Scheduled Tribe communities. Further, women and children constitute a large chunk of bonded labourers.
Union government data shows that high incidence of bonded labour has been reported from States such as Karnataka, Tamil Nadu, Odisha, Uttar Pradesh, and Andhra Pradesh. These five States account for around 84 per cent of the released bonded labourers in the country. States such as Bihar, Madhya Pradesh and Rajasthan also have a sizable number of bonded labourers. Generally, there has been a lack of recognition of the existence of bonded labour by the Union and state governments. The major push factors for a worker to go into bondage have reportedly been the skewed distribution of public resources, landlessness, lack of housing facilities, illiteracy and lack of access to credit market. Further, there are many other factors which lead to the bondage of labourers such as, unlicensed and exploitative recruitment practices relating to migrant workers, role of intermediaries, use of coercion, lack of collective action by employees, caste based occupational practices and indifference of the state machinery towards bonded labourers.
Forced labour has been recognized globally as a serious crime. The Government of India ratified the International labour organisation (ILO) Convention C029 on 30 November 1954. In India, the Constitution gave emphasis to the Magna Carta of Civil Liberties as per Article 23. It has a specific provision declaring “trafficking in human beings, begar and similar forms of forced labour to be punishable and unconstitutional offences”. The Government of India ratified the International labour organization (ILO) Convention C029 on 30 November 1954. Despite ratifying the ILO Convention, the Government of India took a long time to frame the laws on abolition of bonded labour system in the country. After the enactment of Bonded Labour System (Abolition) Act, 1976, the prevalence of bonded labour was made illegal and it was intended to be abolished throughout the country with effect from October 10, 1975.
Union government initiated the Centrally Sponsored Scheme for Rehabilitation of Bonded Labour in 1978 and revised it in May 2000. Between 1978-79 and 2015-16, Rs. 164 crore was provided by the Union government to states for rehabilitation of 2.8 lakh labourers. The budget allocation at national level accounts to Rs.4.8 crore per annum for rehabilitation of bonded labourers. In 2016, the Union government restructured and revamped the Centrally Sponsored Scheme (CSS) and termed it the Central Sector Scheme for Rehabilitation of Bonded Labourers. In the Central Sector (CS) Scheme, the State Governments are not obliged to pay the matching contribution in terms of cash assistance for rehabilitation of bonded labourers. There has been no change in the nature and number of interventions with this change from CSS to CS scheme.
All the major components of CSS like cash assistance, survey, awareness and evaluation studies have been retained in the guidelines of central sector scheme. However, two major changes that have been made in the Central Sector Scheme include, fund flow processes and increase in the unit cost of services in the components like cash assistance and survey. Financial assistance for rehabilitation of Rs. 20,000/- per beneficiary has been increased to Rs 1 lakh per adult male beneficiary, 2 lakh for children, orphans, forced child labour and 3 lakh for woman or children rescued from ostensible sexual exploitation in CS. Likewise, the cost for Survey of Bonded Labour has been increased from 2 lakh to 4.5 lakh per district. In CS, the full cash rehabilitation assistance is released to bonded labour after conviction of the accused which was not there in CSS. In result, due to poor conviction of accused only Rs. 20000 is being transferred as immediate assistance to bonded labour not the full financial assistance. Bonded Labour Rehabilitation Fund as corpus has been created at District level by each State as a permanent corpus of at least Rs. 10 lakh; earlier NCLP account was used for receiving fund.
There is a lack of recognition of existence of bonded laborers. The prevalence of bonded labour is not because of inadequate legislative and constitutional safeguards or programme for rehabilitation; actually it is due to poor implementation of laws and programmes. The implementation of the scheme remained restricted to only 18 states. Further, funds were also not released to States on time by the central government. There are inadequate or delayed proposals from the States under the various components of scheme. The budget allocated for rehabilitation under the scheme has also not been utilized. The survey, awareness generation and evaluation studies in scheme for Rehabilitation of Bonded Labour has not been conducted regularly. There is a lack of convergence between different government departments and regular monitoring of the scheme. The proceedings of court cases and the process of convictions have been very slow on account of various reasons.
In 2016, Ministry of Labour and Employment made a commitment to rehabilitating 1.84 crore bonded labour by 2030; and accordingly developed a 15 year plan called, Vision 2030, seven years Strategy and three years Action Agenda. However, for effective implementation of the Vision, the Strategy and the Action Agenda, it is recommended that the clause related to conviction of offenders linked with payment of cash assistance to released bonded labour should be done away with from the Central Sector guidelines. Full cash payment including other rehabilitation support from other schemes must be provided to bonded labourers after preparing the release certificate and First Information Report against the offenders.
The quagmire in the WASH (Water, Sanitation and Hygiene services) sector is a dearth of Systems thinking. The Sustainable Development Goals (SDGs), recently adopted by the United Nations, have sparked a renewed focus on what strategies will be necessary to achieve universal access to safe water and basic sanitation by 2030.It is no longer just about building toilets, installing taps and pipes but actually about the prevailing system of governance which exists that enables the WASH infrastructure to be sustainable in the long run. For long, the systems approach in the WASH sector has been ignored. The recently organized WASH Symposium by IRC and its partners –‘All systems go’! held at the Hague, Netherlands from 12th to 14th March 2019 brought this much ignored area into special focus. The Symposium was a practitioner-focused event on how to deliver strong and resilient WASH systems and on how to apply systems approaches to improving WASH service delivery. It was represented with practitioners and theoreticians participating from both the global North and the global South.
There are many challenges to achieving sustained, universal access to safe water and sanitation. They range from sanitation and hygiene services, safe and sustainable water, WASH in fragile states, measuring and learning WASH, financing WASH. An array of themes including the above was taken up in the three days of the Symposium. Some of the key highlights are given below:
- Removing systems blindness
In his opening speech, Patrick Moriarty (CEO of IRC) called on the delegates to end their ‘systems blindness’ and engage with the systems around them. The most visible elements of a system are usually prioritised first such as physical infrastructure or institutions, however, one needs to look beyond the visible such as communities, culture, policies, rules and regulations. The deeper one looks the more one can understand what really drives system behaviours.
- Avoiding systems clash
Dr Gilbert Buckle (Chairman of the Healthcare Federation of Ghana) in his keynote speech urged one to avoid ‘systems clash’. For example, if WASH is to be integrated into healthcare, the two systems need to be aligned and people need to see how they are working towards common benefits.
- Taking part in the system and acknowledging their role
Usually short-term project timeframes, failure to listen to communities, or output-focused funding mechanisms were found to undermine the change one was seeking. The discussions turned the spotlight on the delegates and pushed them to interrogate their part in the WASH system.
- Recognising complexity in systems
A key take away from the Symposium was the understanding that complexity exists in systems. The focus on systems change pushed people to be ambitious, recognise complexity, and own up to areas that had not succeeded in the past.
The need for understanding systems is even more relevant in the times of increasing water scarcity and rising inequity. While the role of existing polity cannot be undermined, efforts to strengthen systems which includes effective planning and monitoring in governance should be accelerated. The Symposium presented the best in systems approach and thinking, nevertheless, a few critical learnings came about which are presented below:
- WASH governance systems are varied and contextual
The core water and sanitation governance functions vary depending on the level of development of the sector and the country. In the context of India, it is usually the line departments that undertake the governance functions in cooperation with other stakeholders. In many other countries, donors and multilateral aid agencies are involved in governance in a greater capacity. Hence, WASH systems needs to be understood in the context of differences and variance.
- The demand for improved WASH service delivery
The need for improved and better WASH services was a recurring theme that ran along the discussions that took place in the Symposium. Although, measurement and progress in WASH services differed substantially based on region and country specific analysis, the urge and demands for bettering services remained constant.
- The critical role of public finance in WASH systems
Finance is a critical component of the WASH systems approach and in the case of India it is public finance. Adequate and effective utilization of public finances for WASH services at all the three tiers of the government is vital. Keeping in mind the bottlenecks and hurdles that abound at every stage of implementing WASH programmes and the complexity of devolution, strengthening systems in governance and finance could be a possible solution. Ultimately, the key lies in understanding public budget policy and budget processes at national, state and local levels.
 Those people, functions, activities, and behaviors that relate directly to WASH service provision are all part of the WASH system