The slippery slope of budget misgovernance

In an era of heightened pressure on the country’s fiscal position, with competing priorities of government spending, and as the free flow concessional donor aid comes rapidly to an end, it is inexcusable for a country to flagrantly disregard good governance with regards to public expenditure. A petition filed by the CPA this week shows that this year too (it was highlighted last year as well) the 2014 Appropriations Bill violates constitutional provisions in several aspects.

An important extract from this, reads:

In its Petition CPA challenged the constitutionality of Clause 5, 6, 7 and 2(1) b of the Bill. Clause 5 and 6 of the Bill permits the Secretary to the Treasury or any authorised officer to reallocate funds between heads/programmes without prior permission or subsequent ratification by Parliament. Furthermore Clause 7 permits the Finance Minister, with the approval of the ‘Government’- as opposed to Parliament- to withdraw monies allocated to a particular purpose, if he thinks such monies are not required. Clause 2(1)(b) of the Bill grants blanket authorisation to the Executive to raise foreign or local loans up to Rs.1100 billion (in the next financial year) without any requirement for Parliament to scrutinize and approve the terms related to the raising of each of such loans.

These challenges, if proven to be valid, are a serious violation of the Constitutional mandate granted to Parliament as ultimately having full control over all matters relating to public finances.

Now this concept is not included in the Constitution just for kicks. It recognizes and protects an important idea.

Public finances are built up from taxation of people’s income and expenditure. This necessarily means that the money that the government gets to spend ultimately belongs to the people. So it makes complete sense that the body that has ultimate authority over this money is the body of individuals who the people actually elect! The people’s representatives should necessarily have more oversight over their voters money. Not an individual minister or a set of “super-bureaucrats”.

Already, Sri Lanka ranks poorly on Budget Transparency, as highlighted in a recent article. An opposition lawmaker recently made an impassioned speech in Parliament lamenting the failure of fellow MPs to take up the good governance gaps in public enterprises as reported by the Parliamentary committee, COPE. Other articles have incisively shown that domestic revenue mobilization is key to Sri Lanka’s sustained development and better institutions are essential to ensure a smooth transition to and beyond middle-income status. Why does Sri Lanka keep shooting itself in the foot, at a time of immense economic promise?


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