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Tuesday, Sep 02, 2008
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Impact budget in January, says Isaac

Special Correspondent

T.M. Thomas Isaac says there will be a paradigm shift in the State’s development strategy.

THIRUVANANTHAPURAM: Impact budget, aimed at enhancing the efficiency and transparency of the government, will replace the traditional budgeting system in a department or a sector in January, Finance Minister T.M. Thomas Isaac has said.

Inaugurating a seminar on impact budgeting, organised by the Department of Finance, here on Monday, Dr. Isaac said that other than taking a political decision, the government had resolved to make a paradigm shift in the development strategy and it would not be an academic exercise anymore.

He said preliminary measures for replacing the traditional budget had been initiated. The number of files being routed to the Finance Department had been cut down and other departments would be made equally responsible for administrative lapses. The reforms in the Tax Department would be completed within three months. Social auditing had been introduced in the treasuries and many departments had started publishing the citizens’ charter. Often, the discussions were focussed on spending and not on the outcome.

Devolution of power

He said lapses in fund absorption would be flayed. The devolution of 35 per cent of the Plan funds to local self-government institutions, similar to the participatory budgeting in vogue in Latin American countries, was a major step in instilling transparency. There was a degeneration of ideals, but now the government was trying to put it back on the rails.

In its pursuit of the new development strategy and accelerating growth, the government would not compromise on social security and other welfare measures. Fiscal crisis and inefficiency of the government’s delivery system were the impediments to reorienting the system.

Delivering the keynote address, M. Govinda Rao, Director, National Institute of Public Finance and Policy, said that clear and consistent flow of resources and an efficient monitoring and communication system were imperative for impact budgeting. It could be experimented only in select areas with clearly set targets.

L.C. Goyal, Principal Secretary, Finance Department, welcomed the gathering.

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