Outcome Budgeting for Sustainable Development in India

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In News

• India is facing various emerging challenges, including the impacts of climate change, increasing inequities, and lagging human development indices.
• The United Nations Sustainable Development Agenda offers a framework to address these challenges, but achieving its goals requires effective prioritization in national planning, budgeting, and accountability frameworks.

Outcome Budgeting

• Outcome budgeting focuses on the outcomes and impacts of government programs, linking financial resources with expected results rather than just inputs and outputs.

Significance:

• Accountability: Enhances accountability by clearly defining outcomes and holding agencies responsible for results.
• Transparency: Makes government spending more transparent, showing how tax money is used and the expected outcomes.
• Efficiency: Identifies inefficiencies, allowing for reallocation of resources to more effective programs.
• Effectiveness: Measures program effectiveness and allows for adjustments to improve performance.
• Strategic Planning: Aligns budget allocations with long-term goals and priorities, maximizing impact.

Implementation:

• Requires setting measurable outcome targets, monitoring progress, and evaluating program effectiveness based on outcomes.

Outcome Budgeting and SDGs

• Outcome budgeting is essential for aligning government policies, strategies, and budgets with the Sustainable Development Goals (SDGs).
• It helps in ensuring the timely availability of optimal financial resources and fosters an open, accountable, proactive, and effective style of governance.

Implementation of Outcome Budgeting in India

• The concept of outcome budgeting was introduced in India in 2005 to transition from mere 'outlays' to result-oriented 'outputs' and 'outcomes' in developmental schemes.
• Around eleven Indian states have started formulating their Outcome Budget Statements (OBSs) to align with the SDGs. Assam was the first state to adopt the SDGs in 2016 and introduced OBS alongside its annual budget in 2018-19.

Outcome Budgeting in Assam

• Assam's OBS focuses on SDG outcomes and quantifiable targets, developed in collaboration with the state's SDG Cell.
• The state has been classified as a 'Performer' state in NITI Aayog's SDG India Index for 2020-21.
• Capacity building workshops and support from expert agencies have been instrumental in improving the quality of reporting and format of the OBS in Assam.

Improvements in Assam’s Outcome Budget Statement

The figure below depicts the thirteen thematic areas and SDGs linked:

Challenges and Recommendations

• Challenges in linking SDGs with outcome budgeting include lack of understanding at the district level, unavailability of disaggregated data, and inefficient coordination among M/Ds.
• Recommendations include capacity building of district officials, publishing bilingual statements, specifying time allotted for goal completion, and regularly monitoring departmental performance.

Conclusion

• While outcome budgeting is crucial for sustainable development, its implementation in India faces challenges.
• However, it provides an opportunity to strengthen budgeting practices at the national and sub-national levels, contributing to the achievement of socially desired outcomes.

PRACTICE QUESTION Q. Describe Outcome Budgeting and its importance in improving the efficacy of government spending. Support your explanation with instances from India. Highlight the obstacles to implementing Outcome Budgeting in India and suggest potential solutions.