INDICATORS & PUBLIC ACCOUNTABILITY IN INDIA
AUTHOR : VIJAYENDRA N. KAUL, C&AG OF INDIA
Public Accountability & Audit
1.In India public accountability entails accountability not only of the executive to the elected legislative bodies but also of the subordinate public agencies to the executive. In particular, financial accountability is realized through budgetary control including proposals for taxation and public debt and demands for grants being voted in the legislatures and reporting of expenditure in the form of accounts. .
Accountability & Performance auditing
2.There has been a progressive shift of stakeholder concerns beyond budgetary control and regularity of public expenditure to the outcome and impact of State’s interventions in the development process. In deference to stakeholder interests, SAIs have also started devoting greater resources to performance auditing. Apart from the economy and efficiency in use of resources in government programmes and schemes, performance audits also evaluate effectiveness of performance in relation to the achievement of the objectives of the audited entity and audit of the actual impact of activities compared with the intended impact.
Performance auditing & indicators
3.Critical to evaluation of the effectiveness of government programmes and activities is the adoption of an appropriate criteria for evaluating performance. Presence of a widely accepted system of indicators in economic, social and environmental areas would provide a uniform set of criteria not merely for performance audits by an SAI but also evaluation by other agencies (external and internal). Unfortunately there is no comprehensive system of performance indicators available in many countries. Divergent practices continue to be followed by independent evaluators, national governments and multilateral agencies. The inconsistent quality of statistical information within & across countries currently leaves scope for divergence of views on performance evaluation. This leads to widely divergent conclusions regarding the extent of success of government interventions. Therefore, there is need for development and acceptance of a selected set of indicators to inform civil society and support wider communication with the public.
4.Such a set of indicators would facilitate the understanding of the mutual inter-dependence of various policies/programmes; assessing the position and progress of the economy over time, across the countries and across the regions within a country; providing crucial guidance for decision making in identifying and transition towards sustainability, and providing information to general public in forms that non-specialist’s can relate to and thus strengthen the accountability mechanism of governance.
Need for indicators : SAI India’s case
5.The Comptroller & Auditor General of India is mandated to audit all the expenditure and receipts of both the federal and provincial governments, all commercial enterprises where government have a majority equity stake and all other organizations which are substantially financed by grants from the government. The audit is not restricted to regularity and compliance and has progressively been oriented towards evaluating performance of the various programmes and schemes undertaken or funded by the Government.
6.In order to prioritise its activities and audit efforts, SAI India has formulated a Strategic plan 2003-08 which is premised on evaluation of the various programmatic interventions of Government so as to promote accountability and encourage effective utilisation of resources. The five themes selected for this Plan reflect the priorities of the Tenth Five Year Plan adopted by the Government of India. The theme of human development incorporates social sector programmes of poverty alleviation, health services, population stabilisation, literacy and education, nutrition, food security, and, improvement of disadvantaged and vulnerable groups. The theme of economic liberalization includes fiscal management, tax reform, management of subsides and privatization. The theme of infrastructure modernization includes power sector, ports, roads, railways, communications and hydrocarbons. The theme of technology upgradation covers information technology and biotechnology. The theme of sustainable development includes environmental legislation, multilateral environmental agreements, air & water quality, waste management etc.
7.The primary objective of the audit efforts of SAI India will be on assessing the efficiency, effectiveness and economy of the various schemes and programmes funded by the government and make recommendations for improving performance. Presence of a set of key indicators in each of these areas would go a long way in making the performance audit results more reliable and acceptable.
Indicators & result based budgeting
8.Indicators play a more critical role in organizations that have moved to result based budgeting e.g. UN agencies The key identifying feature of results-based budgeting is that the emphasis is on the outputs to be produced (reports, studies, conferences, etc.) and consequent outcomes, as opposed to input budgeting where the defining feature is an emphasis on the inputs (staff, materials, equipment, etc.). The orientation towards either outputs or inputs is important at all stages of the budget process (programming, budgeting, implementation, monitoring and evaluation). However, the most important determining factor here is the initial budget proposal stage as this sets the output pattern and framework for all subsequent stages.
9.Almost all the UN agencies have moved to result based budgeting. A similar trend is also evident among national governments. In such contexts, clarity and consensus on indicators is extremely necessary. Furthermore if indicators become integral to stakeholder reporting, independent and external verification (equivalent to assurance on financial statements) should become essential. A comprehensive system of indicators would infact supplement accounting standards and disclosure norms in such an environment.
Nature of Indicators being used in India
10.In its aspiration to quicken the pace of development and to raise the economic well being of its people the Government of India has been following a path of centralized economic planning. This entailed planned commitment of resources to realize objectives on which there was political consensus. Both the establishment of goals and evaluation of the success of the plans needed indicators and reliable statistical information on those indicators. Hence, ad hoc indicators sets were developed early in the country and used for monitoring government expenditure. However, no system for comprehensive monitoring of the economy through reliable indicator was in place.
11.Indicators and statistical information was generated at two levels. At the first level, information on the performance of the Government is generated and disseminated by economic and social ministries and departments of the national and provincial governments by way of either an administrative by-product or specifically designed periodic or ad-hoc surveys. In addition, there are centralized agencies such as the Central Statistical Organization (CSO) and the Programme Evaluation Organisation which compile, collate and analyze information about a host of parameters of national importance both as policy inputs to planning or development interventions or as the outcome of past programmes. The issues of symmetry of information by this centrally located evaluation agency and the requirements of better cooperation with the implementing department are addressed through Coordination Committees, set up for each evaluation exercise, which have representatives from line ministries/departments and other stake holders and subject matter specialists as their members.
12.Another source of statistical information on national indicators has been the decadal population census which have been in vogue in India since 1881. It has emerged as one of the most comprehensive sources of demographic information down to the village level. Besides the head count of population, the census also collects and provides information on status of houses as residential and non-residential, information on occupation by age, sex, marital status, social status, educational level attained, economic activity, fertility trends and migration. Census also validates the data generated by Central Registration System (CRS) which makes registration of births and deaths mandatory. Population is used as a common normalizing factor to make parameters like revenue, expenditure, income, infrastructural availability, etc., scale neutral.
Social indicators
13.Comprehensive indicators have been designed in health and education sectors. Annual Health Information Index by the Department of Health and Family Welfare provides information on vital statistics, infant mortality rates, life tables, prevalence of communicable diseases, coverage of population under family welfare programmes, number of health care units at primary, referral and specialty and super-specialty level, medical and paramedical persons, etc. National Samples Survey Organisation (NSSO) of CSO in their consumption expenditure surveys of household also provides information on expenditure of household of health related aspects. Ministry of Human Resource Development provides information on teaching institutions, teachers, examination results, enrollment, educational inputs and physical facilities. Information is also provided by NSSO on household expenditure on education and literacy levels. However, there has yet been no move to adopt International Standard Classification of Educational Statistics proposed by UNESCO and as such international comparability of many education related indicators is still absent.
Economic Indicators
14.NSSO through their quinquinial surveys undertaken every five years since 1972-73 provides most comprehensive set of data on employment. It provides estimates of number of employed according to the activity status and their estimates of numbers of employed according to the activity status and their social, demographic and economic characteristics. Director General Employment and Training also provide information on employment in organized sector, but for informal and unorganized sector, NSSO surveys are the ultimate source.
15.NSSO generates household consumption expenditure data akin to the Family Living Surveys in most other Countries through specific surveys since 1950-51. These are extensively used in studies on levels of living, disparities in levels of consumption, cross section and time series analysis of consumer behavior, incidence of poverty, etc. In recent years, the survey data have become extremely important for the measurement of absolute poverty and head count poverty ratios. Department of Rural Development had initiated Below Poverty Line surveys for their poverty alleviation programmes to assess their numbers. The consumption surveys for selected class of population have also been in vogue. The Labour Bureau in the Ministry of Labour has been conducting Family Living Surveys since 1958-59 for industrial workers to draw their weighting diagram for Consumer Price Index (CPI-IL), which is also used as an inflation index for organized sector wage indexation.
Environmental Indicators
16.In addition to the two broad groups of social and economic indicators, some institutional and environmental indicators are generated. Environmental indicators relate to pollution levels, pollution control measures, air and water quality, forest cover, etc.
Human Development Report 2001
17.A major initiative was undertaken by the Planning Commission of India in 2001 to put together seventy indicators and three composite indices to evaluate the development process. The Report focused on three critical dimensions of well being, namely, ability to live a long and healthy life; the ability to read, write and acquire knowledge; and the ability to enjoy a decent standard of living and have a socially meaningful life. An extensive state level data base was prepared covering around seventy indicators. The entire data set has been compiled for at least two points of time; early eighties and early nineties.
18.An attempt was made to capture the process of development from two perspectives- conglomerative perspective, capturing advances made by the society as a whole and the deprivational perspective, assessing status of the deprived. Statistics was therefore also compiled for the elderly, working children, disabled and violence and crime against women. Similarly separate information was captured for women, people residing in rural areas and those belonging to so called lower castes. For most indicators gender and Rural-Urban gaps were estimated.
19.The Report also attempted three composite indices. A Human Development Index which incorporated inflation and inequality adjusted per capita consumption expenditure, a Human Poverty Index encompassing longevity deprivation captured by the indicator persons not expected to survive beyond age 40 years; Composite indicator on educational deprivation and Composite indicator on economic deprivation and a Gender Equality Indices using the same methodology as HDI.
20.The data has been presented in a unique manner, through ‘development radars’, which gives a snapshot view of the structure, the growth and the gaps vis-à-vis desired normative levels, in respect of eight different indicators covering attainments on education, health, economic well being and access to amenities. It not only helps in simultaneously assessing attainments in different aspects of quality of life, but is equally useful in identifying the areas of gaps for facilitating an informed policy focus at the State level. The development radars overcome the criticism often directed at the use of subjective weighing techniques to combine diverse social indicators into composite indices of human development.
21.Despite its contextual significance in aptly capturing the concerns of our people, the Human Development Report and its indices were not able to address the growing importance of environmental issues. They were also not able to integrate several aspects of sustainability. A mapping of the indicators used in the HDR with those of OECD and CSD is placed at Annexures I and II respectively.
Developing a preliminary Sustainable Development Indicators framework for India
22.In another initiative, the task of formulating a comprehensive set of Sustainable Development Indicators has been taken up by the Government of India. This has been a follow up to the decisions taken at the Rio and Johannesburg summits. The formulation of a comprehensive set of indicators takes on a great complexity in the Indian context. The first major problem is definition of a set of indicators which are relevant throughout the country, especially in view of different socio-economic and environmental concerns in the urban, rural and other geographical regions. The second issue is addressing data requirements for aggregation of local indicators at the national level.
23.Work has already been done by several agencies across the World in formulating indicators of sustainable development. These would provide some guidance but the final framework will need to address the specific circumstances of the Indian reality. The alternative models are presented in the succeeding table.
Initiative / Organisation /Framework
World Development Indicators / World Bank / Six sections: Worldview, People, Environment, Economy, States and Markets, and Global linksState of the Environment (SoE) reports / United Nations Environmental Program / SoE framework based on PSR approach
World Resources / World Resources Institute / Assessment and analysis of the state of various ecosystems
Human Development Report (HDR) / United Nations Development Program / Critical analysis of a specific theme each year to assess the state of human development
World Health Report / World Health Organization (WHO) / Presentation and expert analysis of indicators of health systems and status
International Development goals- indicators of progress / OECD in partnership with the UN, World Bank and IMF / Indicators that gauge progress towards development goals selected from a series of UN Conferences held during the decade of 90s.
Indicators of sustainable development / Commission on Sustainable Development (CSD), United Nations / 134 indicators organized in Driving force-State-Response (DSR) framework-replaced by 4 dimensions (economic, social, environmental, institutional)
24.While most attempts capture indicators relating to specific themes, the indicator programme undertaken by the UN CSD has a larger mandate of developing a framework for ‘indicators of sustainable development’. This programme was initiated in 1995 in response to Agenda 21 which called for harmonized efforts towards developing indicators of sustainable development that could provide a basis for decision making at all levels. The main objective of the CSD Work Programme was to make SDI (sustainable development indicators) accessible to decision- makers at the national level, by defining them, elucidating their methodologies, testing them and providing training and other capacity building activities.
Audit of Indicators
25.The CAG of India has been making use of indicators widely in international audit assignment particularly in cases where resulted based budgeting has been adopted. However, use of indicators for audit in the domestic context has not been on a systematic basis. This is primarily because a comprehensive set of key indicators have not been determined for purposes of reporting, planning, clarifying policy objectives and for budgeting and assessing performance. As stated earlier there is a proposal to adopt a comprehensive set of sustainable development indicators. We envisage a distinct role for an SAI once this is done.
26.Apart from the usefulness of indicators to SAIs in discharge of their performance audits, indicators could themselves be objects of audit scrutiny of SAIs. For instance, SAIs might look to see whether indicators:
a)Have policy relevance, which means that they must be easy to interpret; show trends over time; respond to changes in driving forces; and have threshold or reference values against which progress can be measured.
b)Are analytically sound, for example based on a clear understanding of the goal of sustainable development;
c)Are measurable, that is, no matter how attractive the theoretical construct, if an indicator cannot be measured at reasonable cost, it is not useful.
d)Are able to aggregate information. The list of potential sustainability indicators is endless but for practical reasons, indicators that aggregate information on broader issues may be more manageable.
e) Are able to capture the context and process. The relevance of any indicator lies in the context that it captures- an augmented agricultural productivity could convey both an improvement in soil quality and an unsustainable increase in the use of chemical fertilizers. For an indicator to be useful in understanding the dynamics of sustainability and decision making, it should be able to capture the underlying processes and context which can be made possible only through the involvement of stakeholders.