A government budget is far more than a dry recitation of revenues and outlays; it is the most significant contract of trust between a state and its people. For a democracy, this “public purse” is a covenant of accountability. When that covenant is honored through transparency, it anchors economic stability and invites public faith. However, when information is withheld, “information asymmetries” flourish—gaps where the state knows the truth of its finances while the public is left in the dark.These asymmetries are not merely academic concerns; they are the shadows where “hidden debts” grow. In the wake of the pandemic, unrecorded off-budget liabilities have surged to an estimated one trillion dollars globally. Without the sunlight of clear, timely data, financial markets cannot accurately price risk, and citizens cannot judge the true cost of policy choices. To measure the health of this fiscal sunlight, we turn to the Open Budget Survey (OBS), the world’s premier independent benchmark for fiscal governance.The latest OBS findings present a sobering narrative for New Delhi. While once on a path toward greater openness, India’s fiscal governance is currently undergoing a silent but significant shift—one that favors internal secrecy over public scrutiny. Through the pillars of transparency, participation, and oversight, the data reveals a nation retreating from global best practices, even as its peers demonstrate that institutionalized openness is the ultimate safeguard for a developing economy.
The Great Transparency U-Turn
India’s once-promising trajectory toward fiscal sunshine has been eclipsed by a return to the shadows of internal-only reporting. In the 2023 OBS report, India achieved a transparency score of 51 out of 100, reflecting a steady climb from earlier years. However, the 2025 report reveals a sharp regression to a score of 44. This decline marks a fundamental shift from providing “limited” information to providing “insufficient” information, effectively stifling informed public debate.The architecture of this decline is specific and deliberate. The backsliding is directly attributed to the government’s decision to reclassify two foundational documents—the Mid-Year Review and the Audit Report—as being for “internal use only.” By pulling these documents from the public domain, the executive has shuttered the windows through which the public could view mid-year fiscal health and adherence to spending rules. This regression endangers the very stability the state seeks to project.”Fiscal transparency is a fundamental prerequisite for financial stability. Without ready access to reliable, comprehensive, and timely information about the government’s true financial position, markets cannot properly evaluate the true costs and benefits of government activities.” — Based on IMF and RBI premises.
A Participation Score That Refuses to Move
If transparency is the ability to see, participation is the ability to speak. On this front, India’s performance remains trapped in a state of “abysmal” stagnation. For both the 2023 and 2025 cycles, India’s public participation score has refused to budge from a dismal 6 out of 100.The breakdown of this score reveals a near-total exclusion of the public from the fiscal lifecycle. While the Ministry of Finance earns a modest score (20/100) for pre-budget consultations during the formulation stage, the door slams shut immediately thereafter. India recorded zeroes across the Approval, Implementation, and Audit stages. This means that once a budget proposal is finalized, there are no formal mechanisms for civil society or the public to testify before the Lok Sabha or contribute to the audit programs of the Comptroller and Auditor General. In the absence of these mechanisms, the budget becomes a monologue by the state rather than a dialogue with the people.
The South Africa Benchmark: A Global Standard
The argument that high-level fiscal transparency is a luxury of the developed world is dismantled by the example of South Africa. In the 2023 OBS, South Africa achieved a transparency score of 83 out of 100, ranking 4th globally among 125 nations. It is a study in how a developing economy can institutionalize openness to build international credibility.South Africa’s success is built on mechanisms India currently lacks. While India provides zeroes in audit and implementation participation, the South African National Treasury utilizes “e-consultations” to engage citizens directly. Furthermore, South Africa publishes an exceptionally comprehensive Pre-Budget Statement—a document India does not produce at all—which sets the stage for months of informed debate before the final figures are even tabled.
The Missing Link: The Independent Fiscal Institution
Perhaps the most critical differentiator is the presence of an Independent Fiscal Institution (IFI). South Africa’s Parliamentary Budget Office (PBO) is an independent, nonpartisan body whose independence is enshrined in law. Crucially, it reports directly to the legislature, not the executive, providing independent macroeconomic assessments and cost estimates for new policies.In India, the absence of an IFI creates a vacuum filled by “optimism bias”—the systemic tendency for budget projections to offer overly rosy forecasts of growth and revenue. Without an independent counter-weight, lawmakers are forced to accept executive figures at face value. Despite the urgent recommendations of the N.K. Singh (2017) and D.K. Srivastava (2018) committees to establish an independent fiscal council, the proposal remains shelved. This architectural void is the primary reason why Indian legislators often find themselves “flying blind” during the budget cycle.
The Erosion of Legislative Watchdogs
The decline in India’s transparency is mirrored by a weakening of its oversight institutions. Legislative oversight dropped from a score of 58 in 2023 to a mere 47 in 2025. The OBS explicitly flags “weak oversight during the planning stage,” noting that the Lok Sabha lacks the independent analysis and sufficient review time required to scrutinize the budget effectively.This erosion is a direct symptom of the missing IFI and the new culture of document secrecy. When the Mid-Year Review and Audit Reports are classified as internal, the “feedback loop” of governance is severed. Lawmakers cannot assess past performance to inform future spending, leading to a loss of what experts call “policy productivity.””Transparency in government accounts dramatically improves the ‘feedback loop’ of governance. When the true fiscal impacts of all policy initiatives are openly reflected, it enhances governmental accountability and ensures greater productivity in how public resources are utilized.” — 13th Finance Commission
Beyond the Ledger: A Roadmap for Reform
The path to restoring India’s fiscal standing requires more than a return to the status quo; it requires a structural evolution. First, the government must immediately reverse the classification of the Mid-Year Review and Audit Reports as “internal use” and restore their public availability. Second, India must move beyond its peers by creating a comprehensive Pre-Budget Statement to facilitate early-stage debate. Third, the Lok Sabha must institutionalize participation by allowing civil society to testify during budget hearings, following the model of South Africa’s e-consultations.Ultimately, the most vital reform is the establishment of a statutory, independent fiscal council. Without a nonpartisan body to harmonize statistics and check “optimism bias,” the executive’s control over the fiscal narrative remains unchecked.The current trajectory of fiscal secrecy is a risk to India’s long-term macroeconomic stability. As the global economy becomes increasingly sensitive to hidden liabilities and information gaps, we must ask: what is the personal cost of this growing fiscal blackout, and can India truly claim the mantle of a global economic leader while its public purse remains a private secret?
