Asian Center for Democratic Governance >> Freedom of Information for Good Governance

A Report by the Asian Center for Democratic Governance
6 - 8 August 2001
New Delhi, India
Program:

  • Main
  • Agenda
  • Session I:
    An Overview of the Legal-Political Environment in Regard to Freedom of Information
  • Session II:
    Freedom of Information: The Media's Role in Ensuring Transparency
  • Session III:
    Freedom of Information: The Government's Role in Providing Transparency
  • Session IV:
    Economic Information and the Role of the Business Community
  • Session V:
    The Impact of New Technologies on Freedom of Information Appendices:
  • Workshop Presenters
  • Background
  • Official Information Act
  • Closing Remarks

    • Session III - Freedom of Information: The Government's Role in Providing Transparency

    OPENING REMARKS

    Sanjaya Baru
    Chair

    A few years back, I was told that a Scandanavian government actually has a rule that accredited journalists have right of entry into any government office, which means that they can actually sit through meetings, not just go and meet any individual. That is ultimate transparency and right to information. In India, many of my colleagues find it difficult, even when they are accredited correspondents, to get access to officials and ministers. It is a daily effort to force governments to be more transparent, to share information and procedures and processes by which decisions come to be taken. I think, in many ways in a democracy, that it is far more important to know and understand how a particular decision came to be taken, what kind of pressures and pulls operate in the process of decision-making.

    ADDRESS

    Antonio Chiang

    The title of my report is "Taming the Big Brother: The Uneasy Case of Fostering Transparency in Taiwan." I hope George Orwell would be pleased to entertain this report by me, wherever he is. Like him, I have been a writer by profession. In addition to my news columns and editorials, I have run operations at several Taiwanese magazines and newspapers. Some were actually confiscated during the Martial Law and White Terror era in Taiwan.

    Of course, citizens in Taiwan now largely have stopped worrying about illegal government seizure of books and other means of expressions and communications. As a robust albeit precocious democracy, we now face a new threat-paparazzi. On a lighter note, worrying about being tailed by paparazzi is much better than worrying about confiscation by the old Taiwan Garrison Command.

    With this brief account of personal history, you will know my views and convictions on transparency in the government and protection of civil and political rights, including the freedom of speech and press and the right of privacy. But serendipity has made me a civil servant since the Democratic Progressive Party (DPP) won the March 2000 presidential election in Taiwan. I therefore begin with the usual disclaimer: What I report below does not necessarily reflect the views of my government. On the other hand, I hope my report leaves an impression with you that I am not an apologist for government policies, either.

    I think the most important indicia of government transparency and protection of civil liberties in Taiwan are emerging constitutionalism and a strong media. For example, one of a recent decision of the Council of Grand Justices, our constitutional court, held that writers and editors of a news magazine may not be liable for criminal defamation of a prominent minister without actual malice in the reporting. Some of you are reminded of New York Times v. Sullivan.

    The media in Taiwan is fiercely (some say ruinously) competitive. They reflect the political appetite of the public to know, and therefore monitor, what the government is doing. It was not easy to build a strong media. A Publication Law adopted in the 1950s had sought to suppress the print media, and was tantamount to a gag order. It also created a cartel of newspapers, which was subject to heavy-handed regulation.

    Oddly enough, the Publication Law was not repealed until 1999, more than ten years after Taiwan lifted the Martial Law. Like Martial Law in its advanced years, the Publication Law ran out of steam by the late 1980s. But I believe the Government Information Office (GIO) in Taiwan was shamed into repealing this legislation: In 1996, the Asian Wall Street Journal wanted to transmit its newspaper electronically into Taiwan for local printing, so that it could deliver the newspaper to subscribers and readers more efficiently. The GIO staff for some inexplicable reason argued, incorrectly, that AWSJ could not be "published" in Taiwan under the Publication Law. The silliness of this view was soon rectified by the GIO itself. It would rather not see its role as the government spokesman be tarnished.

    The KMT government also tried to control the electronic media like television, radio, and cable television. By the mid 1980s, however, the audience started to tune out of the three government-affiliated terrestrial television stations. Instead, they sought illegal CATV stations, known as the "fourth stations." Opposition politicians also found it important to invest or support these fourth stations so that they could reach voters more directly. The government was forced to legalize the CATV industry beginning in the early 1990s.

    As much as the press wants to know what the government is doing, the government wants to preserve the confidentiality of its more important programs until it thinks they are ready for public disclosure. Getting the government to open up its kimono is never easy. For example, more than 20 years ago, a group of legal scholars led by a thoughtful professor (now the president of our judiciary) drafted an Administrative Procedure Law bill. Resistance by the executive branch led to procrastination. But this law was enacted in 1999, and came into force in 2001.

    Emulating comparable legislation in the United States and Germany, this law will ensure enough government transparency in policy formulation and administrative decisions. Bureaucrats in Taiwan still hate having to deal with the procedural and prudential requirements of the new Administrative Procedure Law. On the other hand, they now fully realize that these are the new rules of the game, and they have to play by them.

    The Administrative Procedure Law also mandates the passage of a Freedom of Information Act in two years. Personally I still see some delays. However, I remain optimistic that this bill and the Government Archives Law bill will be enacted in the not-too-distant future.

    Transparency is important to both citizens and investors. Therefore, in recent years, Taiwan authorities have devoted substantial efforts to improve corporate disclosures and corporate governance. In the past, Taiwan's capital market bore no relation to her economic growth. Some government officials even regarded the Taiwan Stock Exchange as a casino.

    While Taiwan's securities market remains notoriously volatile and speculative, both the public and regulators now fully realized the importance of corporate transparency as well as other measures to improve the accountability of listed companies. For example, in the past, Taiwan's Securities and Futures Commission only focused on disclosures of the parent, listed company. Now the SFC in Taiwan has implemented a policy to require also that examinations and disclosures be done on a consolidate basis.

    While an accountable government will need to be transparent, it also needs to protect the privacy interest of its citizens. Several recent Taiwan laws are relevant to the protection of the right of privacy. First, the Computerized Personal Data Protection Law of 1995 prohibits illegal use, by the government or commercial firms alike, of computerized personal data without consent and meeting other safeguards. Second, the Communications Surveillance and Protection Law of 1998 would offer legal protection against unauthorized wiretapping and other forms of surveillance. Despite democratization, both the general public and even politicians complained about their communications being monitored. This is clearly a side effect of the Martial Law of past Taiwan.

    Third, the Civil Code as amended in 2000 now formally recognizes a right of privacy. Before, what the Civil Code meant by "personal rights" was unclear. In the commercial area, the Trade Secrets Law of 1995 also provides civil relief against the theft of trade secrets. To be sure, enactment of law cannot be equated with law enforcement. The authoritarian political culture in the Chinese tradition and strong family bonds make it difficult to protect privacy. Nonetheless, with these new laws, Taiwan now can safely expect to achieve the long-term goal of meaningful protection of the right of privacy.

    There are indeed some encouraging signs about developing a respect for citizens' right of privacy. For example, a few years ago, there was a proposal for the government to issue an electronic ID card. Because of the tight government, a decision was made to outsource this ID card through a build-operate-transfer approach. The successful bidder would be able to use such ID card information to offer other, e-commerce business opportunities. A public outcry against possible abuse led to a significant modification of the original plan so as to address the privacy consideration.

    Yet another example just occurred last month. The National Household Registration Law allows the government to take fingerprints from those ages 14 and above who will receive new ID cards. The current ID card is due to be invalid, as a new set of ID cards will be issued to replace them. The law enforcement authorities wanted to vigorously enforce this rule so as to support their crime file. Again, the public balked. As a result, the cabinet has given up on this proposal, citing human right and cost reasons.

    While Taiwan has made a remarkable achievement on democratization and in improving government transparency, it faces increasing problems of the integrity of government personnel, including legislators of the central and local governments. This is known as the "black gold" issue in Taiwan. The March 2000 presidential election is said to boil down to this issue.

    "Black" means gangster politics, or gangsters getting into politics. In the national Legislative Yuan as well as the city or country council of local governments, some legislators are affiliated with the mob, and they wield substantial clout in legislative proceedings. In view of Taiwan's current state of fragmented political power, our society will suffer from their enhanced nuisance value and swing vote effect. "Gold" means money politics, or plutocracy. It refers to major government policies and laws becoming the product of regulatory capture. It also suggests that the government has been co-opted by large, monopolistic firms

    Clearly, Taiwan's Legislative Yuan and the city or county councils of the local government should shoulder at least part of the blame. For years, Taiwan has talked about legislative and electoral reforms. When, for example, multiple candidates running in the same district can win, a candidate taking an extreme position can often fetch enough votes to get himself or herself elected. There is now a "gangster exclusion" proposal to amend Taiwan's Elections and Recalls Law.

    Serious economic reforms, including opening up the economy, help in dealing with the ethical issues of bureaucrats. Generally, the more open the market, the less need to obtain licenses and permits in advance of an investment project. In other words, economic liberalization and privatization will reduce rents. This makes rent-seeking activities less desirable and less effective.

    Like the Government-in-the-Sunshine legislation in the United States, in Taiwan there is a Law Governing the Declaration of Property by Government Personnel. Legislators, senior government officials, and officials holding certain responsibilities will have to declare their property periodically. Such declaration will be useful in detecting (and certainly useful in limiting the incentive of) unethical conduct, or simply corruption. However, the quality of declarations is highly uneven. Random sampling and further spot investigations of such declarations have shown that 90 percent of such declarations contain mistakes.

    This mandatory property declaration law provides for compliance through either making periodic declarations or setting up a blind trust. To be sure, these rules only apply to individuals who serve in a government capacity (including legislators). However, the KMT party has announced that it would pursue the blind trust approach for its massive party assets (which are subject to allegations that such assets were expropriated from the states).

    In the last 20 years, there have been proposals from time to time that Taiwan should adopt a drastic measure to combat corruption. The most important proposal is to follow Hong Kong's example to create an independent commission against corruption. The new government is studying this issue. However, as the new government is busy dealing with immediate issues and it is not easy to create such a super commission, it is not likely to embrace a Hong Kong-style ICAC proposal soon.

    Technologies add a significant dimension to the transparency issue. For example, it was recently reported that the legislature of the U.S. state of Colorado just decided that, when issuing new drivers' licenses, the face of the license holders will be scanned into the DMV's system. This is like the recent case in Taiwan about taking citizens' fingerprints so as to ensure there would be database to search for possible criminals.

    Taiwan has succeeded in developing a democracy. Democracies are designed to tame the Big Brother. But we all know that this is easier said than done. In the final analysis, transparency in the government depends on its confidence. Forty years ago, it was inconceivable that Taiwan would develop a strong economy. Twenty years ago, no one was sure the Martial Law would continue and rambling lip service to national security. Taiwan has succeeded in completing the political transition from rule by a party to rule by another party. She is poised to enter the World Trade Organization soon. I remain confident that her government transparency will improve as Taiwan prepares herself for a round of new challenges in the 21st century.

    With these final thoughts, I conclude my remarks. Thank you.

    Ashok Lahiri
    Endnotes

    A democracy is government not only for the people, but by and of the people as well. The knowledge of the people about national finances determines to a large extent the knowledge of the government that they elect. If the real reasons for financial problems are not easily available, public speculation may complicate matters. Certainly voters will notice the obvious signs of poor economic management, such as unemployment and inflation, but their lack of information will restrain them from choosing the government best skilled to lead them to economic prosperity. Financial transparency is not only in accordance with the principles of democracy; it may be a prerequisite for good democracy itself.

    One of the important economic benefits of a democracy is the reflection of people's needs and aspirations in government policy and public expenditure. This reflection should occur through the people's representatives in the government at all levels. The representatives of the people are accountable to the people, and the system of accountability can work if and only if the electorate understands the government's decisions.

    Transparency leads to better-informed public debate about fiscal policy design, increased accountability in policy formulation and implementation, and greater public understanding of macroeconomic policies and choices. The annual budget of the government is the most important event in policy-making, taxation, and public spending, which makes budget transparency of paramount importance. Financial experts can unravel the mystery behind the budget and understand the jargon littered throughout the budget document. Ordinary citizens, however, need to hear this year's proposals and last year's performance in clear and simple terms. It is neither necessary nor possible to make every citizen understand every detail of the budget, but it is important that he or she understands the essence and knows where additional details are available.

    Transparency can also be a great aid to financial and fiscal soundness. It can prevent unfounded rumors about impending crises, as well as complacency, accumulation of problems, and delays in the initiation of corrective policy action. The recent emphasis on transparency by the international financial community has coincided with a series of severe and widespread international financial crises over the last decade. The East Asian crisis of 1997, which rapidly spread across the world, showed how a sudden debt-crisis in one country could threaten the stability of the whole international financial system. Transparency across financial systems can prevent crises through international surveillance.

    Many governments have avoided transparency in fiscal accounts. Increased transparency can be embarrassing for some countries, as it may reveal poorer than expected financial health. But fears about revealing the truth are often misplaced. India's fiscal deficit, which was and continues to be large by international standards, was not included in the Indian budget until 1991-92. Revealing this embarrassing figure, however, does not seem to have undermined the credibility of the Indian government. Financial experts could always work out the deficit figure and always knew the true state of affairs. By making it transparent and available to the people, it may have helped in focusing attention on the problem and working towards a solution.

    Arguments against transparency and disclosing information because the public is not well informed enough to understand it are also not sound. Revenue and expenditure figures, for example, reflect seasonal factors and straightforward extrapolation can be misleading. For example, in India, prior to 1997, there were apprehensions in some quarters about revealing these figures on a monthly basis. This information, however, has been publicly available on a monthly basis since January 1, 1997, and this has not led to wild conclusions being drawn from seasonal fluctuations.

    India is working towards greater transparency in its financial processes, particularly at the central level. The RBI appointed a group on fiscal transparency, headed by Montek Singh Ahluwalia, which published a report in June 2001. According to the Committee on the Fiscal Responsibility Act:

    According to internationally accepted good practices on fiscal transparency, there are four general principles. The first general principle is clarity of roles and responsibility. The second general principle is public availability of comprehensive information with emphasis on the need to report on any quasi-fiscal activity, that is, of such activities which could have potential budgetary and financial implications, like the oil pool accounts for petroleum and petroleum products. The third principle relates to open budget preparation, execution and reporting. The fourth general principle is independent assurance of integrity.

    This paper draws on the Ahluwalia Group report and discusses some of the issues involved in increasing financial transparency for better democratic governance, with special reference to India.

    Budgetary procedure in India is a hierarchical top-down process, which gives a lot of power to the Ministry of Finance as the first agenda setter.1 India, unlike many countries, does not have a general budget system law that embodies the principles of budget management. Instead, articles 112 to 117 of the Indian Constitution and the recommendations of Parliamentary Committees shape the procedures and scope of the budget.

    The Finance Minister leads budget formulation within the executive, and the executive branch leads the legislature in the approval process of the budget. It is a closed rule budget that has to be voted in or out, and the prerogative of the legislature in amending the budget is severely limited. The government resigns if the budget is not passed, and it normally gets the budget passed because of its parliamentary majority. The Finance Minister holds pre-budget consultations with representatives of trade, industry, agriculture, etc., but how much of these consultations actually get reflected in the budget is hard to say.

    Each Ministry has a Standing Committee of Parliament focusing on its affairs, and after the presentation of the budget but before its approval, the demands for grants of each ministry are referred to the relevant Standing Committee of Parliament. According to the Advisory Group on Fiscal Transparency, "It is open to the Standing Committee to invite inputs from civil society, but this is not yet an established practice."2

    Legislative control of the executive in financial matters has not worked too well so far. Important issues other than the budget and demand for grants have disrupted parliamentary proceedings, and the budget has had to be adopted without adequate parliamentary deliberations of the demand for grants.3

    The finance accounts provide fairly comprehensive and accurate information of government transactions. These are prepared by the Controller General of Accounts in the Ministry of Finance at the Centre, and by the Comptroller and Auditor General (C&AG) for the states. They are then audited by the C&AG and presented to the parliament and the respective state legislatures.

    The C&AG is an independent constitutional authority that submits detailed reports to parliament on various aspects of government revenues and expenditure on the basis of its audited results. Parliament has a Public Accounts Committee (PAC), normally chaired by a member of the opposition, which examines all reports of the C&AG. It appears, however, that the success of the PACs in motivating the governments to act on the basis of the C&AG's reports may have been limited.

    Timely information is a critical aspect of transparency. Citizens need to know not just historic information but also contemporaneous developments so that they can provide feedback to their elected representatives. The Controller General of Accounts provides the aggregate budgetary outturns of the central government in terms of revenues, expenditure, and fiscal deficit to the public on a monthly basis. For most states, however, no intra-year information on fiscal outturns is available as yet.

    India's federal system includes several layers of government, including local governments. But, the database on the lowest level of government is very poor, and no consolidated fiscal data exists on local governments. The RBI presents the consolidated fiscal position of the center and the states in its Handbook of Statistics, but only with a time lag, while the Economic Survey relegates this information to an appendix.4 This information, moreover, is only a limited picture of the general government, and the position of the public sector-the general government together with the public sector enterprises-is even fuzzier.

    The budget reports the estimates for the previous and the coming year, as well as the actual outcome of the precious year5. The budget by definition is a complex document. The Budget at a Glance provides a concise overview of the fiscal position of the central government, and it is the most widely used and quoted of the budget documents. It is also the document of most interest to the common citizen. The states, however, did not publish such a document until January 2000. Nineteenstates have introduced Budget at a Glance, and more states are likely to follow.

    The bases for the budget forecasts are not explicitly stated in the budget. For example, even the projection of the gross domestic product (GDP) figure used for deriving the tax forecasts is not available and can be derived only by working backwards, for example, from the tax and tax-to-GDP figures given in the document. How the budget forecasts for different tax revenues have been derived-for example, tax base, buoyancy, or elasticity-are not explained. An explanation would provide a basis for meaningful public debate about the reasonableness of the forecasts and the likelihood of revenue shortfall during the year. Expenditure forecasts are also not explained in sufficient detail, and this results in allegations of overestimating revenues and underestimating expenditure. Later in the year, supplementary demands for grants and below target revenues result in the revised estimate of the deficit exceeding the budget estimate. Bad fiscal marksmanship, at both the central and state levels, has reinforced doubts about the integrity of the budget process.

    The budget does not describe the fiscal objectives of the government beyond the standard objectives such as growth, equity and macroeconomic stability. Almost all expenditure programs specified in the budgets do not carry any quantification of their outcome beyond the money provided. Similarly, changes in tax policies introduced in the budget do not carry sufficient detail about the quantitative impact of such measures on revenue, efficiency, or equity. Barfi, for example, is a milk-based North Indian delicacy and is exempt from excise. The budget documents of the Centre do not mention how much barfi the poor consume, how the exemption would benefit the health of the population or the spread of the barfi industry, or what the problems of collecting excise on barfi are!

    The lack of a continuous rolling perspective of the fiscal position against which the current fiscal performance and targets can be evaluated is a serious problem. Previous budgets, both at the central and state levels, have announced the overall objective of "fiscal consolidation" without specifying when the revenue deficit will be eliminated or how much the fiscal deficit will be reduced every year. Such unclear objectives prevent accountability because they deny the electorate specific criteria with which to judge their government.

    Although the Union Budget in theory covers all income and expenditure of the central government, there are many government transactions conducted outside the budget's purview. Supplementary budgets, for example, seek parliamentary authority for additional expenditure beyond what is granted in the Bbdget. Frequent recourse to large supplementary budgets is a major obstacle to budget transparency. These budgets attract much less attention from the parliament, the media, and the people, and while they might require parliamentary approval, they obfuscate the financial process by separating their plans from those of the budget.

    At the central government level, the Oil Committee's (OCC's) Oil Pool Account is one important account that is not reflected in the budget of the central government. The OCC was supposed to run the oil Pool Account as a self-balancing account to manage the administered pricing mechanism in the petroleum sector through a complex system of cross-subsidization. Infrequent adjustment of domestic prices in response to volatile prices abroad resulted in Oil Pool Account surpluses during much of the late 1970s and the 1980s, much of which was used by the central government for budgetary support. In the subsequent period, the OCC's failure to adjust retail prices of petroleum products despite increasing price of crude led to mounting deficits in the Oil Pool Account. The deficit rose to Rs.18,200 crore on June 30, 1997, and the central government had to take over this liability by issuing bonds to the oil companies, which were subsequently cancelled through Oil Pool Account surpluses.

    The Oil Pool Account has greatly affected the central government's fiscal position, yet its operations have remained a mystery to most citizens. The extent to which diesel, LPG or kerosene are subsidized and the extent to which petrol or motor spirit are taxed remain far from transparent. The transition from administered to market-based pricing in the petroleum sector from April 1, 2002 will make this source of non-transparency disappear.

    Recent problems with the UTI's US-64 scheme and the Enron-backed Dhabol Power Company have drawn attention to the contingent liabilities of the central and state governments. Although loan guarantees by the central government are listed in the center's budget, the obligation to meet all dues to all Life Insurance Corporation policyholders is not included in this. Furthermore, the exchange guarantee given to the RBI for the Resurgent India Bonds and the India Millenium Deposits create an anomalous problem of non-transparency. The government has given the guarantee by issuing a non-negotiable, non-interest bearing securities of infinite maturity. It is difficult to call a non-interest bearing perpetuity a bond of any kind, so it is doubtful that it is a contingent liability of the center. But, insofar as the RBI profits accrue to the center, the RBI's contingent liability is an indirect contingent liability of the center.

    Outstanding guarantees of seventeen major state governments exceed Rs. 100,000 crore, while contingent liabilities of all states amount to about a quarter of their total liabilities. There are reports of creditor banks having difficulties in collecting the money by invoking state government guarantees. Guarantees constitute a major source of non-transparency in the fiscal arena, but progress has been made by some states through a legislated ceiling on the total amount of guarantees.

    The budget documents provide information on receipts of the governments by source for the actuals for the year before last, the revised estimates for the current year, and the budget estimates for the coming year. While information on how much money came from which source is available from published sources, there are several causes of non-transparency.

    The budget figures do not reveal the incidence, or the end effect, of taxes on various sections of society. Indirect taxation, for example, can be extremely heavy on the end consumer due to cascading. Since there is no set off for sales tax levied on inputs, the total sales tax levied on a final product can be more than the stated percentage of the cost price.

    Assume, for example, that both stainless steel utensils and stainless steel attract sales tax at the rate of 4 percent, and without any sales tax a stainless steel utensil would cost Rs. 100 and use Rs. 50 worth of steel. With 4 percent sales tax, the utensil would use Rs. 52 worth of stainless steel after tax, and, assuming no mark up pricing, cost Rs. 102 plus Rs. 4.08 of sales tax. Thus, the price to the customer would be Rs. 106.08, and the total incidence would be Rs. 6.08, which is much more than the sales tax rate of 4 percent. The customer in effect not only pays a tax of Rs. 4 on the utensil and Rs. 2 on the steel that has gone in to make the utensil, but also Rs. 0.08 as a tax on tax. This effect, which is known as cascading, takes place because of the absence of input rebate in indirect taxation.

    Widespread exemptions keep excise duties quite complex with uncertain incidence implications. As stated in the Alhuwalia Group report:

    ...any standard publication of the excise tariff structure runs to about 720 pages of which as many as 220 pages are devoted to exemptions. On the face of it, the exemptions number about 70 but individual exemptions have as many as 259 "entries" that amplify their scope enormously…. The descriptions of the conditions under which the exemptions would apply are often opaque and subject to the interpretation and discretion of administrators, leading to corruption and loss to the exchequer.6

    Direct taxes (personal and corporate income tax) are under the jurisdiction of the central government.7 These continue to be opaque due to a complex set of exemptions and concessions. India has a progressive tax system, in which higher income individuals pay a higher proportion of their income as tax. While this is probably true in general, there are quite a few exceptions.

    Agricultural income, for example, is a state subject, and Indian states have not shown much enthusiasm for taxing their farmers. This distinction between agricultural and non-agricultural income has enabled many rich agriculturists to pay less taxes than a mid-level industrial worker.

    There are inequities across different sections of non-agricultural income as well, mainly due to widespread exemptions and concessions. Export profits, for example, enjoy income tax exemptions, and the complex calculation methods of these profits offer enormous scope for abuse. Industries (but not services) are also subject to tax exemptions, depending on their location and form of organization, and these exemptions moreover are frequently changed. This complicated system obscures the effects of direct taxation and offers opportunities for corruption as well.

    Tax exemptions and concessions, also known as tax expenditure, are similar to government expenditure because they too are for promoting industry and helping particular sections of society. Unlike conventional expenditure, however, tax expenditure does not require legislative approval. In India, unlike in many countries, tax expenditures are neither quantified nor audited. This makes it difficult to monitor their efficacy, especially when their objectives are not stated clearly.

    Similarly, subsidies constitute the largest element of unproductive expenditures and pre-empt a large part of the Indian government resources, yet the estimates available in the budgets as well as the national accounts understate the true extent of such subsidies. The budgets only report the explicit subsidies, while the National Accounts cover only grants on current account that private industries, public corporations, and government enterprises receive from the government. A more satisfactory measure of subsidies is the sum of the unrecovered costs of the public provision of non-public goods. This means including the "hidden subsidies" that are implicit because of the public provision goods and services that the government need not provide.8 Studies conducted by NIPFP have calculated the costs of these hidden subsidies at 47,780 crore in 1996-97, or 3.51 percent of GDP for the center alone. Subsidies and tax exemptions constitute a major source of non-transparency in the fiscal accounts.

    The benefits to producers and to consumers from government subsidies are difficult to separate. The subsidy received by the Food Corporation of India (FCI), for example, is broken down into the subsidy on account of distribution of subsidized food and the subsidy on account of the carrying cost of buffer stock, but, as stated by the Alhuwalia group "…the budget does not distinguish between the subsidy which arises because FCI carries stocks in excess of the normal buffer stock requirements. This part of the subsidy is not a consumer subsidy but a producer subsidy and should be separately identified."9

    Cross-subsidization is also common in public sector enterprises. Indian Railways, for example, subsidizes passenger traffic by freight, and Indian Airlines cross-subsidizes uneconomic low traffic density routes. No information, however, is available on the extent and impact of this cross-subsidization.

    Tax administration in India involves 100 percent assessment, mainly because of lack of computerization, non-uniform rates of indirect taxation, numerous exemptions and concessions, and a complex tax structure. Every taxpayer return has to be certified by an assessing officer, and the taxpayer faces the same tax administrator over the years for multiple functions, including filing of returns, assessment and audit. There are allegations that the unscrupulous rich avoid taxes by bribing corrupt officials. Such corruption may be widespread in India, and this results in uneven and unfair incidence of direct taxes.

    The Fiscal Responsibility and Budget Management Bill proposes the center conduct its fiscal operations within a medium-term fiscal and macroeconomic framework. Under the bill, the executive would provide with the annual budget a medium-term fiscal policy statement, a fiscal policy strategy statement, and a macro economic framework statement. The medium-term fiscal policy statement would set forth a three-year rolling target for prescribed fiscal indicators and would specify underlying assumptions. The fiscal policy strategy statement will increase transparency by clarifying the precise objectives of schemes announced in the union budget.

    The availability of interim reports about fiscal developments beyond the annual budget exercise not only enhances transparency but also enables corrective action for deviations from the budgeted path. The Fiscal Responsibility and Budget Management Bill recommends that the central budget announce intra-year targets. The budget should also announce what adjustments will be triggered if there is a shortfall of revenue or overshooting of expenditure vis-ŕ-vis the intra-year targets.

    Some of India's state governments plan to implement their own Fiscal Responsibility Acts. As and when they do, this will hopefully remove the lack of information on basis for the budget forecasts and fiscal objectives, a medium term fiscal and macroeconomic framework, and interim reports during the year on outcomes relative to budget forecasts

    India's budget process is the opposite of collegial procedures that emphasize democratic discussion at every stage. Should the budget be an open rule collegial process? Under this alternative open procedure, proposals made would be subject to amendments on the floor of the legislature. This procedure, however, would probably result in delays in passing the budget, especially as India is in a phase of coalition politics. The advantages of an open procedure, moreover, can be derived even under a closed rule by making the budget process more transparent.

    Voters tend to overestimate the benefits of public spending and underestimate the costs of taxation.10 Unfortunately, politicians tend to take advantage of this fiscal illusion, and they try to derive strategic advantages by being ambiguous about policy choices.11 Transparency will prevent creative accounting. It will also limit politicians' natural tendency to hide taxes, overemphasize the benefits of public spending, and understate government liabilities. Alesina et al (1996) have produced empirical evidence from twenty countries in Latin American and the Caribbean that a hierarchical-transparent budget procedure is superior to a collegial-nontransparent system in promoting fiscal discipline.12

    The Committee on the Fiscal Responsibility Act has given the expectations for a minimum standard of fiscal transparency in Annexure V of its report. By following the recommendations of the committee, India's governments, both at central and state levels, can significantly contribute to better fiscal management and discipline.

    In conclusion, India's indirect tax system has become more transparent in recent years, thanks to the rationalization of Union Excise Duties through the introduction and extension of CENVAT. State sales tax has improved considerably with the introduction of uniform floor rates and withdrawal of sales tax related exemptions from early 2000, but the problem of cascading because of lack of input rebating continues. This problem and the consequent non-transparency will disappear in April 2002, when the states introduce the state level value added tax (VAT). The problem of cascading, however, will remain to some extent because of the simultaneous operation of union excise and state sales tax in the area of commodity taxation.

    There is considerable scope for improving transparency in tax administration. There should be very limited scope for discretionary action, quick and easy rectification of mistakes on taxpayer files, and effective monitoring of arrears, exemptions, appeals, and payments. This can be achieved by introducing electronic filing of returns and avoiding a long-term relationship between taxpayer and administrator, selective assessment of returns by identifying risk categories, and a rigorous audit procedure.

    Hopefully, once the governments are bound by commitments to sound fiscal management, including managing expenditure properly, mobilizing revenues in an efficient and equitable way and maintaining appropriate fiscal balance, with disclosure of the governments' medium term fiscal plans of action, appropriate information and explanation of deviations, if any, the existing democratic institutions will ensure sound fiscal management.

    Nakorn Serirak
    Endnotes

    It has been only three years since the Thai Information Law, the Official Information Act, B.E. 2540 (1997) was passed. The act, however, has become increasingly popular and has been widely accepted as a new but useful tool for the public. While bringing about many contributions to the political reform agenda of the country, the Information Act also creates a significant challenge to the traditional bureaucratic system. It plays a significant role in changing the attitude of the Thai government servants towards the administration of official information.

    The Official Information Act was first drafted by the so-called Transparent Government, under Prime Minister Anand Panyarachun, and had to wait until July 1997 for approval by the parliament. It has been effective since December 9, 1997.1 The principle of the Official Information Act is the guarantee of the people's rights to have full access to government information. According to the act, almost all official data and information should be revealed for public perusal, with only some categories of information that the state can still keep confidential constituting small exceptions. Should the state agency deny disclosure of some excepted data, the people still have the rights to appeal to the Official Information Commission (OIC) to reconsider the cases.

    The Official Information Act ensures people's rights to know government information, ranging from the rights to inspect, to request a copy, to get advice, to make complaints and appeal, and to ask the state to correct or change personal information. Such rights are bestowed on any individual whether they have any involvement or relationship with the cause and effect of the information they request.

    This new principle turned down the traditional practice of state officials whose attitude towards government information was to keep it strictly confidential for official uses only. On the other hand, in response to public demand to access, disclosure is an exception, as most data has been kept internally secret.

    According to the Official Information Act (OIA), a state agency-that is, central administration, provincial administration, local administration, state enterprise, government agency attached to the National Assembly, court only in respect of the affairs unassociated with the trial and adjudication of cases, professional supervisory organization, independent agency of the state, and such other agency as prescribed in the Ministerial Regulation2-is to execute information disclosure through three mechanisms:
    1. Publish the following official information in the Government Gazette: [OIA, section 7]
      1. The structure and organization of its operation; [OIA, section 7(1)]
      2. The summary of important powers and duties and operational methods; [OIA, section 7(2)]
      3. A contacting addresses for the purpose of contacting the state agency in order to request and obtain information or advice; [OIA, section 7(3)]
      4. By-laws, resolutions of the Council of Ministers, regulations, orders, circulars, rules, work pattern, policies, or interpretations only insofar as they are made or issued to have the same force as by-laws and intended to be of general application to private individuals concerned; [OIA, section 7(4)]
      5. A state agency shall, for dissemination purposes, compile and make available the said information for sale, disposal or distribution at its office. [OIA, section 7]
    2. Make available at least the following official information for public inspection: [OIA, section 9]
      1. A result of consideration or a decision which has a direct effect on a private individual, including a dissenting opinion and an order relating thereto; [OIA, section 9(1)]
      2. A policy or an interpretation which does not fall within the scope of the requirement of publication in the Government Gazette; [OIA, section 9(2)]
      3. A work-plan, project and annual expenditure estimate of the year of its preparation; [OIA, section 9(3)]
      4. A manual or order relating to work procedure of state officials which affects the rights and duties of private individuals; [OIA, section 9(4)]
      5. A concession contract, agreement of a monopolistic nature, or joint venture agreement with a private individual for the provision of public services; [OIA, section 9(6)]
      6. A resolution of the Council of Ministers or of such Board, Tribunal, Commission or Committee as established by law or by a resolution of the Council of Ministers; provided that the titles of the technical reports, fact reports or information relied on in such consideration shall also be specified. [OIA, section 9(7)]
    3. Provide information to individual request:
      1. If any person makes a request for any official information, other than the official information already published in the Government Gazette, or already made available for public inspection, or already made available for public studies, and such a request makes a reasonably apprehensible mention of the intended information, the responsible state agency shall provide it to such a person within a reasonable period of time. [OIA, section 11]
      2. Any person, who considers that a state agency fails to publish the information in the Government Gazette fails to make the information available for public inspection, fails to provide him with the information, violates or fails to comply with this act, or delays in performing its duties, or considers that he does not receive convenience without reasonable cause, is entitled to lodge a complaint with the Commission. [OIA, section 13]
    Therefore, we can see that most of the official information is subject to disclosure while only few is declared as an exemption. According to the Official Information Act, some information, which is not subject to disclosure, is described as follows:
    1. Official information that may jeopardize the Royal Institution shall not be disclosed; [OIA, section 14]
    2. A state agency or state official may issue an order prohibiting the disclosure of official information falling under any of the following descriptions, having regard to the performance of duties of the state agency under the law, public interests and the interests of the private individuals concerned; [OIA, section 15]
      1. The disclosure thereof will jeopardize the national security, international relations, or national economic or financial security; [OIA, section 15(1)]
      2. The disclosure thereof will result in the decline in the efficiency of law enforcement or failure to achieve its objectives, whether or not it is related to litigation, protection, suppression, verification, inspection, or knowledge of the source of the information; [OIA, section 15(2)]
      3. An opinion or advice given within the state agency with regard to the performance of any act, not including a technical report, fact report or information relied on for giving opinion or recommendation internally; [OIA, section 15(3)]
      4. The disclosure thereof will endanger the life or safety of any person; [OIA, section 15(4)]
      5. A medical report or personal information the disclosure of which will unreasonably encroach upon the right of privacy; [OIA, section 15(5)]
      6. An official information protected by law against disclosure or an information given by a person and intended to be kept undisclosed [OIA, section 15(6)]
    An order prohibiting the disclosure of official information may be issued subject to any condition whatsoever, but there shall also be stated therein the type of information and the reasons for non-disclosure. It shall be deemed that the issuance of an order disclosing official information is the exclusive discretion of state officials in consecutive levels of command; provided that a person who makes a request for the information may appeal to the Information Disclosure Tribunal as provided in this act. [OIA, section 15]

    There were 164 complaints and 83 appeals submitted to the OIC in 2000. Among the total of 164 complaints, 34 cases (20.73 percent) were filed against local government agencies; 21 cases (12.80 percent) belonged to the Ministry of Education; 16 cases (9.76 percent) to the Ministry of Finance; 13 cases (7.93 percent) to agencies under the prime minister's office equal to those of the Ministry of Agriculture. 11 cases (6.71 percent) belonged to the Ministry of Transportation equal to those of the Ministry of Interior. Most of the cases are complaints about the officials who did not give good service and did not deliver requested information.

    For the total of 83 appeals, 13 cases (15.66 percent) were filed against the Ministry of Agriculture and Cooperatives; 12 cases (14.46 percent) belonged to the Ministry of Finance; 9 cases (10.84 percent) agencies under the prime minister's office; and 8 cases (9.64 percent) the Ministry of Education.

    20 percent of the appeal cases were concerned with disciplinary investigation documents, while 10 percent involved operational management of Bank and Financial Institution. Another 10 percent were information related to concession, contracts, projects, and budget.

    The majority of population who exercised the OIA last year was government officers. State officers made most of complaints (45.12 percent), while private citizen and businessmen ranked second and third (25 percent and 20 percent). Only few journalists (4.88 percent) and NGOs (2.44 percent) utilized the OIA.

    Most of appeals cases (44.58 percent) were filed by state officers while businessmen and private citizen ranked second and third (28.92 percent and 15.66 percent). Journalists (3.61 percent) and NGOs (2.41 percent) were minority in exercising the act.

    There were 122 complaints with 87 appeal cases in 1999, when there were 26 complaints with only 6 appeals in 1998. This year, as of June 2001, 77 complaints and 43 appeals have been submitted to the OIC.

    After three years of the implementation of the Official Information Act, major difficulties exist in government information disclosure practices:
    1. Most people neither understand key elements of the act nor realize their own rights. Most people do not know how to utilize the law in compliance with their demand to have access to the state information. People cannot exercise their rights, as they do not know the procedures.
    2. In government agencies, high-ranking officials do not understand the law and do not know how to implement the act. Furthermore, they lack adequate knowledge of the law and the main principles of information disclosure service to achieve people's rights to know. They thus cannot administer the office in accordance with the act. Another significant aspect is that they have limited skill in exercising discretion.
    3. The servicing-level officers of government agencies still have insufficient knowledge about the Official Information Act. They are not used to the very new principles of information disclosure as a crucial part of their services. They have negative attitudes towards the act. Some feel that the act puts more burden on them, and like the executive level, they have limited experience in implementing the law, in terms of servicing procedures, information disclosure and judgment practices on the kind of information.
    To solve the problem and overcome such difficulties, the OIC has prepared strategic guidelines for the act implementation as follows.3 (For legislation details please see Appendix 3.)

    The government of Thailand takes the issue of freedom of information as a key policy, since it is considered the most essential part of the political reform portfolio of the country. To promote people's right to know is a crucial part of being democratic, and adds more support to building up civil society. Such a recommendation was proposed by the OIC to the government early this year and the Cabinet, on February 1, 2000, approved the proposal and issued the following confirmed guidelines:4
    1. All state agencies have to speed up the strict enforcement of the Official Information Act.
    2. Concerned agencies should support the budget, staff, and staff development, to the Official Information Commission, in order to efficiently achieve the goal of the information law.
    3. The representative of ministries who chair the commissioner in the Official Information Commission must work for the commission at least two years in order to have the Official Information Commission perform continuously.
    4. The prime minister's office together with all state agencies should consider the development of the information management and documentary administration to be a systematic one with nationwide network.
    5. The promotion of high ranking officials and the recruitment of new staff as legal officers should take the capacity and the performance in the management according to the Official Information Act as a standardized consideration.
    During the first three years of Information Law implementation, there were some significant cases that led to a lot of public attention. The cases created new practices concerning official information and played important roles in changing conventional value and behavior of the Thai bureaucrats. The belief of official information belonging to state agencies with its secrecy and confine to internal official uses only has been shifted to the new idea that official information belongs to the people. Its disclosure is now a prime while very few concealing is an exception. Significant implications include:
    1. Entrance Examination Result Disclosure

      The parent of a student, who failed the entrance examination for the Demonstration School of Kasetsart University, petitioned the school to disclose the examination result of her daughter and other students. After the school denied her request, the parent then submitted the appeal to the OIC to force the school to disclose the requested information. The Information Disclosure Tribunal (IDT) for Social and National Administration Information ruled that the parent had the rights to see the examination result.5 The school, however, declined to comply with the IDT's decision, by claiming that it must consult the Council of State, the Attorney General's Office, and the Ministry of University Affairs first. This is to obtain guided procedures for disclosing examination result, which should be set up as a new standard to cope with similar request in the future.

      Finally, the OIC confirmed the IDT's order and enforced the disclosure, followed by the cabinet's resolution asserting state agency to comply with the OIC's recommendations and the IDT's order; otherwise, they should be punished by disciplinary regulation.

      The case contributed greatly to the educational system of the country. The examinations held by several institutions have been adapted in compliance with the act, which brought about fair examination and transparent academic system.

      In dealing with the case, it was found that the state agency lacked knowledge of the law and did not know how to implement the act. Moreover, the case of disclosing the examination result, the score and the answer sheets is quite new and has never been practiced before. It is actually very contradictory to conventional practice of the educational system. The ruling decision by the IDT was thus resisted in the first place. However, finally, the implementation was successful.

      The case is also concerned with the issue of personal information intervention. As the school claimed that the score and answer sheets were categorized as personal information and could not be revealed to anyone else apart from the owner. The parents of other students filed a lawsuit against the IDT's decision to the Civil Court. The IDT's decision in ruling that the score and answer sheets of all students were official information was legally confirmed by the Civil Court, the Appeal Court and the Supreme Court eventually.

      This case has given rise to the new principle of examination result disclosure, in particular the examination of public interest. The Ministry of University Affairs then ordered schools to revise the screening procedures of the examination and the process must be transparent and accountable. The case plays a significant role in the Thai education system.

      After the parent had seen the examination result, finding some irregular admittance under uncommon procedure, she then submitted complaint to the Office of the Council of State (OCS). The OCS considered the acceptance procedure of the school through privileged considerations, that is, donation, sponsorship or kinship, rather than examination score, as discrimination practices, which is prohibited by the Constitution. The OCS thus recommended to the government to revise all procedures of school entrance examination and stated that the process should be done properly and in line with the Constitution.

    2. Corruption Investigative Report

      Journalists and nongovernmental organizations (NGOs) petitioned the Office of the Counter Corruption Commission (CCC) to disclose the investigative result report of the corruption in the Ministry of Public Health. The CCC denied the petition and petitioners then submitted the appeal to the OIC.

      The Information Disclosure Tribunal for Social and National Administration Information ruled that the investigation was finalized. Those involved officials were disciplinarily punished and the cases of politicians were further forwarded for criminal investigation. The IDT considered the investigative report as official information, and the case has great impact on pubic interest. Concurrently, its disclosure could bring about positive attitude to the national administration, in particular to the CCC itself. The IDT thus decided that the CCC disclosed the requested information.6

      The CCC's disclosure of investigative report, concerning the corruption scandal in purchasing drug and health materials in the Ministry of Public Health, was criticized as this might hamper the efficiency of law enforcement. It was argued that the report was protected by the CCC's regulations against disclosure and that concerned witness who gave evident and documents intended their names and those informations to be kept undisclosed.

      However, as a matter of fact, the witnesses in this case were high-ranking executives; their role as witnesses in this case were official duty of which will be protected by law. Though there is a regulation of the CCC against the disclosure of such information or the argument of witness safety, the discretion of the IDT in this case was weighted over by public interest. This is because the scandal involved a large amount of national budget, committed by and involving the high-ranking officials, involving high executive members, both government officials and politicians. The case was very sensitive, as it is the corruption of purchasing drugs, which affects basic services to the people, in particular, the poor.

    3. Business Contract

      Journalists requested to the Financial Sector Restructuring Authority (FRA) to release the Purchasing Contract related to the bid for sales of the Financial Sector Debts. The FRA refused to release such information claiming that the documents were business contracts between the FRA and private company and such a commercial deal cannot be disclosed. After considering this appeal case, the IDT for Economic and Financial Information ruled the FRA to release the contract with exceptional conditions for Initial Purchase Price and Sharing Agreement to be released after the bid date. Those documents contain personal information, such as amount and information, which are personal debts, should be privacy protected.7
    The Official Information Act is a new law, knowledge and understanding in the freedom of information, and privacy protection issue, in particular, is totally new. During the first two years of the Official Information Act implementation, there was some implication of misunderstanding of the law substance. Many cases reflected the tension between the matter of freedom of access to information and privacy protection, since these two issues are closely related. On the academic perception, many scholars propose the two issues to be separately considered while some claim close interrelationship as two sides of the coin. To the Thai experience, according to the act, in the matter of information disclosure, discretion of state officials must be made with regards to the factors of state duties, public interests, and private interest. This is also confirmed by the constitution, which stipulated that information causing damage to a person, dignity, reputation or privacy must be prohibited. Therefore, freedom of information and privacy protection could be persistently found on each other's boundary and become the matter of how to balance these two components. The controversy in the case of disclosure of examination scores and answer sheets and the case of revealing of witnesses in investigative report are evidence in this criticism.

    The following problems have arisen with regard to:
    1. Lack of Knowledge and Understandings
      The Official Information Act is a newly established law, both government officers who have the duty of information services according to the act and the people who have the rights guaranteed by the act, are not familiar with the new principles. Knowledge and understanding in the freedom of information is still limited. State agencies do not well understand the law and the principle of people's rights to know. They are not ready to provide good services of information disclosure.

    2. Lack of Consciousness
      State officials, ranked from the executive and high position level to the servicing level, from the policy level down to the implementation level, still lack consciousness in carrying out the task of information service to the public. They have negative attitude to the concept of the freedom of information as they feel the act puts heavy burden to them. Many feel uncomfortable to have their work done under public watch. They feel more difficulties in doing their job in spite of the fact that this principle of the information law will put effort to make the government documentary work more systematic and more convenient, and this could help make official paper work easier indeed.

    3. Structure of Information Flow
      The documentary administration of the Thai governmental agencies was managed under the prime minister's Regulation for Documentary Administration. However, as a matter of fact, neither the huge amount of official documents in various agencies nor the information flow within the agency has been systematically managed. Moreover, as for the cross-ministerial information, the flow becomes more confused and complicated, since the document is not well stored. This makes the information service a difficult task. And as it usually takes too much time is searching and finding information to serve those who request, state officials feel unhappy to do the information disclosure service as they feel the job as burdensome and, moreover, boring.

    4. Lack of Faith
      Information law is a very significant mechanism for the reformation of the public sector, in particular in the development to achieve an information society as well as open society. However, Thai officials still do not recognize such importance and do not have a clear vision of what position the government organization should achieve in the future. State officials in the next generation must be developed as a new generation bureaucrat who must possess skill and knowledge not only in national administration and management techniques, but also in Information Technology. And most importantly, they should realize the importance of the rights to know. They must understand the Information Act and perform information disclosure efficiently. They should have "faith" in their own future, as a modern type of civil servants, who will be proud of privilege information management to do a good job of information services, during the information era, to eventually achieve the development of the nation towards Information Society.
    The Official Information Act has been a crucial component of democratic development as it encourages people to enjoy more political participation by directly expressing their opinions and proposing their needs or suggestions to the state. This should help make the government more accountable and more transparent. In order to participate well and efficiently, people should have full access to state information and should know what is going on through state policy. People should know all that the government does or will do. The Official Information Act ascertains the government's vision of "what the government does or knows, people have the rights to know."

    However, the Official Information Act is a new law, and the new concept of freedom of information is totally new to both the Thai state officials and the people. Thai society thus needs some time to learn and practice more about the Information Law. State officials have to understand more clearly the procedures of law enforcement so that they know how to provide information services and disclose information to meet public requests. Meanwhile, people should recognize their own rights to know and know how to utilize the Information Act as a means of access to state information. Thai society should recognize information law as an essential part of establishing accountable and transparent government and a crucial part of eventually building up a civil society.

    KEY DISCUSSION POINTS
    • Different societies have very different levels of development and democratic systems, yet it was noted that all are grappling with the similar problems of making governments more accountable and transparent. The best guarantee of this in an open society and freedom of information is to "let people know." "There is no secret worth keeping," even in matters of national security, according to participants who sit on those country's national security advisory boards. In any case, we live in an increasingly open and integrated world community, in which information is available, provided we are willing to search for it. There is also actually very, very little information that can be kept away from people.

    • Whistle-blowers need protection to be encouraged. A Whistle-Blower Act such as in the Philippines provides some protection. In the United States, the whistle-blower can get remuneration of some portion of the public money saved. This has created an environment where, if there is a whistle-blower, there are a lot of lawyers who would like to represent him/her, in order to get "a percentage," and that, in a sense, is seen as a balancing out. Note that the major users of these procedures are often disgruntled employees, under the guise of whistle-blowing, and New South Wales has even actually produced a manual on how to deal with disgruntled people.

    • Other laws in place can restrict freedom of information. These, such as the Blasphemy Law in Pakistan have been misused. In Indonesia, there have been complaints of misuse of the freedom of the press in terms of ethnic or religious sensitivity. In the United States, the Hate Crimes Law provides some protection of pluralism. In India, although there is no specific law, like a Hate Crimes Legislation or a Blasphemy Law, Article 19 (1) B, qualification to the Freedom of Expression-in which there are specified certain conditions, that says that anything which may be seen as incitement of riot or public violence-can be seen as violating the probation of Article (1) A, and is sometimes criticized by those who favor greater access to information and greater scope of freedom of information.

    • Freedom of information legislation is vital. But it was noted these acts are not a panacea, but another element to try to achieve transparency in the government. The freedom of information legislation in Australia is freedom to look at government documents in writing, and the court cases always revolve around certain issues-what documentation is available and not what happens in smoke-filled rooms, with handshakes. But, of course, that is not subject of freedom of information documents. So much of the work today is electronic and bureaucrats and perhaps even the private sector, are not nearly as effective in filling. One interesting case that decided that emails were searchable under the FOI revealed that the webmasters can actually retrieve emails back to three to five years and these become subject to FOI requests. In the early years, FOI in Australia was used by the press as a means of fishing for stories. Large requests were made for any documentation on oil pricing or taxation policy and so forth, and it led to enormous costs of wealth. Over the last decade, the concept of "User Pays," has come with payments from the requester of the information. This has a very bracing effect on the flow of information. An FOI act, while not sufficient and not a guarantee, is nevertheless valuable for every country. In the UK, after many abortive attempts, there is now a plan to bring in a Freedom to Information Act, but it is very much emasculated, compared to what we had hoped for before Labour came to power. And the act, for example, excludes what is euphemistically called all "Working Papers" or "Working Documents."

    • The practice of measuring "outputs" in Australia rather than budgets and costs is emerging allowing measurements of "policy"-not money. The medium-term fiscal policy statement defines a number that your fiscal deficit shall not exceed or your revenue deficit or current account deficit will not exceed. It also provides three years' rolling target for prescribed fiscal indicators. Before the elections, the government should come out and say this is what we have done, so that the incoming government is not in for any surprise.

    • The issue of freedom of information for good governance must be looked at from a standpoint of the government using information as a way of governing better, not just for self-propaganda or image-making. Government schools can prepare training modules for bureaucrats and public officials to look at information to make sure it flows, either through the press or other mechanisms, by becoming a skill for the government to govern with, to involve journalists in governance to promote this whole area of concern within the government.

    • There are five players in good governance-politicians, bureaucrats, judiciary, media, and citizens. All players must be involved, with checks on the government and bureaucrats who are in a position to discriminate to allocate facilities, to deny benefits, and delay decisions. For example, information on defense is available in India. Two open standing committee reports from the Ministry of Defense, army, navy or air force, detail an accident in 1986 when 300 aircrafts and about 100 trained pilots were involved in an accident, because of absence of AJT. This was documented in 1998-99, but nothing happened. The Times of India came out with an article on its 14th page, as a letter, which did not draw sufficient attention to the incident. The media must act as a watchdog, and continue to play its part.

    • The consultation processes in framing FOI legislation should be more open, and must involve the media itself (which is not the case in India, for example). Each one of us would like to decide, if we had the power to decide, what is permissible. But even the most mature of democracies have no answer to that question, and as long as it is not very clear, perhaps all the information should be out in the open and let it do whatever damage or good it wants to do or it can do, rather than have some "wise men" decide what is and is not permissible in the interest of privacy, or whatever higher motive.

    • Consideration must be given to the scope of legislation covering institutions that have a bearing on the democratic processes, but that are outside the purview of the governmental system, for example, NGOs, which perform a number of activities on behalf of the government; and are funded by the government at various times, and also political parties, which have a very important stake in good governance. Government should compel these institutions to observe transparency in their operations under a Freedom of Information Act.

    • The notion of a fundamental right to information needs to be debated, as in the Consultancy Papers of the National Commission, set up for review of the working of the Indian Constitution. It may be in the Bill of Rights and in Article 19 A, so we tend to assume that there is a right to information, but that is also governed by Article 19 B. The Right to Information Campaign in Rajasthan, operates on the Panchayat level, and demands information about the money that has been allocated to their block development, so that they can compare it to what was not being done, and bring local officials to book. Efforts must also be made to combat technical barriers to access a right to broadband is needed, the right of connectivity is the next issue. The amount of time that you spend in trying to download something is itself a barrier against access to information.

    • There seem to be layers of information access. First is access to government information, which we focused on very heavily and quite correctly, generally about getting access to documents. Secondly, political openness is also brought about by important political structures like the Public Accounts Committee, the scrutiny committee for the budget, which is chaired by a leading Opposition Party member. So, in a sense, it has been given a degree of independence from the government. The processes of Parliamentary Questions, is also very important, providing that answers are fair and genuine. These processes all need to be strengthened. In addition, the Internet offers enormous opportunities for openness. In Britain now, there is a site www.open.gov.uk, which you could visit to access any bill or legislation policy document, This empowers the non-elite, the non-London based elite, to search, and people are actually encouraged to give comments. The Indian government has put the Constitutional Review papers out on the Internet on www.nic.in, encouraging comments from individual citizens of India. The third layer is non-governmental information. In Britain, for example, there is a tremendously draconian privacy law which means that the Press can often not write about individuals or non-governmental private bodies, unless they have got absolute, fool-proof documentation. Thus, Lord Archer can get away with essentially being a crook, for 15-20 years, and only now, when he has been convicted do all the stories emerge, 85 percent of which are probably true. Before, he could slap on defamation orders and other clauses. Privacy laws need to be tempered and regulated.


    Ashok Lahiri Endnotes
    1. The Annual Financial Statement containing the estimated receipts and expenditure of the government of India, commonly known as the Union Budget, is the most important of India's money bills. The Union Government has traditionally used the February 28th presentation of the Budget to announce major policies as well. Government practices in India's 28 states are along similar lines, with their budgets coming later than that of the Union Government. India's financial year runs from April 1 to March 31.
    2. Report of the Advisory Group on Fiscal Transparency, Reserve Bank of India, Delhi, June 2001, p. 8.
    3. Demands for grants are normally taken up for consideration by parliament in two distinct stages. After presentation of the budget in parliament, the parliament goes into recess before reconvening for the budget session. During the recess of parliament, the Departmental Standing Committees take up the demands for grants. Later, on parliament's reassembling, the demands are formally debated in the backdrop of the Reports of the Standing Committees and put to vote. Specific hours are allotted for these discussions. The demands of ministries, which are to be discussed and voted, are formally listed.
    4. Intergovernmental transfers between the central government and the states necessitate consolidating their fiscal data to avoid double counting. For example, central transfers to the states are recognized as expenditure by the center. A rupee of such transfers when spent by the states shows up as expenditure by the states. Adding the expenditure of the center and the states leads to counting the rupee of transfers twice.
    5. The budget document consists of "The Annual Financial Statement, which is constitutionally the budget, provides aggregated information. Detailed information on allocation for individual ministries is provided in the demand for grants and the expenditure budgets. The receipts budget provides information on revenue receipts." (Report of the Advisory Group on Fiscal Transparency, Reserve Bank of India, Delhi, June 2001, p. 20.)
    6. Report of the Advisory Group on Fiscal Transparency, Reserve Bank of India, Delhi, June 2001, p. 19.
    7. Apart from the Profession Tax, there are hardly any direct taxes levied by the states.
    8. D.K.Srivastava and C. Bhujanga Rao. (2001). "Government Subsidies in India: Issues and Approach," paper presented at Conference on "Fiscal Policies to Accelerate Growth," NIPFP, World Bank, ADB, et al., New Delhi, May 2001.
    9. Report of the Advisory Group on Fiscal Transparency, Reserve Bank of India, Delhi, June 2001, p. 14.
    10. J. Buchanan and R. Wagner. (1977). "Democracy in Deficit," Academic Press.
    11. A. Alesina and A. Cuikierman. (1990). "The Politics of Ambiguity," Quarterly Journal of Economics, November.
    12. Alberto Alesina, Ricardo Hausmann, Rudolf Hommes, and Ernesto Stein. (1996). "Budget Institutions and Fiscal Performance in Latin America," National Bureau of Economic Research Working Paper Series, No. 5586, Cambridge, Mass., USA, May 1996.


    Nakorn Serirak Endnotes
    1. The Act has been effective within 90 days after it was published in the Government Gazette on September 10, 1997
    2. Official Information Act, BE 2540 (1997), section 4, also see other definitions under the OIA in this section
    3. See detail in the 1999 annual report submitted to the Cabinet attached to the letter of the OIC No.1311/99 dated January 7, 2000
    4. Letter of the Office of the Cabinet Secretary No. 0205/1685 dated February 7, 2000 and letter of the OIC No. 1311/99 dated January 7, 2000
    5. Decision of the Information Disclosure Tribunal for Social and National Administration Information, Decision 1/2541(1998)
    6. Decision of the Information Disclosure Tribunal for Social and National Administration Information, Decision 17/2542(1999)
    7. Decision of the Information Disclosure Tribunal for Economic and Financial Information, Decision 1/2542(1999)
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