Scourge of Supplementary Budgets Eroding Parliamentary Powers Over the Purse

June 08; While the Parliament was presented

the Federal Budget 2016-2017 on June 03, soon after, the Finance Minister, Senator

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Muhammad Ishaq Dar sought the Parliament’s post-facto approval

for a Rs. 261 billion ‘supplementary budget’ to cover governmental

expenditure overruns in the outgoing fiscal year which was almost 28% higher

than the figure approved last year. 1

Every year, while each Federal Government must

seek Parliamentary consent on Federal Budget before any spending, 2

the Government receives the assent for x amount of money but returns next year

to the National Assembly to ask for an additional spent amount for its post-effect

approval. Consider that the Assembly passes the budget each year that prescribes

limits and purpose. The additional budget and re-appropriation can change the

prescribed limit and purpose. Prior approval of the Assembly is therefore, not

required and hence the sanctity of the original budget passed by the Assembly

is lost.

The priorities of any nation are reflected in

its policies and strategies. The national budget, representing the Government’s

fiscal, financial and economic objectives, serves as the most important policy

document of a county. The national budget, therefore, is the single most important

manifest of governmental priorities. “Power over purse strings

or the “power of the purse” is an incontestable democratic

fundamental. This essentially means that there is an obligation on elected representatives

of the people in an Assembly to ensure that all revenue and spending measures

they authorize, legally and constitutionally, are fiscally sound, match the

needs and aspirations of the population with equity, and that they are being

implemented appropriately and efficiently. It further symbolizes that it is

“we the people” who make and implement the budget for themselves.

Pakistan’s current budgetary process has traditionally attracted

little input from parliamentarians, political parties or wider civil society.

The budget process has, in consequence, become solely the domain of the Government,

leaving little scope for analysis or accountability. The culture and practice

of supplementary budget further erodes even the cosmetic role of the National

Assembly in scrutiny and passage of the budget.

To strengthen Parliament’s role in Budget

scrutiny requires many reforms with the budget procedures but a major reform,

in this case, is required in the Constitution of Pakistan. Just as the Constitution

of Pakistan requires that the Federal Government present an annual budget statement

to the National Assembly in respect of each financial year, the same Constitution,

through Article 84, also suggests that the Federal Government has the power

to spend amounts and get an ex-post (after spending the money) approval from

the National Assembly.

This constitutional provision, however, runs

contrary not just to the principle of Parliamentary scrutiny and approval of

budget but also allows the Government to follow bad fiscal discipline contrary

to leading international good practices in this regard.

This constitutional power of supplementary and

excess grants in the hands of each Government results in many problems. Firstly,

the seriousness in the budget making is reduced since each Government knows

it can increase the budgetary limits or change the purpose during the year.

Secondly, the focus on policy is lost. Policymaking and implementation is hampered

once the purpose of funds is changed. Thirdly, monitoring and accountability

becomes difficult since the executed initiatives may differ from approved initiates.

So archaic and fiscally-irresponsible is this

system that Pakistan is among the only 3 countries in the world that provide

this power to Governments of changing the budget in almost any manner after

budget passage by a Parliament. In Denmark, while the Government has this power,

it still requires prior approval of the parliamentary committee of the finance

in order to use excess budget. In Pakistan’s system, Governments do not

even submit to this oversight and prior approval by Parliament and Committees.

The weakness in the system of fiscal discipline

and lack of Parliamentary oversight is not limited to just one Government or

one year. Each Government merely presents a supplementary budget after incurring

the unauthorized extra expenses during the previous year at the time of presenting

the next year’s budget. It is a mockery of parliamentary supremacy and

runs counter to the spirit of democracy that excess spending and other changes

in the approved budget are made without the prior approval of the Assembly and

prompt citizens to raise the question, what, after all, is the sanctity of Parliament’s

approved budget if each Government can spend as much extra as it deems necessary? 

Amendment in Constitution:

PILDAT demands that the Parliament must create the necessary political consensus

to amend the Constitution to not just take away the powers of excess and supplementary

grants from Federal and Provincial Governments but also make it incumbent upon

each Government to seek ‘prior’ approval in case any extra expenditure

is required. The definitions of excess and supplementary grants must also be

revised to be stringent and precise in scope.

References:

1. Govt ‘overspent’ Rs.261 billion

in FY 2015-16,” Khaleeq Kiani, DAWN. June 06, 2016.

http://www.dawn.com/news/1263090/govt-overspent-rs261bn-in-fy-2015-16

2. Constitution of the Islamic Republic

of Pakistan: Article 80(1).