The International Monetary Fund (IMF) has highlighted serious flaws in Pakistan’s budget-making and implementation procedures, highlighting notable shifts in the amount and makeup of spending as compared to the yearly budget that the parliament has authorized.
The IMF’s “Pakistan’s Technical Assistance Report: Budget Practicing” claims that significant departures from projected budgets have been found in the country’s recent budgetary results.
Stronger fiscal institutions may help create a more credible budget, improve its implementation, and limit policy slippages, even when these disparities are partly caused by political unpredictability and an unstable external environment.
According to the Fund, the difference between the authorized budget and the actual spending through technical supplemental grants and supplementary grants in fiscal year 2022–2023 was about 55%.
While acknowledging that the amount and makeup of spending has changed from the approved annual budget, the report states that these in-year changes have been brought about either by technical supplementary grants or by supplementary and excess grants, which are defined by Article 84 of the Constitution as additional grants approved during the year that are not met by the surrender of existing grants.
These additional awards totaled more than half of budget expenditures in FY23. According to figures cited by the IMF, the development and current budget diverged by a total of Rs1,910 billion, or 21.9% of the authorized budget in fiscal year 2022–2023, with the difference reaching a height of 54.7% from the National Assembly-approved budget.
A sizable amount of expenditure does not go through the NA’s previous review because of the executive’s unusual discretion in interpreting Article 84 of the Constitution to authorize these awards without the NA’s prior consent.
In the upcoming years, Islamabad’s severe financial circumstances would necessitate strict budgetary discipline.
