Who Makes Pakistan's Budget and What is the Budgeting Process?
- 09, June , 2023
Newstoday: Simply, a budget is an estimation of expenditure and the total income of the specified period, probably a year. When the budget exercise is undertaken at the national level, it seeks both national and international levels, including political situations, security-related issues, and infrastructure requirements but not limited to it. The budget is defined as the Pakistan government's financial plan that narrates its proposed expenditure and the financing it from a single fiscal year from July 1 to June 30 of the next year. After that, it acts as a policy document that sets government priorities and objectives. The federal government presents the budget every year in Parliament, which is mandatory to be followed by each of the provincial governments at their respective assemblies.
Now the question arises, who makes it, and who has the power to allocate the money under each head? Who decides the allocation of the tax, and who decides what will be the new development scheme and what will be its budget? This is not a short process story; it's a long game that took months to complete.
Six stages are involved in processing the budget:
The first step includes where the national cabinet and provincial cabinet decide the budget priorities, initiatives, and policies.
The second stage is budget preparation. At this stage, spending departments prepare their invoices and submit their expenditure receipts then, later on, the Ministry of Finance reviews them and consolidates the submitted estimations.
The third stage includes authorization. It includes the submission of the annual budget statement to the assembly. It further involves two sub-stages, first, the assembly’s approval, and then it is discussed and sent to the PM and CM of all provincial for authentication. After the PM Authentication,it is referred to as the SAE- Schedule of authorized expenditure, which is later submitted to the president/governor for approval.
The fourth stage includes the execution, Where the ministry of particular finance discusses the budget with the spending ministries and respective accountant general offices.
The fifth stage includes monitoring and reporting, where expenditures and all revenues are recorded properly and reported by the spending department to monitor the progress of revenues against the budget over the fiscal year. The responsibility of recording expenditures is over the accountant general.
The final stage includes a periodic review, which goes through the financial performance and the achievement of the policy objectives by the spending department. Standard committees of the national assemblies and the provincial assemblies are authorized to review all summaries of the expenditure.
Budgeting Processes-Comparative Analysis
The budget-making process in Pakistan's parliamentary form of government is largely influenced by the Executive and the federal bureaucracy. This is due to the inherited governance system from the colonial administration and the historical development of the Executive in parliamentary democracies. In such systems, the separation of powers between the Executive and legislature is not as strict as in presidential systems, as the Executive is accountable to and dependent on the legislature's support. As a result, the Executive and legislature work collaboratively in parliamentary systems.