The coalition government has intensified discretionary spending on parliamentarians’ schemes, with fund releases soaring to Rs 48.3 billion by mid-January 2024. This figure represents nearly three times the amount that was allocated until December 2024 and exceeds the Ministry of Finance’s prescribed ceilings for the first three quarters of the fiscal year.
Details of Fund Allocation
According to a media report, documents from the Ministry of Planning and Development reveal that Rs 30.9 billion was released between January 13 and 17, raising the total for parliamentarians’ schemes to Rs 48.3 billion. Of this, Rs 18.4 billion was authorised as “upfront one-liner” allocations, bypassing the Ministry of Finance’s limit of Rs29 billion for the first three quarters.
The funds, released under the Sustainable Development Goals Achievement Programme (SAP), cater to development schemes driven by parliamentarians in their constituencies.
Mechanism and Oversight
Normally these funds are initially transferred to the Cabinet Division as a “single-line budget” without earmarking specific projects. The Cabinet Division subsequently allocates them to individual schemes.
This practice raises questions about adherence to financial protocols, as additional releases breach the Ministry of Finance’s Budget Release Strategy and International Monetary Fund (IMF) program conditions, which aim to maintain fiscal discipline and ensure primary budget surpluses.
Difference Between Parliamentary and Development Budgets
Parliamentary budgets, such as those under SAP, differ from regular development budgets in that they are discretionary and focused on localised development initiatives, often tailored to the political constituencies of parliamentarians.
Unlike regular Public Sector Development Programme (PSDP) funds, which follow stringent approval and allocation processes, parliamentary budgets have greater flexibility. However, they are also subject to criticism for potential misuse or prioritization of political objectives over national development needs.
The funds for parliamentary budgets typically come from reallocations within the federal budget or additional revenue measures. For the current fiscal year, the federal development budget was initially set at Rs1.4 trillion, later reduced to Rs1.1 trillion to fill budgetary gaps, including electricity subsidies.
It is important to note that while this discretionary budget has ballooned up threefold, Pakistan has fallen short of its budgeted targets, as of December 2024 by Rs 386 billion.
Controversy Over Exceeding Ceilings
The Ministry of Planning’s approval of Rs 48.3 billion by mid-January has drawn criticism for breaching the Finance Division’s ceiling of 60% budget utilisation by March.
Official documents revealed that Rs 12.5 billion was released on January 13 to meet the ceiling. However, an additional Rs18.4 billion was approved just four days later, violating these guidelines.
The Planning Ministry justified these actions under a simplified release procedure approved by the Executive Committee of the National Economic Council (Ecnec). Yet, concerns remain about adherence to financial regulations such as the General Financial Rules, Public Finance Management Act 2019, and Finance Division’s 2024-25 strategy.
While parliamentary allocations surged, actual development spending under the PSDP remained subdued. By December 2024, only Rs148 billion, or 13.5% of the annual development budget, was utilised for federal development projects. The Planning Ministry had authorised the release of Rs 376 billion by December, underscoring a significant gap between allocations and spending.
Fiscal Strain on Public Resources
To fund the development budget and discretionary spending, the government imposed higher taxes on salaried individuals and increased the cost of essentials such as children’s milk and packaged milk. The additional burden has heightened concerns about fiscal mismanagement and prioritisation of political over economic objectives.
The exponential rise in discretionary allocations highlights the government’s focus on localised development but also raises critical questions about transparency, fiscal discipline, and alignment with broader economic goals.
