Budget: separation of powers

Marrying political and economic imperatives is always a tough job. It is all the more difficult when the government is made up of different political parties and the financial policy documents like the budget have to pass through various stages.
An ugly scene reflecting this situation came to light when the Ministry of Finance was asked to hear the views of the National Assembly's Standing Committee on the proposals for the forthcoming budget, on 27th May, 2006.
The members of the committee, including Kashmala Tariq of the ruling PML severely criticised the government for convening the meeting at the eleventh hour and expressed doubt whether their recommendations offered so late would be accommodated in the budget.
The opposition members, along with Kashmala Tariq, staged a token walkout to register their annoyance. However, Omar Ayub Khan, State Minister for Finance, later succeeded in persuading the committee members to return to the meeting on the assurance that their proposals would be given due consideration in the budget.
It is the responsibility of the executive branch, represented by the Federal Cabinet, to incorporate budgetary proposals into the Finance Bill. This Bill is placed before the National Assembly for discussion and approval.
The Standing Committee is supposed to go through this Bill with a fine toothcomb, hold proper hearings, and, then frame recommendations, including amendments to the bill for approval by full House. The concept of separation of powers enshrined in the constitution between the three branches of government appears to have lost its meaning.
Parliamentary Committees are supposed to be the real workhorse for legislative business. But to undertake this task they need to be provided the funds and the staff which can assist them in the same manner as the secretariat assists the ministers.
At its last meeting, the Standing Committee on Finance is reported to have proposed a number of measures in various areas. Their recommendations mainly pertained to the controversial NFC award, writing off loans, CBR policies, PSDP funds, inflation and wages.
The members asked the government to address the reservations of smaller provinces regarding the NFC award along with the payment of royalty for gas and electricity to Balochistan and NWFP respectively. The meeting also criticised the Centre for not releasing funds for PSDP to the provinces and deplored that even the released funds were not fully utilised.
Members were concerned over the unprecedented increase in oil prices and proposed that oil prices should be linked to the rates in the Gulf region and OGRA should also be answerable to the committee. Another complaint was that whereas the Federal Government gets loans from the international financial institutions at three to four percent interest, it lends money to the provinces at mark-up between 10 to 18 percent.
The members also asked the government to streamline the working of CBR, reduce GST from 15 percent to five percent, and lower the duty on the import of machinery for agricultural sector. Besides, minimum salary of employees was proposed at Rs 6000 along with a substantial increase in pensions.
It would have been more appropriate for the committee to conduct hearings on the current year's finances instead of next year's. Normally cut motions are placed before the House on expenditure beyond the approved budget.
The House instead of approving these cuts without debate, should refer them to the Standing Committee. They should summon ministries and departments to explain reasons for expenditure beyond budgetary estimates and also for revenue shortfalls.
The grants and assistance provided by our friendly countries to educate the legislators have gone to waste. Parliament needs to graduate from a debating club and perform its functions as enshrined in the Constitution.
This requires serious effort. The Speaker of the House needs to guide them so that there is a proper check and balance in the system in the financial sphere.
The public representatives can discuss the budget proposals and propose amendments etc in the House. In short, public representatives have enough elbow-room to give their input.
Therefore, it would have been more dignified for the honourable Standing Committee members to show a mild reaction rather than engage in a less than useful tirade. Also, it would have been more productive to confine the discussion to budget proposals.
Issues like NFC award and royalty to provinces which are so controversial cannot be resolved in this way. As regards the demands of the members of the Standing Committee that their suggestions be incorporated in the budget, they only needed to be reminded that it was for the assembly to accept or reject them.