NEC meeting

The walkout by three chief ministers from a meeting of the National Economic Council (NEC) has left the federal government in a bit of a pickle regarding the approval of the Federal Budget 2018-19. With both provincial and federal governments about to retire, this was a chance for some last minute politicking – albeit on somewhat just grounds. In a press conference held after the walkout, the chief ministers of Sindh, Khyber Pakhtunkhwa and Balochistan complained that the federal government had not included provincial schemes in the federal Public Sector Development Programme (PDSP). That seems out of line with how budgetary allocations are supposed to be made. Provincial schemes must come under provincial budgets, as Planning Minister Ahsan Iqbal noted later. But neither party was telling the full truth. The real complaint was that some provincial development schemes had been approved in the PSDP but these were in areas where PML-N stalwarts had been elected. The CMs insisted that the NEC did not have quorum to pass the next federal budget nor did the outgoing federal government have the authority to pass a full year budget for the coming year. It is this later point that became the point of contestation between the finance and planning ministries.

The walkout of the CMs was only part of the problem. The bigger tussle is still between the two federal ministries. In the NEC meeting, the Ministry of Planning presented a Rs1.03 trillion PDSP. The Ministry of Finance had only approved a Rs800 billion PDSP. This had been noted with great pride by Miftah Ismail when he had said that the federal budget would be announced early. The federal cabinet had approved the same. We have already criticised the federal government for proposing to cut the PDSP by 20 percent for the upcoming year. This is a decision that makes little sense amidst claims of macroeconomic stability and new infrastructural development under CPEC. The planning ministry has asked for a more sensible allocation with around Rs100 billion for the next government. But it beggars belief that the ministry had maintained its silence on the matter before the NEC meeting. Such a large cut in the PDSP cannot be justified unless the country is under a financial emergency. With the budget being announced tomorrow, we already seem to have our first controversy in hand.