Budget and parliamentary oversight

To have an active role in the budget-making process, the parliament needs to revisit the constitutional framework

Budget and parliamentary oversight


he federal budget is a formal statement of the government’s plans for taxation and spending. It explains government’s priorities, links the Executive with the Legislature and ensures parliamentary accountability. In Western kingdoms, the contest for budgetary control began centuries ago and was seen as a defining trait of the relationship between the subjects and their monarch.

The modern budget system originated in the 19th Century Britain. The Executive proposes the budget, the Legislature approves it and the Executive, along with the Parliament, oversee its implementation. During the 20th Century, the budget process increasingly became a principle tool for Legislative scrutiny and Executive control of subordinate departments in the United States. In most developing countries, the budget is a vehicle for Legislative scrutiny of administration.

In Pakistan, the budget process goes through four stages: first, issuance of Budget Call Circular, proposals for revenue and expenditures by ministries and divisions and finalising of the plans by the Finance Ministry; second, approval of the plan by the federal cabinet; third, the presentation of the budget before the parliament for its deliberation and eventual vote on it; finally; and fourth, the presidential assent.

The constitution specifies the role of the parliament and elaborates upon the relationship between the parliament and the Executive during the budget-making processes. Article 73 provides the legislative procedures for money bills. It states that money bills, including the budget shall originate in the National Assembly, provided that simultaneously a copy of shall be transmitted to the Senate which may, within fourteen days, make recommendations thereon to the Assembly which shall consider the recommendations of the Senate and can pass the bill with or without incorporating these recommendations. It shall then be presented to the president for assent.

Political factors, however, have a considerable influence on actual role of the parliament in the budgetary decision-making and its parliamentary oversight.

The factors that prevent the parliament from actively participating in legislative oversight of the budget include undemocratic structures of political parties; predominance of the Executive in the budget process; compositional structure (bicameral) and unequal legislative powers in approving budget between the Assembly and the Senate; the way consensus is reached within the parliamentary parties; information asymmetries between members of the parliament and the government; crucial dependence on the bureaucrats; lack of political will and limited capacity of parliamentarians to understand the complexity of budget processes; and, lack of coordination between parliamentary committees and floor activities.

The following factors are important: one, there is no formal engagement of the parliament and parliamentary committees in ex-ante budget process; two, the time allowed for a debate on the budget in the parliament is often inadequate; three, the Senate cannot, on its own, amend the budget.

In some developed democracies, the parliament has a more active role in budgeting at three stages: first, the ex-ante debates on a draft; second, debates on and approval of the final draft; third, oversight of post-approval execution of the plan; and, fourth, review and approval of the supplementary budgets. It also examines and debates the reports of the auditors.

In Pakistan, there is no engagement with the parliament in ex-ante debates and the drafting process. The Finance Ministry dominates the process from its initial drafting to the final execution. It has been argued that a high dependence on bureaucracy and the predominance of the Executive prevent the parliament from having a more active role in budgeting.

Lack of political will and the inability of some parliamentarians to understand the budgeting process also undermines the parliamentary supremacy.

To have a more pro-active role in the budget process, the parliament needs to revisit the constitutional framework describing the role of and relationship between the parliament and the Executive during the budget process.

Article 73 of the constitution provides that the National Assembly has the power to approve the federal budget. The Senate of Pakistan can only recommend changes to the money bills.

Article 84 should be amended to require that the federal government must seek prior consent of the parliament to spend an amount in the name of supplementary grants for a particular service. The parliament may pass a law, specifying particular reasons for supplementary grants and their prior ratification. In Japan, the Public Finance Act, 1947, makes it binding for the cabinet to get its supplementary grants approved by the national legislature.

A pre-budget orientation session every year can raise the level of debate. The session can also discuss the previous year’s performance. Parliaments in many countries, including Brazil, France and Sweden, have this practice.

A working draft of the budget should be presented two to three months before the start of the new fiscal year.

In some Organization for Economic Cooperation and Development countries the budget is presented three to four months prior to its final approval by the parliament.

To enhance parliamentary oversight of the budget, a board of advisors can be formed. It can consist of subject experts in the Public Accounts Committee. The rules of procedures need to ensure that the ministers concerned appear before the parliamentary committees and answer the questions regarding the budget and post-budget plans.

The writer, a PhD candidate at Quaid-i-Azam University, Islamabad, can be reached at dilawarmuneerqau@gmail.com

Budget and parliamentary oversight