ISLAMABAD: In a major decision, the government is looking to empower a board led by federal ministers to take decisions on all financial matters on behalf of the federal government. It wants to do this through an amendment in the 18th Constitution Amendment proposed in the finance bill, which will replace the words “Federal government” with “board with the approval of the minister incharge”.

The move is aimed at regaining executive and financial powers of the prime minister affected by the August 2016 decision of the Supreme Court of Pakistan.

Speaking at his post-budget news briefing, Finance Minister Ishaq Dar invited opposition parties for jointly setting macroeconomic priorities for the financial year 2018-19 (a year after next financial year) under what he described as a charter of economy. He proposed that parties should jointly determine where Pakistan should stand when a new government came to power following the elections. He conceded inability of the PML-N government to turn around major public sector entities and proposed that all parties should agree on their divestment through the stock exchange over the next five years to improve their management and financial health.

Finance bill amends definition of federal government

Regarding the creation of a board empowered to take financial decisions, the finance minister said the change had been proposed because running of government affairs was suffering following the Supreme Court judgement of Aug 18, 2016, which held that “[t]he Prime Minister cannot take decisions by himself, or by supplanting or ignoring the cabinet because the power to take decisions is vested with the federal government i.e. the cabinet, and unilateral decisions taken by the prime minister would be usurpation of power”.

Ali Zafar, a constitutional expert and former Supreme Court Bar Association president, told Dawn that the constitutional amendment could not be amended, changed or varied by a finance bill. It can only be taken up by a super majority of parliament. Since the finance bill is done by the National Assembly by a simple majority, any amendment would be void and be considered to have not taken effect at all.

The finance minister said the change was required for smooth running of the government affairs till such time a constitutional amendment could be made by parliament. He said the apex court order had made rule 16(2) of the rules of business 1973 ineffective. That rule empowers the prime minister to “give directions in any case as to the manner or its disposal without prior reference to the cabinet”.

He said the prime minister had the powers to give anticipatory approvals in many cases like he as finance minister had some powers on behalf of the ECC, but during devolution of federal powers to the provinces and presidential powers to the prime minister the pendulum had swung to the other extreme.

Mr Dar claimed to have discussed the matter with parliamentary colleagues from other parties and they shared his concerns, agreeing that a board of the Federal Board of Revenue, with the approval of the minister in charge, should be empowered through the finance bill.

He said the change was not proposed to empower him personally. The minister in charge in this case would be the minister for revenue who could be someone other than the minister for finance. However, at present, Mr Dar holds the portfolio of the minister for finance, revenue, statistics and privatisation.

“The parliament would approve the proposed amendments to run the system, otherwise it had become impossible for the government to operate. We had to find a way out,” he asserted, adding that even minor decisions were currently being made by calling meetings of the cabinet or through circulation of summaries. He said the recent signing of international framework agreement with the OECD and Swiss government for exchange of financial information was also delayed due to the legal complications created by the Supreme Court order.

Responding to a question, the minister reiterated his call for a long-term charter of economy, saying he had given a five-year macroeconomic framework in his budget speech. He said the other political parties should come forward for a joint economic framework for financial year 2018-19 for the next government to implement.

He said it was the right time to jointly set priorities for the next budget to be announced before the term of current government came to an end on June 5 next year because after a few months all parties would enter election mode and nobody would listen to each other because of election-year compulsions.

He said the current government had the constitutional right to present the next budget as well because “the right to budget making could not be given to caretakers”.

Responding to a question on the revival of public sector entities promised by PML-N before the elections of 2013, Mr Dar blamed “undue politicisation” for derailing those plans.

He said he had even proposed an out-of-the-box solution by offering the Pakistan Steel Mills to the Sindh government and sale of its land to the National Bank and Sui Northern Gas to reduce its liabilities before its possible sale. He said the power distribution companies could be improved by bringing in private sector management through divestment of their shares in stock exchanges for which he had given a road map for the next five years.

Responding to another question, the minister said no new tax had been imposed in the budget while relief had been given on a larger scale. However, burden of tax had been increased on non-tax compliant people that would generate a net addition of Rs87 billion.

Published in Dawn, May 28th, 2017