WHILE economic analysts scramble to give their responses to the budget, I ask: to what end? With mini-budgets and simple notifications — often based on IMF guidelines or the whims of policymakers — frequently upending the entire budgetary framework, why this laser focus on allocations? Would it not be more meaningful to question the higher-ups about the actual utilisation of the previous year’s budget?

With actual figures varying significantly from budgeted estimates, the socioecono­mic outcomes of public spending can hardly be predicted on the basis of budgeted figures. The budget formation process itself is so questionable and lacking in evidence that it overshadows any serious thou­ght about actual outcomes. Allocations are simply based on historical patterns rather than guided by any equity-based framework.

Lack of a proper guiding framework means that planning is ad hoc and based on voter considerations. Ministries and regions with stronger political clout secure bigger budgetary shares, and vice versa. This ap­­pr­oach extends beyond the federal to the provincial level, where the same pattern emer­ges: sectors and districts with stronger mi­­­nisters and politicians get higher allocations. Unfortunately, these allocations do not necessarily translate into better development outcomes, as is evident from a det­ailed expenditure review of any province.

Besides political pressures, a critical issue faced is the lack of reliable and timely data to be leveraged for evidence-based budgeting. Statistical departments — national and provincial — lack the human resources, te­­chnological capacity, infrastructure and lo­­gistical support needed to produce timely data. So, it is not surprising that the projected 4.8 per cent growth in the livestock sector and the overall 2.7pc economic gro­wth are based on 15-year-old livestock data.

A more responsible budgeting framework is needed.

It is also important to note that many government departments — particularly in the social sector — struggle to utilise even the limited funds available to them due to a mix of procedural delays, selective accountability concerns, and capacity issues. Delays in budget releases and cumbersome procurement processes further hinder fund utilisation, often resulting in large-scale budgetary lapses. Hence, regardless of the allocations made at the start of the fiscal year, actual fund utilisation and development outcomes can vary significantly.

A critical fault line in the entire governance system is the lack of accountability, which allows policymakers to act with impunity when it comes to past spending decisions. This lack of accountability trickles down to department levels: while PC-1 forms are routinely filled to secure budgetary allocations, PC-5 forms are seldom filled to conduct an actual assessment of the impact of public spending.

With such undue focus on allocations, rarely do we question or analyse the impact of these expenditures. This allows politicians and other stakeholders to selectively use dated or unreliable statistics to construct narratives about economic performance that align with their agendas.

It is high time to move beyond the prevailing trend-based budgeting approach and adopt a more responsible, equity-centric budgeting framework. Allocations alone do not guarantee development; the real measure lies in how effectively funds are utilised to achieve intended outcomes. Therefore, a robust system of oversight on actual fund utilisation must be institutionalised across all tiers of government. Each department should be required to present comprehensive year-end reports, detailing not only the financial expenditures, but also the developm­ent outcomes achie­­ved. These reports should clearly indicate whether spending remained within budget, under bud­g­­et, or over budget, and assess how effecti­v­e­­ly it translated into tangible progr­­ess.

To enable such transparency, strong linkages must be established between statistical agencies and planning departments, allowing for better data integration, analysis and evidence-based assessment. Parliamentary bodies, the cabinet, and P&D departments must play a more active role in demanding and scrutinising these utilisation reports, ensuring accountability and improvement in public financial management.

Moreover, there is a pressing need to synchronise the budget planning, fund release, expenditure and procurement cycles. Mis­alignment between these processes often leads to inefficiencies, delayed project execution, underutilised budgets, and hence, suboptimal outcomes. Harmonisa­tion of the fiscal cycle must be ensured to enhance the timely and effective use of public resources.

Ultimately, budgets do not determine progress — accountability and outcomes do.

The writer is a senior research associate at SDPI, Islamabad. The views are the writer’s own and do not reflect SDPI’s position.

X: @AroojWDar

Published in Dawn, June 24th, 2025