As usual after having approved the annual budget for 2007-08, the National Assembly also passed a supplementary budget legalising of Rs641 billion incurred by the government during FY 2007. What is very significant about this large excess expenditure is that the parliamentary sanction was given in minutes. It amounts to three-fourths of last year’s revenue target of Rs835 billion.

The National Assembly has never refused sanctioning of excess expenditures incurred by the government in excess of the sanctioned amount for the fiscal year. The government later seeks the approval of the assembly to cover that up. MNAs who lament the large excess expenditure are told not to cry over the spilt milk as the excess expenditure had already been incurred. The excess expenditure becomes part of the national debt and the domestic debt goes on increasing.

Every segment of the government is guilty of overspending from the President House to the Supreme Court to the Pakistan Railways.

The excess expenditure last year included the repayment of Rs1.586 billion on foreign debt and servicing of the domestic debt as well. Surely such debt repayments should have been anticipated and formed part of the budget.

In the United States the President sends the budget proposals to the Congress almost six months before the expiry of the current year budget. If the Congress does not approve the budget in time, it sanctions the average expenditure of the government for one or two months. The president is not allowed to spend without Congress’s approval.

In Pakistan there is not such restraint. It is more like a free for all. In fact the National Assembly votes only on a part of the expenditure. The rest which is the charged expenditure is taken for granted.

But now the Central Board of Revenue (CBR) has been renamed as Federal Board of Revenue with vast powers. For example, it can increase the withholding tax or reduce it without reference to the National Assembly or the government. It can freeze the bank accounts of sales tax defaulters. It can determine the real profits of the banks irrespective of the figures they provide. It has now increased the import duty on 24 items. According to the CBR 14 to 15 per cent duty has been raised on the import of 143 items while there is an increase of 7-9 per cent on the import of 61 items.

The CBR has also reduced the sales tax on a number of imported steel products from 20 to 15 per cent.

While the CBR has been given so much authority, the National Assembly should have also a larger say in budgetary matters and should review the performance of the CBR every six months.

Now it is required to prepare budget with much more care and anticipate all the expenditure instead of spending the money first and coming to the National Assembly for approval of a supplementary budget. Whether it is the President House or the Pakistan Railways, they should formulate their budget proposals more carefully.

If the government finds the need for extra expenditure it could approach the National Assembly before it spends the money and seek its approval instead of spending the money without its approval.

The need for the supplementary budget may not arise if there is no corruption and no wastage of public funds takes place by the administrative authorities. There should be contingency funds for meeting emergency needs.

The Standing Committee on Finance should become far more assertive and meet more often to scrutinise official expenditures on the basis of quarterly report.

It is equally important for the Public Accounts Committee to scrutinise the government spending as early as possible but for that the auditor general has to finalise his report at the earliest, which usually comes to the National Assembly very late.

What matters is effective parliamentary control over the public purse and punishing of those who misuse it.